Remember Meredith Whitney’s apocalyptic predictions on the municipal-bond market last year?

Bloomberg News does. And it makes sure Whitney and its readers do too.

Whitney last year predicted a catastrophe in municipal bonds—hundreds of billions of dollars of defaults this year as state and local governments failed to make payments on their supposedly crushing debt burdens. She triggered a panic in the muni markets with a call that she wouldn’t or couldn’t back up, as Bloomberg pointed out back in February in a great piece:

“Quantifying is a guesstimate at this point,” she said. “I was giving an approximation of a magnitude that will bear out to be correct“…

“A lot of this is, You know it, but can you prove it?” Whitney said Jan. 30 over a breakfast of scrambled egg whites with a chicken-apple sausage, a side of salsa and peppermint tea at the Four Seasons Hotel in Midtown Manhattan. “There are fifth-derivative dimensions that I don’t think I need to spell out to my clients,” she said.

The sector Whitney predicted would collapse has instead been the best-performing part of the markets of the past year, up a tax-exempt 10.5 percent, Bloomberg reports.

Public debt benefited as Treasury yields plunged and investors fled volatile stocks, powering the Merrill muni index to its third-best showing in a decade. As the U.S. economy recovered from the longest contraction since the 1930s, revenue rebounded, state and local governments raised the taxes backing their bonds, addressed underfunded pensions, cut spending and borrowed 30 percent less than the record amount of 2010…

In the last four fiscal years, states closed more than $325 billion of deficits, according to the National Association of State Budget Officers.

So how many muni bonds ended up going bad this year? Bloomberg reports that muni-bond defaults have fallen 25 percent this year to just $2.1 billion.

Oops.

My favorite part of the story is tucked down toward the end:

She said last year after her September report entitled “Tragedy of the Commons” that state and local borrowers had too much debt and were a systemic risk to financial markets. She didn’t return a telephone call or respond to an e-mail seeking comment yesterday.

That reminds me of Bloomberg’s tough lede in July on where Whitney’s call stood:

Time is running out on the credibility of Meredith Whitney, who has yet to acknowledge that her eight-month-old prediction of widespread defaults this year in the market for state and local government debt is proving unfounded.

What’s nice about today’s story is that it’s just the latest in a series of stories by Bloomberg on Whitney’s call and what it has meant about the big muni-bond market. Best of all was that terrific piece in February that not only quoted her gibberish but called out her track record and raised serious questions about her analysis.

Good stuff.

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Ryan Chittum , a former Wall Street Journal reporter, is deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu.