Meredith Whitney On Munis
June 11, 2013 2:54 PM
In a Feb. 7 interview with Bloomberg News’ Tom Keene, when Keene asks Whitney about her municipal bond default projections: “I’ve gotten so much attention to a municipal bond call. That’s not my area of interest.”
In an interview in March with CNBC’s Maria Bartiromo, when asked where the opportunities for muni bonds are given her new book’s conclusion that prosperity is moving from the East and West Coasts to the middle of the country: “I’ve always been interested in the equity play, not the bond play …. The municipal bond market I don’t find an interesting area to play this because not only is it illiquid, but you’re not going to capture the same level of growth and upside as you will with equities.”
In a June 3 interview with The Bond Buyer: “I never focused on the municipal bond market. I more focused on state arbitrage if anything.”
In a June 4 interview with Steve Forbes on June 4 when he asks her if muni bonds have been mispriced: “Back in 2010 as you mentioned the 60 Minutes piece, the bond market sold off dramatically, rallied dramatically. I didn’t expect the sell-off.”
Steve Forbes asks in the June 4 interview, how many outstanding munis will undergo a haircut over a period of years: “You’re trying to trap me into that 60 Minutes thing again.” Forbes says, “No, I said over a period of years.” Whitney responds: “I think what will happen is it will be clear that the municipal bond market is mispriced for risk. And certain bonds will be restructured because of the issue of willingness. Why is the rich guy getting a full bond payment when my kids have a 30 student-to-teacher ratio? Or this bridge has not been fixed in 10 years.”
In a June 5 interview with USA Today: “The book was not written to be provocative ….. If you had told me in high school I’d write a book about municipal finance, I’d have said, “That’s so lame.’”
In a June 7 interview with Richard Satran, senior investing editor for Money and Personal Finance at U.S. News, when asked about her comments about muni defaults on 60 Minutes: “I’m not a municipal bond market analyst …. I told them there were problems in them muni market. Fiscal problems and there would be losses in the billions …. It was never my intent to make a call [on munis].”
