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Don't Use History To Predict Fate of Municipal Bond Market

Wall Street analyst Meredith Whitney triggered panic in many municipal bond holders when she declared last year that municipal bond defaults - possibly 50 to 100 - were on the horizon, due to the debt-laden condition of state and local government budgets. Although some financial analysts have criticized Whitney for muni-bond warnings they say are overblown, she's not the only one predicting municipal bond market trouble. JPMorgan Chase & Co (NYSE: JPM ) Chief Executive Officer Jamie Dimon said last month he expected more defaults this year, and Money Morning Contributing Editor Shah Gilani said Whitney is not crying wolf, as others have claimed. "Make no mistake: The so-called ‘ deadbeat states ' problem is real, and muni-bond defaults are almost certainly unavoidable," said Gilani .
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