Famed analyst Meredith Whitney, who ignited a firestorm of controversy last December when she warned that the U.S. will witness waves and waves of bond defaults by state and municipal governments (costing up to hundred billion dollars) reiterated her gloomy prediction.
Speaking to CNBC, Whitney defended herself against critics who accused her of exaggerating the state of municipal finances and stuck to her guns, though she hesitated to put a timetable on this epic collapse.
It's going to be big, she said. What was troublesome is people took [my prediction] that it would have to be this year. I never said that. But that's the size we're looking at.
Whitney, the CEO of the Meredith Whitney Advisory Group in New York, mentioned that while her other dire forecasts – including huge public sector layoffs and a double-dip in housing prices – have yet to happen, she maintains it’s only a matter of time.
She also said that state governments may be able to temporarily delay defaults in the short-term, but ultimately will have to take on even more debt – in excess of the revenue they can generate.
This is the sad reality of stuff that's going on, the sad reality of consequences of reckless spending, she said.
Shrugging off her critics, she added: I can't believe I'm the only person talking about it. That doesn't make any sense to me that we're [the only ones] shedding light on this. If people want to attack me, OK, I'm kind of used to it at this point.