Puss in Boots

Wall Street analyst Meredith Whitney addressed the FICO 2011 World Conference today in NYC.

In the fairy tale Puss in Boots, Puss, a cat, turns an ogre into a mouse and then devours it. Perhaps there are parallels to the way Ms. Whitney has taken on Wall Street in recent years.

Dr. Mark Green (photo), FICO CEO, spoke before Ms. Whitney, and then joined her for a discussion on the economy — specifically housing. In his presentation, Dr. Green said home prices won’t get back to pre-recession levels until 2020. Saying that consumer spending represents 70% of GDP, he added that “consumers got us in (to the recession) they will get us out.” Green said the recession was caused by “sub-prime lending to a high risk population.”

Ms. Whitney countered by saying “so many things led to the credit crisis — ‘structural stupid’ — so deeply rooted.” She said “any quick fix to housing confounds me.” But she believes that “raising interest rates immediately,” to stop distorting reality, is necessary. According to her stats, 22.5% of U.S. mortgages were underwater in 2Q11.

Photograph: Stephen Wise

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