Mark Gongloff of the Wall Street Journal‘s Marketbeat blog wrote this today about Meredith Whitney:
Professional scary person Meredith Whitney took to the op-ed pages of The Wall Street Journal this morning to sprinkle some more of her fear dust on the muni-bond market:
Municipal bond holders will experience their own form of contract renegotiation in the form of debt restructurings at the local level. These are just the facts.
She makes some good points, frankly, and offers some alarming numbers.
I agree with Mark. Whitney has made some useful comments about the size of unfunded pension liabilities and the need for governors and mayors to address revenue shortfalls. Their need to balance budgets is not new, and most of them are aggressively finding ways to make cuts.
I also agree with Mark here:
The trouble is, the muni market is by now well aware of these concerns. Ms. Whitney’s message has also been muddied by how cagey she has been about her past pronouncements, throwing around mystical terms like “fifth-derivative dimensions” and declining to offer hard numbers or to explain herself in Congress.