Citigroup Oracle Meredith Whitney on Calling the Crisis

“Being right is always all it’s cracked up to be”
Meredith Whitney in New York on May 12, 2008 Photograph by Daniel Acker/Bloomberg

Oct. 13, 2008: Whitney is ranked one of Fortune’s 50 most powerful women in business

Why were you able to see what was coming when others couldn’t?
It wasn’t just Citigroup. It was the whole banking system. A lot of the reason why the banks were getting into so much trouble was because the bond market was so sick. What I paid attention to before other people was the cascading impact of downgrades, the waterfall of downgrades, because the ratings agencies were so behind and had to move so quickly to downgrade securities. That set off the dominoes.

After Citi, you had the power to move markets. How did that feel?
I don’t talk about things that I haven’t done a lot of work on and have a high conviction level on. The financial system is a faith-based system. And I’m very careful about preserving the equilibrium.

What did you learn about yourself in 2007 and 2008?
That I can live off of very little sleep.

What’s it like to reach a personal peak at the same time the country is going through such trauma?
It was a really scary time for everybody. It wasn’t as if I got any accolades during that time. It was 2009, after the fact, that it happened.

So getting a huge prediction right isn’t all it’s cracked up to be?
No, being right is always all it’s cracked up to be.

How was your personal wealth affected?
Pretty poorly. I think I lost between a quarter and a half a million dollars on financial positions. I rode Lehman all the way down to zero. It’s pretty ironic, right? That, I don’t think anyone knows.