Analyst Meredith Whitney may enjoy rock star status on Wall Street, but that rank comes with a downside--lots of scrutiny. Case in point: Her bold prediction of a super-bear market in municipal bonds. In a lengthy report that was heavily marketed, her firm forecasted a lot of pain and perhaps 50 to 100 muni defaults in 2011. That has spawned a lot of criticism by various pundits and some state and local officials around the country.

Bloomberg weighs in with a piece that benefitted from an interview with the analyst herself. Some think her firm's analysis of the muni market was a little light,  to which she responds, "A lot of this is, You know it, but can you prove it? There are fifth-derivative dimensions that I don't think I need to spell out to my clients."

She also told Bloomberg she did not recall using the word "panic" in a quote that was attributed to her and that her phrase "social unrest" now seems "very loaded" because of the unrest sweeping Egypt.

We'll just have to see how all of this pans out. But we could be in for more interesting bond analyses if her firm is successful in being designated an official credit rating agency by the SEC. The more credible research, the better, as far as I'm concerned.

For more:
- here's the article

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