FBN’s Charlie Gasparino reports that a congressional subcommittee investigating the recent implosion of the $3 trillion muni bond market wants banking analyst Meredith Whitney to come clean and explain her doomsday prediction of a wave of defaults by states, cities, towns and borrowers. Whitney’s pronouncements on municipal bonds have been blamed for some of the shakiness in that particular market.
As part of this inquiry, the subcommittee is looking into the validity of Whitney’s call made on national television that predicted between 50 and 100 major municipal bond defaults over the coming year, that would cost investors hundreds of billions of dollars in losses.
Many small investors unloaded their bonds, and redeemed shares of municipal bond mutual funds, at a loss.
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