Tags: Whitney | economy | financial | job

Meredith Whitney: Economy Shifting from Financial Services to 'Something More Real'

By    |   Thursday, 29 January 2015 10:19 AM

Now that we're six years past the financial crisis, the economy is shifting away from its focus on financial services, says hedge fund manager Meredith Whitney, co-founder of Kenbelle Capital.

"The U.S. economy is transitioning from a financial services economy to something much more real," she said at conference this week, CNBC reported.

This transition involves "significantly less leverage with real manufacturing and productivity, [which means] there are going to be growing pains," Whitney said.

For the past year, the KBW Bank (stock) Index has generated a negative return of 0.75 percent, compared with positive 14 percent for the S&P 500.

On the employment front, "the jobs that will continue to grow are jobs that require a very high level of education and also jobs that require not a high level of education," Whitney noted. "You'll see a bifurcation with that."

The economy added 2.95 million jobs last year, the most since 1999, and the jobless rate fell to a six-year low of 5.6 percent in December.

Meanwhile, Washington Post columnist Robert Samuelson believes that economic weakness overseas might spill over to our shores.

The eurozone economy grew only 0.6 percent annualized in the third quarter, while Japan's economy contracted 1.9 percent annualized, and China's growth slid to 7.4 percent for all of 2014, its slowest rate in 24 years.

"Think now how this might imperil the U.S. recovery. One channel is weaker exports; other countries buy less of what we make," Samuelson wrote.

"Another is reduced profits from foreign operations of U.S. multinationals. These represent about a third of total U.S. corporate profits. The danger is indirect. Weaker profits might depress stocks, leading to less consumer spending because shareholders feel poorer."

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Now that we're six years past the financial crisis, the economy is shifting away from its focus on financial services, says hedge fund manager Meredith Whitney, co-founder of Kenbelle Capital.
Whitney, economy, financial, job
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2015-19-29
Thursday, 29 January 2015 10:19 AM
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