Meredith Whitney's Municipal Bond Apocalypse That Never Came

Meredith Whitney, who had gained fame for correctly calling the banking crisis in 2007, went on 60 Minutes in December 2010 and predicted a massive wave of municipal bond defaults. She forecast 50-100 significant defaults amounting to hundreds of billions.

It never happened. Municipal bond defaults remained extremely rare and small in scale. The muni bond market actually performed quite well in the years following her prediction. Investors who sold their muni bonds in panic missed out on steady, tax-free income.

Whitney's advisory firm eventually closed in 2015. Her story is a cautionary tale about how one correct call can lead to dangerous overconfidence in future predictions.