Back in December bank analyst Meredith Whitney was featured on 60 Minutes saying there would be 50 to 100 muni-bond defaults and that it would be as big a meltdown as the real estate crash.
Her critics have savaged her in the press and now “Ms. Whitney is also drawing scrutiny from Washington, where a Congressional panel will meet on Wednesday to examine the turmoil in the muni bond market, including whether Ms. Whitney’s call has fed the volatility and allowed some investors to profit unfairly,” the New York Times reports.
It turns out Ms. Whitney is already booked and has declined the House Oversight and Government Reform panel’s invitation to come and have chat with them. This doesn’t sit kindly with Representative Patrick T. McHenry, Republican of North Carolina, who says “This isn’t a gotcha thing, but she’s going to be part of the hearing, whether or not she participates. If she doesn’t want to come forward in a venue like this, that makes a statement.” Having prior commitments is not reason enough it seems. McHenry wants to have a look at Whitney’s record.
Ms. Whitney has refused to release her September report predicting trouble in muni-land or to provide a copy to Congressional staff.
Investors already were pulling money out of municipal bond funds before Whitney’s 60 Minutes appearance, but in the weeks since it aired, the pace of withdrawals has accelerated, with more than $14 billion coming out between Dec. 22 and Feb. 2.
