Meredith Whitney appeared on Bloomberg Surveillance with Tom Keene this morning and talked about Jamie Dimon's testimony before Congress, saying that "He is, like nobody else, the antithesis of Blankfein. He charms. He's incredible. He gave the senators a massage and they gave him a massage back."

Whitney also said that, "I don't think this could have happened at a worse time for the banking industry."

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Whitney on Jamie Dimon's testimony before Congress last week:

"He had a couple tough questions, but he is, like nobody else, the antithesis of Blankfein. He charms. He's incredible. He gave the senators a massage and they gave him a massage back. You see a complete juxtaposition between the two, and it's theater...I think what you saw last week is everybody's trying to argue for, oh, JPMorgan, come rebuild your branches in our hometowns and create jobs. As we said, it's political theater."

"I don't think this could have happened at a worse time for the banking industry and I was surprised that things went as well as they did last week. I was very surprised because it's a very difficult trade to explain. I don't think it's been explained well at all...Hedging for credit and to take such a disproportionately weighted bet seems curious to me...What's clear in the last couple of months is that it's hard to argue that some of these transactions aren't proprietary trades."

On Dimon saying that increased regulation will stymie bank lending:

"I just don't think so. It stymied the velocity of money, the velocity of liquidity in the system because you have to hold more capital. It just slows down the system. But in terms of lending, absolutely not. The fact is, so much of the loan book is mispriced across the market. So you have to have re-pricing in the market. Banks have to figure out a basic way to make money again."

On whether banks are not lending to small business because of fear of increased regulation:

"This is the biggest misconception about small business. Small businesses fund themselves like consumers. So small businesses have funded themselves since the early 90s with home equity loans and credit card loans, and those are both contracting. So it's not that banks are not lending to small businesses. Banks aren't lending to consumers."

On Citi:

"I still think of Citi as a pre-reverse split-type institution, a $2.70 stock. That's down from $47 or mid $40s where I made a call on October 31, 2007, and it hasn't come back. It's not going to come back."

On whether banking is reinventing itself:

"It has to. It so clearly has to. Over the last 15 years you've seen incredible consolidation and this too-big-to-fail concept and the supermarket structure evolve. It's so clear that the supermarket structure doesn't work anymore, so the big banks are getting smaller and the smaller banks are getting bigger. I think that you will see a very different financial market in 5-10 years. Very different than you see today."

On the U.S. economy:

"It just has to rebalance itself. So the areas that grew our economy the last 30-50 years are the ones that are the most challenged and struggling right now. So you're rebalancing that with the center part of the United States that's booming. So you go to Texas and Oklahoma and North Dakota. Some of these states have very small populations but are getting incredible immigration and emigration from California and high tax zones, so the U.S., this is great. Every 60 years or so the U.S. economy reinvents itself. It's in that process right now regionally. And it just takes time."

On whether to invest in regional banks now:

"I think there will be banks you are going to be able to buy. That's where the real growth is. Ultimately, the big banks are going to be much smaller institutions. So you want to be not only where institutions are getting bigger, but also where the markets are getting so much bigger. So huge tail winds from the central corridor. I'm sure people can figure it out for themselves."

On Glass-Steagall:

"Well, you think about what happened over the last 15 years and is the system better for it? So Tom Hoenig who I think is one of the smartest financial leaders argues is that the U.S. was an incredibly dominant financial super power for 25 years when industries were specialized, and you had higher profitability. Once you got to this supermarket structure and too-big-to-fail system and post-Glass-Steagall world, you had pricing just marginalized. And if you look at your but for leverage, these institutions just weren't that profitable. so because margins became razor-thin, they had to take more and more risk. And in doing so, with depositor's money or at least the benefit from a lower cost of funds from depositor's funds, meaning a higher credit rating because they had these banking divisions."

On what concerns her most right now:

"I cared about and I still do, about the reconstitution of the United States. The demographic shifts, the state arbitrage, where businesses are moving. You have more businesses investing outside of California in other states like Texas, Oklahoma, Indiana. More business development in those states. And rich people, by the way, have the greatest mobility. So you leave these ghost towns with high structural unemployment, a very low tax base, and these towns keep having to raise taxes, which you get the flight of the deep tax base anyway. So the bond market is a side event of all of this. What really matters is the real divide between have and have nots in this country. Where you want to be invested. Where businesses want to be invested. Because in these towns where businesses are leaving and taxes going up, home values are going down and are continuing to go down."