Amazing crap here....
A congressional subcommittee that's investigating the implosion of the $3 trillion muni bond market wants Meredith Whitney "to come clean and explain her doomsday prediction of hundreds of billions of dollars in muni defaults over the next year," Charlie Gasparino reports.
I find this incredibly amusing, given the following report:
PROVIDENCE, R.I. (AP) — Federal regulators are investigating Rhode Island's bond offerings, adding it to the list of state and municipal governments to come under scrutiny by the Securities and Exchange Commission.
This is on top of Illinois and Pennsylvania issuers.
The problem? Pension funds, among other things. A black hole that I've often commented on. Given the state Constitutional issues with these funds, and the lack of a PBGC exit capacity for the States (in present law), there's little that can be done about it at this point too.
Will it detonate all municipal debt? No. But that's not what Merideth said. She said that there would be "many" defaults and reach hundreds of billions in face value.
I can believe that, although I think she's a bit aggressive on the timing. That is, I don't think the worst of it is 2011; it just gets worse from here. So I'd say the number is accurate but she might be a bit early.
The pension issues are an ongoing problem and until they're solved, they're not going away. Never mind Medicaid-cum-illegal-alien care. Yeah, I know, it's not illegal-alien care. Not officially anyway. Pull the other one.
I guess I shouldn't be surprised by any of this. The candy-emitting unicorn must not be disabused. Especially if someone might be led to understand what's really coming out of that animal's butt, and oh by the way, there's no such thing as a Unicorn either - that's just an old-fashioned bull and he's emitting.... well, you know.
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