Meredith Whitney Advisory Group CEO Meredith Whitney Talks Midterm Elections in Virginia

Meredith Whitney · Meredith Whitney Advisory Group

Republicans face a big upset in the midterms because they are out of touch on affordability.

Whitney expects a very bad result for Republicans, drawing on her firm's work. She says Republicans have been out of touch on affordability and that the data they rely on is stale. Their headline data showing income gains across all levels is BLS data, which she calls very stale. She cites a concrete example of hardship: one in four SNAP recipients has lost access to food stamps. She concludes the electorate is angry and a big upset is coming, and that Republicans privately know they are at serious risk.

“from the work that we've done, I think it's gonna be really really bad. I mean, the Republicans have been so out touch on affordability... one in four recipients of food stamps or SNAP has lost their ability to access food stamps.”at 3:17

Meredith Whitney · Meredith Whitney Advisory Group

A growing centrist trend in the US is showing up in Texas, where centrist Democrat Talarico is expected to win.

Whitney sees a middle ground among the voters she talks to. She cites Texas as the example: Talarico, a centrist, is expected to win, and a Democratic win in Texas would be a major move. She argues more and more people are centrist and that most voters do not relate to the extremes that dominate both parties, so a central trend is growing in the country.

“Talarico is a centrist. ... I expect him to win, that says a lot about the country... And I think more and more people are centrist... most people don't relate to what's going on with... either party.”at 7:06

Meredith Whitney · Meredith Whitney Advisory Group

Prediction markets have been unreliable forecasters, missing recent elections in Brazil and Israel.

Whitney says the polls and the prediction markets have both been so bad over the last elections. She cites Brazil and Israel as examples. This is why the outcome of the US vote is still in doubt, and she suggests people watching tonight are waiting to see what happens. Her point rests on the recent track record of prediction markets, which she describes as poor.

“the polls have been so so bad, and the prediction markets have been so bad over the last election, be it Brazil, be it Israel.”at 3:17

Meredith Whitney · Meredith Whitney Advisory Group

Headline consumer strength masks stress for lower-income households, visible in fast-growing pawn and daily wage access.

Whitney argues that banks lend mainly to prime and super-prime borrowers, so their data makes the economy look good. To see what is really happening for about 50% of households, she says you must watch stress indicators. Pawn loans have grown over 30% in the last few years. Daily wage access has grown like a rocket ship, as people move from paycheck-to-paycheck to payday-to-payday. The most relevant data sits with private fintechs such as Dave, Chime and Block, whose products are their fastest-growing lines. She says economists are not looking at this granular data.

“The banks lend to people who don't need money. They lend to prime and super prime. If you wanna see what's really going on with the economy with 50% of households, you have to look closer... pawn loans, which have grown 30 plus percent over the last few years.”at 5:12