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Nov 10: Meredith Whitney expects some banks to shed jobs
Meredith Whitney, managing director at Oppenheimer and one of the first analysts to predict in 2007 that banks would face enormous write-downs and balance sheet problems as a result of the housing downturn, does not expect a lot of banks to use the Troubled Asset Relief Program (TARP) to sell impaired mortgage-backed assets because doing so would require further write-downs. "The terms and the consequences are going to be too disruptive over the near term," she said. She says she really started to worry about bank balance sheets almost a year ago, and remains equally concerned today, despite the large amounts of capital that have been raised. The lack of earnings for banks will result in further job cuts in the fourth quarter, with "capital intensive players" having to shed 25 to 30 per cent of their work force.