Amid ongoing reports that the recession will continue for cities and counties for another year or more, in December Wall Street analyst Meredith Whitney began predicting that the municipal sector would be increasingly insolvent going into 2011 and that many cities would default on the bond obligations. In his blog, Washington-based National League of Cities Director of Research and Innovation Christopher Hoene says Whitney's predictions are unfounded and argues that the municipal bond market is essentially stable.
American City and County talked to Hoene about why Whitney's dire predictions are not likely to come true, but also what might happen if such reports become a self-fulfilling prophecy due to investor panic.
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