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#477635 - 01/14/10 06:19 AM
Kalifornia Bonds
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Bilge Rat
Registered: 01/14/04
Posts: 11331
Loc: Massachusetts
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With California in such a fiscal mess, $20B shortfall last I saw and they stuggled to lower it to that point, who is going to buy thier bonds? Revenues falling, the state gov't not willing to take the actions necessary to curb spending, why would anyone buy thier bonds without a huge return on them? They were just down graded to A-, and I think that is a gift.
And secondly, is this a precursor to other states? My main concern here is the people's republic of taxachusetts. We seem to follow happily behind the big left side state even when it is obvious there are real problems with that game plan. Our taxes have spiked recently, sorry, "fees" have gone up recently, and the organized crime known as state gov't still can't comprehend a balanced check book.
Sorry, guess this has turned more into a rant than a question. I had just read a little on state budgets this morning and wondering how long till thier smoke and mirrors start a fire...
_________________________
"That's my boat..."
-Forest Gump
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#477654 - 01/14/10 12:20 PM
Re: Kalifornia Bonds
[Re: GoFirstClass]
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Admiral
Registered: 12/17/02
Posts: 9231
Loc: Takilma, Oregon
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From "California takes a Hit" Forbes wegsite, 18 hours ago. The safety net provided by bond insurance, from the likes of Ambac Financial Group ( ABK - news - people ) and MBIA ( MBI - news - people ), now looks tattered. In 2007, an estimated 60% of newly issued bonds carried insurance. The financial crisis crushed many of the insurers and caused rating agencies to pull their top grades. Last year, a mere 9% were insured, said Ashton Goodfield, head of muni bond trading at DWS.
States and cities issued a near-record $409 billion in bonds last year while tax receipts dropped off a cliff. Some 39 states expect budget shortfalls in 2011, estimated to top $180 billion.
_________________________
“I hope we shall crush in its birth the aristocracy of moneyed corporations which dare to challenge our government in a trial of strength, defy the laws of our country.” Thomas Jefferson "Corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will seek to prolong its reign by working upon the prejudices of the people until the wealth is aggregated in the hands of a few, and the Republic is destroyed." Abraham Lincoln
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