Meredith Whitney: State finances threaten recovery

NEW YORK (Reuters) – The dire condition of state and local finances threatens the country’s economic recovery and must be addressed immediately, prominent analyst Meredith Whitney wrote in an op-ed column in The Wall Street Journal on Wednesday.

In a separate interview on Bloomberg radio on Wednesday, she stuck by her prediction that more municipal bond defaults lie ahead, but added a qualification. “I never gave precise estimates or a specific period of time,” she told Bloomberg.

Whitney made her reputation by correctly predicting in 2007 that Citigroup would need a massive capital infusion. Last year, she rocked the $2.9 trillion municipal bond market by her forecast of massive numbers of bond defaults this year.