Cities, Municipal Bonds and a Potential for Disaster

There’s hope that the U.S. can pull out of this economic slump it’s in, but there’s a potential disaster looming for states that could derail any economic recovery. Meredith Whitney, a financial analyst famed for predicting Citigroup’s major debt fallout, made a new dire prediction. She believes up to 100 U.S. cities could default on their municipal bonds.

Louise Story, finance and Wall Street reporter for The New York Times, and WNYC senior reporter, Bob Hennelly, tell why some of these states are in trouble, and the effects of such a massive number of defaults.