Bloomberg News lands some real blows on analyst Meredith Whitney in a terrific story this morning.

Whitney, famously—or infamously—went on 60 Minutes in December and predicted that fifty to a hundred “sizable” cities and counties would go bust, defaulting on hundreds of billions of dollars of municipal bonds.

Since then, the risk-averse muni-bond market has tanked amidst controversy over whether Whitney’s call makes any sense.

She sparked a mini-panic with the help of a news program and then refused to release her report to show everyone why they were panicking (worse, 60 Minutes never asked her to back up her apocalyptic assertions). As Charlie Gasparino wrote in an excellent column a couple of weeks ago:

And yet, as the municipal market is crashing on her prediction, with deals being pulled and slashed in size, with prices falling and taxpayers having to pay extra so cities and states can sell debt, Whitney is refusing to release the actual report that would tell us how she came to such a brash, and unprecedented prediction, on the grounds that her research is proprietary and for the use of the clients of her research firm only.

It’s about time Whitney came clean and released her report to the public so we can determine if it should be given so much credence; and if it shouldn’t, traders and investors can stop a possibly misguided prediction from causing further damage.

Whitney didn’t release her report. But Bloomberg’s Max Abelson and Michael McDonald force her hand. They got hold of it and report that Whitney doesn’t have any numbers to back up her assertions—she pulled the numbers out of thin air.

Whitney gives them an embarrassing interview that includes these gems of gibberish (emphasis mine):

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.

Uh huh. Some analysis.

(A technical aside: I love that Bloomberg puts these nonsensical quotes in here. A lot of reporters would have passed them over for something that makes sense to the reader. I know I’ve done it. In that sense, we present a false picture of sources, making them look smarter and better than they really are. The smart thing to do here was to show how the source can’t talk straight.)

Whitney is the analyst who got famous calling Citigroup a dog back in 2007, and Bloomberg is good to point out that she was not the first to do so. She, a former Fox News talking head, married to a former WWE wrestler who at various points went by the ring names Bad Santa, Death Mask, and Vampiro Americano, was the most media savvy.

Whitney sent her report to her customers back in September, but the mini-panic gained steam six weeks ago with the 60 Minutes report in which reporter Steve Kroft asserted flatly at the top that “there is another financial crisis looming involving state and local governments.” Bloomberg notes that Whitney used the words “panic” and “social unrest” in other interviews.

The problem with using this kind of language is that the muni-bond market is disproportionately comprised of widows and orphans investors. It’s not a place where, say, Lloyd Blankfein is likely to put his money. Cyrus Sanati wrote in Fortune a couple of days after the broadcast that “investors in munis are normally quite risk averse - for them, Whitney’s view on the market was akin to yelling ‘fire” in a crowded theater.”

The impact of Whitney’s prediction was compounded by the fact that the 60 Minutes report came amidst fundamental factors that weakened muni bonds temporarily:

“The professionals on the Street kept saying, ‘These default numbers make no sense,’ and investors are saying, ‘All right, if you are correct, why is my portfolio down?’” (Citigroup bond analyst George) Friedlander said by telephone on Jan. 21. “The belief in this thesis of imminent mass default was dramatically increased by the fact that munis were falling”…

“She’s trying to shock the market into a panic mode,” said Thomas G. Doe, chief executive officer of Municipal Market Advisors, a research company in Concord, Massachusetts, said in a Jan. 20 telephone interview. “Nothing makes sense.”

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