Meredith Whitney on CNBC: Stay Tuned for Municipal Meltdown

Earlier on CNBC, analyst Meredith Whitney discussed her outlook for bank stocks and municipal debt. Late in 2010, Whitney made a call on municipal debt. In a segment on 60 Minutes, Whitney predicted that the US would soon experience a wave of municipal defaults. Thus far, her prediction has not played out. This has lead many commentators to criticize her for the call. Whitney stood by her call on Wednesday, telling her critics to "stay tuned." She stated that many municipalities around the country were in a state of default, even if they have yet to technically declare it. She drew parralels to the recent debacle in Greece, which had struggled with its debt for nearly two years before being declared a technical bankruptcy. On bank stocks, Whitney said that she had been bullish on JP Morgan JPM for quite some time. She stated that Citigroup's C failing of the stress test should not be seen as terrible--she believed that the failure was primarily due to a lack of communication: that Citigroup simply asked the Federal Reserve for too much. Overall, she thinks that large banks are still oversold, but they have come a long way. She stated that smaller and mid-cap banks are overbought. She said that Citigroup was not investable and would not be for years due to the quality of their capital. Whitney was bullish on Discover DFS and American Express AXP, which she called a terrific company.