• Muni Bond Crisis: What Kind of Numbers Are We Talking? 21 Dec 2010
• Mier: Whitney is wrong on the need for State Government bailout 3 Oct 2010
• Schroeder: Gist of Whitney’s Muni Forecast ‘Valid’ 9 Feb 2011

• Muni Bond Crisis: What Kind of Numbers Are We Talking? 21 Dec 2010
• Mier: Whitney is wrong on the need for State Government bailout 3 Oct 2010
• Meredith Whitney: Next Shoe to Drop Is Municipal Bonds 28 Sep 2010

We are now seeing almost all our sell signals go off and we recommend clients hedge portfolios and reduce market exposure. We have advised clients in the past to hedge their portfolios and reduce exposure when all our sell signals have gone off. The last two times all our sell signals were activated was in January and April. In both cases the stock market performed very poorly one month out. We have continued to add new tools to our buy and sell signals. As the following chart shows, the sum of our signals is flashing a warning sign.

These signals typically lead to stock market sell-offs and forecast poor returns one month forward. I could do several letters from people I highly respect who suggest that hedging your portfolio might be wise as we go into the New Year. But this has given you a sense of what I am reading. As for actual timing? This market has been skewed by QE2. Things can remain irrational for longer than we would think. I would urge some real caution. As the guys at Variant note, there will be some opportunities to buy back in.

• Buyers Beware: Municipal Bond Prices Don’t Reflect Financial Stress 13 Jun 2010
• Stat of the Day: California now in top ten for highest government default probabilities in the world 12 May 2010
• Are munis the next shoe to drop? 6 Apr 2010

• State and local governments: budget cuts likely 18 Mar 2008
• Stat of the day: Illinois takes over from California as state most likely to default 22 Jun 2010
• State tax revenue down 26% in 2009 18 Jun 2009

• Meredith Whitney: more bearish than ever, but… 1 Dec 2008
• Meredith Whitney: “I haven’t been this bearish in a year” 16 Nov 2009
• Is Meredith Whitney bullish now? 13 Jul 2009

• State and local government weighed down by housing 23 Jun 2008
• Chart of the day: Clusterstock – How the AIG bailout worked 28 Jan 2010
• State and Local Government: What a Drag 21 Jun 2010

• Meredith Whitney: more bearish than ever, but… 1 Dec 2008
• Are munis the next shoe to drop? 6 Apr 2010
• Meredith Whitney: “I haven’t been this bearish in a year” 16 Nov 2009

• Meredith Whitney: “I haven’t been this bearish in a year” 16 Nov 2009
• Bill Miller and Meredith Whitney: The Bull and the Bear 14 May 2009
• Meredith Whitney: more bearish than ever, but… 1 Dec 2008

• Meredith Whitney: “I haven’t been this bearish in a year” 16 Nov 2009
• Meredith Whitney: more bearish than ever, but… 1 Dec 2008
• Whitney: The housing market surely will double dip 16 Mar 2010