EXCLUSIVE: The Meredith Whitney Muni Bond Report That Insiders Have Been Passing Around

Meredith Whitney

Nobody in the media has apparently seen Meredith Whitney’s mammoth report on municipal bonds.

But there is a 43-page summary that’s been floating around. It’s what Bloomberg’s Max Abelson saw in his big piece on her that was published yesterday. And we know others have seen it as well.

And now we have it. And since we believe in democracy, we thought we’d share the notable parts with you.

Now, warning. This is a well-traveled document. It’s clearly a photocopy of a photocopy of a photocopy. Much of it is totally illegible. But if you squint you can make out the arc of her argument.

UPDATE: Lawyers at MWAG have asked us to take down most of the document, but we’re leaving in our titles summarizing the arc of the report. We’ve replaced the images with pictures of Meredith Whitney.

The intro: Budgets are getting strained so much, that we'll see harsh or austerity or another massive bailout.

States have run out of options

Some key points. Not all states are in equally bad shape.

The table of contents

Here's Whitney's ratings for 15 key states.

Why is this a crisis now? Basically due to massive leverage and spending that grew unchecked.

See, everyone went spending crazy.

Meanwhile, the long-term pension issues are huge.

She then presents a state by state breakdown

How did we get here? Runaway spending, to start.

Then there's a table of how states spend too much

Meanwhile, real estate exacerbated growth.

And states are pro-cyclically leveraged to real estate.

The worst states are those most exposed to real estate


Meanwhile, revenue shortfalls have been aggressive.

And rainy day funds are empty

A look at year-end shortfalls

Meanwhile, states have been more dependent on the Feds than ever

And the budgeting process is complex, which means solving these issues will be tough.

Again, retirees and healthcare are the huge problems

State payrolls have exploded

Here's a look at when pension funds will run dry

Long-term debt issuance by state

Of course, historically, munis have been safe against corporates. Not anymore.

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