Meredith Whitney Warns of Detroit Muni Bond Vicious Cycle

By on July 25, 2013

Meredith Whitney Advisory GroupMeredith Whitney issued a dire warning to CNBC’s Maria Bartiromo yesterday following the Detroit bankruptcy.

Whitney said Detroit was setting a precedent and investors should look carefully at their municipal bond portolios because aftershocks were inevitable. The cutting of services was setting up a vicious cycle, Whitney warned.

Whitney took substantial heat for her previous view a couple of years ago that there would be numerous municipal defaults which did not come to pass.

Bartiromo asked Whitney to comment on an unflattering Wall Street Journal article from last month [link]. Whitney said the article wasn’t factual.

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