NEW YORK ( TheStreet) - JPMorgan Chase ( JPM) CEO Jamie Dimon sent more shivers through the municipal bond markets this week, indicating that more troubled cities may default on their debts.

"There have been six or seven municipal bankruptcies already," Dimon said on Tuesday at an annual health-care conference sponsored by JPMorgan in San Francisco. "I think unfortunately you will see more."

He added that: "If you are an investor in municipals you should be very, very careful."

Fears have risen in recent months about defaults in the municipal-bond market, as states, cities and towns face huge budget gaps. Unemployment and the economic slowdown have left them with less tax revenue, forcing big cuts in service or tax hikes to make ends meet. California, New Jersey and Illinois are among the states with big budget issues, while Harrisburg, Penn., and Detroit are among the troubled cities. Lots of cities are expected to be unable to meet obligations if they can't tighten their belts within the next few months.

Dimon isn't the first financial big-wig to cite concern about the municipal bond market. But as head of one of the largest banks in the country warning about additional defaults, his comments carry weight.

-- Written by Lauren Tara LaCapra in New York.

>To contact the writer of this article, click here: Lauren Tara LaCapra.

>To follow the writer on Twitter, go to http://twitter.com/laurenlacapra.

>To submit a news tip, send an email to: tips@thestreet.com.
TheStreet Tools
* Ex-Dividend Date Calendar
* Top-Rated Stocks
* Highest-Yielding Stocks
* 2011 Earnings Calendar
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

If you liked this article you might like

The Federal Reserve Is Now Ready to Blow It All Up

Bank Stocks Move Higher Ahead of Federal Reserve Meeting

CEOs Focused on Tax Reform, Business Roundtable Survey Says

All Eyes on the Godfather of Central Banking as Fed Has Huge Meeting This Week

Chase Hires Amazon Customer-Service Exec as Digital's Rise Reshapes Branches