Bank analyst Meredith Whitney—who made a name for herself with a prescient call about Citigroup’s write-downs during the financial crisis—is again drawing notice for a bearish prediction.
Lately, however, she has turned her sights from debt in the corporate sector to debt in the public one: municipalities.
In an interview broadcast on “60 Minutes” Sunday night, Whitney, who runs the Meredith Whitney Advisory Group, argued that the $3 trillion municipal bond market faces the immediate threat of hundreds of billions of dollars in defaults.
That notion has put the investment community on the defensive Monday, as bankers and analysts scramble to reassure investors and clients that the market isn’t about to fall to pieces.
“She’s being alarmist,” said one of the largest municipal bond portfolio managers in the country, saying that Whitney’s appearance drew immediate concern from both his portfolio and research colleagues when it aired on Sunday night.
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