Back in late 2010 on the program 60 Minutes, Meredith Whitney (who runs her own advisory firm) famously warned of 50 to 100 "sizable" municipal bond defaults starting in 2011. But essentially none occurred last year.

However in just the last two weeks, three California cities all with populations of more than 200,000 have filed for bankruptcy protection. And in Scranton, Pennsylvania, Mayor Chris Doherty recently slashed public employees' pay to $7.25 per hour. The city reported it only had about $5,000 in the bank.

The majority of revenue for municipalities comes from property taxes. And when property values fall like they have the last several years, so does tax revenue. Of course, municipalities decide the value of a property for tax purposes, so it should come as no surprise that property taxes haven't fallen in lock-step with property values. But nonetheless, many cities across the country have seen tax revenue plunge in recent years. And now some fairly large cities have become insolvent.

So is the recent increase in municipal bankruptcies a sign of more to come? Or are cities just facing a temporary liquidity problem? I, for one, think Meredith Whitney was just a little early in her prediction.