Tn December, Wall Street analyst Meredith Whitney began predicting that the municipal sector would be increasingly insolvent going into 2011 and that many cities would default on their bond obligations. The predictions seem to be chasing away some investors from the municipal debt market, which could increase bond issuance rates. In an effort to shore up the market, the Washington-based National League of Cities (NLC) is forming a new municipal bond insurance company while also trying to convince investors that their fears are baseless.
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