Meredith Whitney Stands By Muni Call; 'Biggest Call I've Made'
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Meredith Whitney is sticking by her prediction that the next big risk to the U.S. economy will be a wave of defaults of municipalities, despite criticisms over her forecasts.
The president of Meredith Whitney Advisory Group added that once the defaults begin to pile up, the muni bond market will see an exodus.
"When you have the first group of defaults you will see indiscriminate selling that would be a buying opportunity for some," Whitney said in an interview with CNBC. "Because there has been such complacency in the market and muni investors have been talked down to for so long—'There's nothing to worry about, there's nothing to worry about'—they'll just fly."
The comments from Whitney have drawn harsh reactions from municipal bond experts.
"We did this analysis in September," Whitney said. "I was scared to death to publish the analysis, understanding that this was a massive deal, probably the biggest call I ever made. We put thousands of man hours into this project. It took over two years to do."
The president of Meredith Whitney Advisory Group added that once the defaults begin to pile up, the muni bond market will see an exodus.
"When you have the first group of defaults you will see indiscriminate selling that would be a buying opportunity for some," Whitney said in an interview with CNBC. "Because there has been such complacency in the market and muni investors have been talked down to for so long—'There's nothing to worry about, there's nothing to worry about'—they'll just fly."
The comments from Whitney have drawn harsh reactions from municipal bond experts.
"We did this analysis in September," Whitney said. "I was scared to death to publish the analysis, understanding that this was a massive deal, probably the biggest call I ever made. We put thousands of man hours into this project. It took over two years to do."
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