Meredith Whitney, the market analyst who predicted the demise of Citigroup several years back, is now forecasting a sharp rise in municipal bond defaults. Her 60 Minutes interview in December triggered a deluge of bad press for the municipal securities (and a lot of dissenting opinion). No doubt, Whitney’s jeremiads will also be on the minds of the House Oversight and Government Reform subcommittee members at this week’s hearing – State and Municipal Debt: The Coming Crisis? At very least, her forecast is likely to strengthen the push for stronger regulatory oversight of muni debt, currently being explored by the SEC.
(Thanks to Rick Palacios Jr.)