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Brian Chappatta

Meredith Whitney Was Flat-Out Wrong About Municipal Bonds

Her call on massive state and local government defaults was way too early and might never pan out.

Still not right.

Still not right.

Photographer: Patrick T. Fallon/Bloomberg

“Being too far ahead of your time is indistinguishable from being wrong.”

That’s what Howard Marks, chairman and co-founder of Oaktree Capital Group LLC, wrote in a memo to clients about 11 years ago. Around that same time in late 2007, banking analyst Meredith Whitney made a prescient negative call on Citigroup Inc. that exacerbated a market sell-off and, she said, prompted death threats. Perhaps emboldened by that experience, she made another headline-grabbing prediction in a December 2010 broadcast of CBS Corp.’s “60 Minutes” program: There would be “50 to 100 sizable defaults” in the U.S. municipal market in the coming year, totaling “hundreds of billions of dollars.”