More Pain Coming For Muni's As Moody's Cuts L.A. G.O. Bonds

Perhaps Meredith Whitney will ultimately be proven right, as Moody's is on a cutting spree, and has just cut Los Angeles General Obligation bonds from Aa2 to Aa3.

Late last year, Whitney had predicted that "you could see 50 sizeable defaults. Fifty to 100 sizeable defaults" amounting to "hundreds of billions of dollars."

So far, Whitney has been proven wrong, as the amount of municipal defaults has been next to nothing, but if Moody's continues to cut credit ratings on GO bonds, her call could look incredibly smart, albeit unwarranted for a country struggling to deal with debt and deficits.

Whitney first gained fame in 2007 when she said that Citigroup (NYSE: C) was going to need to raise billions of dollars in capital, as the bank was not adequately close to being well capitalized. She left her firm Oppenheimer, and when to start her own firm Meredith Whitney Advisory Group.

Whitney is married to ex-wrestler and noted financial columnist John Bradshaw Layfield.