CapitalAccount's video: Cate Long: Muniland the Happiest Place on Earth

check us out on Facebook http://www.facebook.com/CapitalAccount Follow us @ http://twitter.com/laurenlyster http://twitter.com/coveringdelta Welcome to Capital Account. Municipal bonds, traditionally seen as a safe investment, were the basis of Meredith Whitney's crisis warnings in 2010. She predicted hundreds of billions of dollars in defaults, telling CBS's 60 Minutes "there is not a doubt in my mind that you will see a spate of municipal bond defaults... fifty to one hundred sizable defaults. This will amount to hundreds of billions of dollars' worth of defaults... it will be something to worry about within the next twelve months." Yet her predictions failed to play out the following year. In turn, we have seen a spate of headlines proclaiming "Meredith Whitney Muni Call Was 100% Wrong." However, between 2010 and now, we have seen cities and counties run into trouble and in some cases file for bankruptcy, including San Bernadino and Mammoth Lakes (California), Central Falls (Rhode Island), and Jefferson County (Alabama). A few others cities have filed for bankruptcy but had their claims rejected. So is there a dark underbelly lurking in Muniland? And how might the fiscal cliff impact this $3.7 trillion dollar market? We talk to Cate Long about what is really going on in Muniland. In September, elected officials in Jefferson County, Alabama voted to settle with creditors to avert what would have been the largest municipal bankruptcy in the US. JP Morgan reportedly provided most of the toxic debt that devastated Jefferson County, and in 2009 the bank agreed to a 700 million dollar settlement with the SEC over secret payments to friends of Jefferson County commissioners. We talk to Cate Long, author of the Reuters' Muniland column, about how JP Morgan fared in this debacle. And might the fiscal cliff impact the tax free status of municipal bonds? It seems both republicans and democrats have agreed to consider taxing a portion of municipal bond interest. However some argue that much of the incentive for investors to buy municipal bonds is due to their tax free status, and without this municipal borrowing costs are likely to increase. Lauren breaks down municipal bonds in today's "Word of the Day." Plus, a few months after Wired dubbed Apple's mapping software fiasco "mapocalypse," the tech giant conceded defeat and allowed the Google maps app to operate on the iPhone 5. Lauren and Demetri discuss Apple's authoritarian business model in today's "Loose Change."