Vindication! Does anyone remember Meredith Whitney?

Meredith Whitney is the highly-intelligent, beautiful, blond bond analyst who predicted massive municipal bond defaults a year or so ago. Here’s a Bloomberg story, written a year ago (July 15, 2011) by Michael McDonald. It begins:

Time is running out on the credibility of Meredith Whitney, who has yet to acknowledge that her eight-month-old prediction of widespread defaults this year in the market for state and local government debt is proving unfounded.

When the predicted defaults didn’t happen exactly on schedule, she was effectively hounded out of her job and her reputation was trashed by jealous (?) male rivals. What are they thinking now? What about the recent declarations of bankruptcy by San Bernardino and Stockton, Vallejo, Scranton, Jefferson County, Ala?

Haven’t these startled any of her critics awake?

Bloomberg must have searched high and low

for the ugly photos they used in the story.

Look what they found (It’s to laugh!)>>>>>>>>>>>>>>>>>>

Any apologies? Not exactly, but CNN Money ran the following piece, “Meredith Whitney was right” on March 12 this year. Thank goodness.

Over at Bondview.com, we can see in an interesting June 27, 2012 article summarize the current state of the municipal bond market and describe why there hasn’t been a flood of public apologies.

Robert Kane, CEO of Bondview.com said “Many defaulted or impaired bonds are concentrated among smaller bond issuers that trade infrequently, are no longer rated by the big 3 rating agencies and have minimal news coverage.” This has resulted in very little useful information being available for retail investors or professional advisors.

Other coverage: http://www.bondview.com/blog/more-bond-defaults-starting-to-hit-as-taxpayers-pay-the-tab/

What Whitney may have missed, or not understood, was that governments have budget tricks to hide debt.  And, of course, force. They hit the taxpayers for more money: “Surprised local taxpayers from Stockton, Calif., to Scranton, Pa., are finding themselves obligated for parking garages, hockey arenas and other enterprises that can no longer pay their debts.” From the Bondview article linked above.

Here’s a list of the top 100 largest defaulted municipal bonds: http://www.bondview.com/defaultedbonds/largestdefaults

The only problem with this list is that we couldn’t find a date for when they defaulted. But you get the picture.

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About InvestingforOne

I've been investing in various assets by myself using a discount broker for many years. Over that time, I've developed some theories that others might find useful. Plus, there is more to investing than money. Time, talent, work, friends, family all go into developing a good and satisfactory strategy.
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One Response to Vindication! Does anyone remember Meredith Whitney?

  1. This just in … to my email inbox, WSJ’s Deal Journal had a piece on this very topic! Coincidence?
    http://blogs.wsj.com/deals/2012/07/11/three-bankruptcies-in-california-whitney-still-not-right/?mod=djemDeal_t

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