Congressional Subcommittee Would Like To Speak With Meredith Whitney About Muni Bonds

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Apparently she's "rebuffed" their advances so far but they're planning to persevere.

The subcommittee, headed by Congressman Patrick McHenry, R-NC, has launched a broad investigation into the struggling market for debt issued by states and cities to determine, among other matters, whether states should be able to declare bankruptcy amid widespread fiscal woes, particularly in the Northeast, and exactly what has caused a sharp decline in prices in recent months.

As part of this inquiry, the subcommittee is looking into the validity of Whitney’s call made on national television that predicted between 50 and 100 major municipal bond defaults over the coming year, which would cost investors hundreds of billions of dollars in losses. The call sparked massive panic among small investors -- the largest purchasers of muni bonds -- because of the tax advantages. McHenry told FOX Business the subcommittee called Whitney to get to the bottom of the debate. “We want her to fill out her views one way or another,” he said.

But Whitney has so far rebuffed the committee's attempts to have her appear at the hearings scheduled for February 9, and there is talk on the committee about subpoenaing her to appear, as well as subpoenaing her to produce her controversial report on municipal bonds.

Congress Wants To Hear From Meredith Whitney [FBN]

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