Financial analyst Meredith Whitney has taken a lot of heat for her recent prediction that hundreds of municipalities are headed for default on their debt. But she’s not backing off her prediction and says muni bonds are headed for a plunge.

"When you have the first group of defaults you will see indiscriminate selling that would be a buying opportunity for some," the president of Meredith Whitney Advisory Group tells CNBC.

"There has been such complacency in the market and muni investors have been talked down to for so long.”

Whitney, who made her name as one of the first to see the extent of Citigroup’s woes in 2007, says the prevailing attitude is “'There's nothing to worry about, there's nothing to worry about' — they'll [muni bonds will] just fly."

But that’s not the case, she says. "We did this analysis in September. I was scared to death to publish the analysis, understanding that this was a massive deal, probably the biggest call I ever made. We put thousands of man hours into this project. It took over two years to do."

Government finances amount to a "daisy chain," she says.

Many agree with Whitney. Financial author Dan Solin writes on Huffington Post that his readers believe it’s obvious “municipal bond defaults will rise at an alarming rate. Now is the time to dump municipal bonds.”