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Prominent bank analyst Meredith Whitney comes out swinging at critics in her debut book, “Fate of the States.”
The Wall Street financial analyst, who made headlines with her accurate 2007 prediction that Citigroup would cut its dividend amid the unfurling financial crisis, says she was “pilloried in the financial press” after she warned of looming state- and city-bond defaults resulting from budget shortfalls.
Whitney, who made her forecasts on CBS’s “60 Minutes” back in December 2009, blasted critics who claim her prediction of municipal-bond defaults suggested they would all happen at once: “For the record, I never said those 50 to 100 defaults would all happen in 2011.”
The new book, which The Post has previewed, is due out June 4.
Whitney points out that municipal-bond defaults did indeed increase 400 percent to $25 billion from $5 billion in 2010, according to the trade newsletter Distressed Debt Securities.
To be sure, even a $25 billion default is still a relatively small number, given the immense size of the multitrillion-dollar muni-bond market, to which cities and states turn to fund building projects as well as payroll for teachers, police officers and firefighters.
Whitney’s book, which bears the subtitle “The New Geography of American Prosperity,” also points out that the financial crisis stirred up by the housing boom has shifted prosperity away from coastal municipalities and to the interior states, which faced a softer wallop from the bursting of the bubble.
“Effectively, the central corridor of the United States will be the new emerging market of the country — the same role Alberta played for our neighbor to the north, Canada — with outsized growth, greater employment opportunities and lots of new arrivals from states with higher taxes, shrunken police forces, and declining public schools,” she writes.