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FBN’s Charlie Gasparino on why Meredith Whitney Advisory Group CEO Meredith Whitney claims July 1st was a key date for the municipal bond market to ...
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Whitney the banking analysts -- that doomsday prediction on major.
Didn't really happen but in her latest prediction that she said be -- of July 1 as a key date to watch for but.
Last we -- -- for what Charlie.
I'll.
She said that was a key date for the markets.
To be.
I mean -- -- once again.
To start having an implosion because that's when state budgets are crafted from the state budget to be small they would give less money -- the municipalities and that we see that the -- now.
With the agree with this or not negative most analysts mainstream medicine new market don't agree -- that this is such a big date.
But look at this chart and it is having an impact I find is this just blows me away that she a banking -- who has been wrong so far.
Is right on this if you look at that chart you can see a slight up tick in yield.
Member yield goes in the opposite direction a price that occurred you look to -- which is June that's June 27.
She made those comments on June 28 that's when the yields started to rise a little bit that means prices go down.
I'm telling you wish her comments are still having an impact in the municipal bond market.
Despite the fact that every mainstream analysts I talked to -- -- she should be ignored.
Investors are selling now they may be other reasons why.
But I'll tell -- if you look she's been on a lot of she's been doing a lot of Presley.
Big cover stories in fortune which by the way should you made statements that for example that 40% of Nevada's.
Budget goes to pay debt service not true according to the Nevada treasure it's much less of that less than 10% despite the fact that she's been corrected.
These statements are having an impact cannot -- you wanna talk to people like Dick -- again they say if -- -- -- out no matter how bad it's gonna get cities are cutting back.
They're talking on the high end if you just look at municipalities.
Three billion dollars in defaults.
At the most not the hundreds of billions of dollars if you throw in you know tax exempt hospitals -- all the other stuff you wind -- the market.
Dick Larkin in -- -- worst case scenario says about 20/20 billion.
Not the hundreds of buildings could she'd just -- early.
Let's just look at this from a different side could -- be right only a little -- here's what I worry she reminds me I said this before of -- he type.
The journalist journalists have Rolling Stone who comes to these who make -- generally good points but comes to these sort of wild.
Conclusions.
And if you look at the sort of details of those conclusions -- so much of the details wrong I mean -- -- thinks Goldman is guilty of fraud.
I mean criminal fraud Blankfein should go to jail -- -- because you know they shorted bonds that they sold to their investors and that's is a big -- between two.
Meredith Whitney thinks 40% of -- debt service.
Of all the -- budget of the product goes to debt service when that's not even close maybe to throw in the kitchen sink at all these other things right because the 40% but that's not that's not that's the former governor of Kansas Mark Parkinson.
That was right here on the show and he completely disagreed with the Muni bond disaster call that she made.
-- he's a governor.
And he feels that these.
States and these municipalities are always going to come around and figure out a way I mean there's good quality there's bad quality got a look at that municipal market for investors out there is a very specific market yes -- the -- general hospitals heroes city all different is different than Detroit but I will say this.
Though you know for her -- to be right a lot more has to happen that doesn't -- she makes -- -- Her broad point about the stress -- municipal bonds isn't true.
But the broad point asked that the five history is there another -- she came up with on the calendar we should look for.
The guide to life first with the last that was the last one that's when Dave you know I don't today July 5 I think I feel I think is New York City -- -- that -- Thank you Charlie Charlie Gasparino closing.
