Meredith Whitney spoke with Bloomberg Surveillance to discuss what she knows best, the banking sector. The news for that sector, Whitney said, is not very good, as she expects the industry will lose more than 50,000 jobs due to shrinking revenues. Moreover, she said “I would argue the banks have not overfired and are really middle of the way through firing,” which is an ominous warning sign about the financial sector.

Timing is the trickiest thing in this existence, and things happen when you least expect it, but Meredith Whitney has been pretty consistent with her calls on banking and finance, nailing the financial crisis and repeatedly stressed the inadequacy of bank practices even after it appeared the economy was trying to get back on its feet again, and warned of municipal defaults back in 2010 and now, guess what? Our cities are going bankrupt.

“It’s bad. If you look at the European banks reporting earnings today, it’s a reflection of the same that the old way of making money for Wall Street for so many of the banks that became real Wall Street driven revenue machines is gone. That was driven by the unsexy world of housing and leverage. The world as deleveraging—at least the post-modern world is deleveraging. It puts real sustained pressure on revenues and the business models just have to shrink,” said Whitney.

Basically she’s saying the megabanks that are too big to fail and propped up by our privately owned central banks have to play a new game, but the problem is their books and balance sheets are filled with so much hidden garbage that actually seeing it would make one’s head spin.

And no, Whitney is not some alternative media “conspiracy theorist” that’s always bearish, as she feels that the recent raise in capital requirements by the government, which has ultimately hurt the mega banks was uncalled for: “I would like to see the government streamline regulation and actually back off of some of the capital requirements, Whitney says. “The market is telling you how the banks should access capital. The market is pricing access to capital for the banks and the government is really adding insult to injury in the financial industry by layering on so much increased capital pressures and so much increased regulation.”

Thus, she is critical of the government as well: “Dick Kovacevich said it better than anyone—it was not a lack of regulation that got us into this mess. It was a lack of enforcement of regulation that got us into this mess.”

And if she was asked to be Barclay’s CEO, Whitney responded: “No. I think that’s a really scary position. But I think there’s going to be a surprisingly excellent candidate that will take that position.”

You can listen to the interview HERE.

To be fair, Miss Whitney must also account for lawsuits and enormous fines that are likely to come from the Libor interest rate fixing scheme, as well as hidden losses such as the ever changing billions lost by JP Morgan Chase in its derivatives trade. However, she’s looking at things straight up and is believing the balance sheet in many instances, and even using that doctored information, Whitney is saying the squeeze is going to be harsh.

I don’t think it’s a stretch to say that most people understand that they feel that times are tough and will continue to be so, but what’s also happening is a literal collapse of the financial system around us because it’s broken. The paper money system based on debt and put on computer screens and manipulated by our megabanks and used as bribes for our politicians is falling apart because you can’t keep running a crooked system for so long without something going wrong. There were too many greedy cabal that wanted us all gone and now the system is falling apart.

You’ll hear and watch it on television in different ways when I refer to the system falling apart, with figures like Nouriel Roubini talking about how we should hang the bankers, and he’s just known as a perma bear in mainstream media circles – this is a mainstream guy, not some NWO denouncer at UFO conferences. You’ll hear Bill Gross repeatedly reminding investors of the scam money system and you’ll find self taught analysts and traders that will go on and on about energy market and gold and silver price manipulation by the banks and will show you the information as to how that occurs, etc. – translation: our system is a scam, and here’s reason # 12434566 why it’s falling apart or going to fall apart.

So, like a countdown, we tick, day to day, waiting for that eventual occurrence that is the moment when the system just goes down.