Power Point: Whitney warns of state troubles

"If previous crises provide any indication of what lies ahead, FY2011 may be even more challenging than 2010."

-- Meredith Whitney, or Meredith Whitney Advisory Group, in a report on mounting fiscal troubles for state governments. After riding the boom and bust in real estate, 48 states are underfunded for fiscal 2010, she notes. State and local government spending accounts for 12% of U.S. GDP. Whitney's conclusion: When state governments lower costs to balance their budgets, they'll be cutting spending programs and jobs that will weigh on overall GDP.

Meanwhile, the Pew Center released its own dire analysis of the states' fiscal conditions. With the Dow hitting another 13-month high today, it might be prudent to swallow a dose of caution by reading "10 states face financial peril."