Meredith Whitney arrived early for lunch at London’s Wolseley restaurant and so, alas, I didn’t see Wall Street’s most notorious analyst making her entrance. I bet the other diners stared, though. They may not have known that this was the woman who predicted the U.S. banking crisis, but they couldn’t have failed to notice her fishnet-clad legs, one ending in a patent leather high-heeled shoe with a diamante buckle, the other in a blue-and-pink running shoe.
When I get there, the portion of Ms. Whitney visible above the starched white tablecloth looks exactly as a woman known as the “dollar dominatrix” ought to. A long position in gold is festooned around her neck and clamped to her ears; her hair is big and blonde, and her sweater black and expensive.
Yet the smile is warm and girly. Please like me, it begs. “This is so nice of you. I’m so excited about this!” she says in a voice so low that I can barely hear it above the din of the restaurant.
Ms. Whitney can afford to whisper: People go to great lengths to listen to what she has to say, even if they sometimes regret it afterward.
In 2007 she predicted that Citibank would cut its dividend – and it did. But then in 2010 she predicted that 50 to 100 municipal bonds would default – and they didn’t. Call No. 1 had Michael Lewis saying she was “the closest thing Wall Street has to an oracle.” Call No 2 had Fox TV commentator Charlie Gasparino saying she “didn’t possess a single brain cell.”
Oracle or lobotomy victim, Ms. Whitney does her homework. She has been studying the data on this series of Financial Times features (Lunch with the FT), reading past examples, and has worked out the importance of getting the restaurant right. She explains her thinking behind the choice of one of London’s swankiest places to eat.
“I didn’t want to pick anywhere too grand.”
Pouring coffee from the silver jug she has already ordered, she tells me she’s in town for a couple of meetings; that London gets “a lot more high-end” every time she comes – and that she has hurt her foot.
“I ran yesterday and was trying to keep up with my girlfriend and completely ate dirt.” Completely did what? It’s not just the low volume that’s a problem: The 43-year-old Whitney talks as if she were back in her dorm at Brown.
“I was so klutzy,” she explains. “I tripped and now one foot looks like an American football.” She pokes a swollen ankle out from under the tablecloth and the waiter advancing to take our orders almost trips over it.
“What’s the biggest crowd-pleaser: the sole or the halibut?” she asks him, conscientiously collecting more data before she makes her menu call. He duly recommends halibut – the more expensive dish – so she orders that. I say I’ll have the fish of the day, trout.
It is odd how angry people are with Ms. Whitney about that municipal bond call she made 21/2 years ago. Her initial bearish view was shared by such financial luminaries as Bill Gross and Nouriel Roubini; she only departed from them by being specific and saying defaults would run into hundreds of billions dollars within a year. When the defaults didn’t happen, she made everyone more irate by declining to say sorry.
Now she has written a book justifying her position. In it, she argues that the coastal states that were hit hardest by the real estate collapse will suffer a mass exodus as people flee from regulation, debt and punitive taxation, moving to the “flyover” states in the middle where taxes are lower.
I protest that I’d rather endure any amount of tax and red tape in New York than live in South Dakota. Ms. Whitney stops smiling and leans across the table, big brown eyes narrowing.