Meredith Whitney, the Oppenheimer analyst who was one of the first to forecast the travails of Citigroup last year, told CNBC yesterday that she was very bearish on the prospects for the housing sector over months to come.
She claimed that prices might drop by more than a third before banks relaxed their mortgage restrictions.
"I think it's going to be well worse than 33 per cent," she said.
"If you look at the futures market, it's indicating a range right around between 2002-2003 levels, when home ownership rates were actually higher, but fewer people can qualify for a mortgage because you've got to put 20 per cent down, and that's a lot of money for people.
"Furthermore, then you've got to find a bank to lend to you."
In 2007, Ms Whitney was one of the first to point out that Citi was drastically under-capitalised compared to other banks - and would suffer in the credit crunch.
Since the forecast, the bank has written off over $40 billion of assets due to the crisis, making it the worst-hit of all Wall Street firms.