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"Just how dangerous is California's budget crisis?
Extremely dangerous, according to two recent evaluations of California's debt by financial industry insiders.
California's debt is seen by investors as riskier than Kazakhstan's, according to Bloomberg News. Five-year credit default swaps tied to California's debt, which are a key measure of the market's belief in the likelihood of default, are actually trading at 100 basis points above those of Kazakhstan. In other words, the market believes a developing country of just 15.7 million people is actually less likely to default on its debt than California, which makes up the eighth-largest economy in the world."
I think you need to do a little googling regarding speculative municipal bonds.
In any event, I relish the opportunity to educate people on California.
California will never go into default. Point Blank. Never.
Why?
Because California's State Constitution mandates that bond repayments take precedence over all spending except education.
The state will bleed dry any and every agency and program but it will NOT miss its bond payments. Try as speculators may, its virtually impossible for the state to default, even at this point.
Now, digest all of that very key info and then get back to me if you have any further questions.
Say what you want about California but the state is no deadbeat.
I think you need to do a little googling regarding speculative municipal bonds.
In any event, I relish the opportunity to educate people on California.
California will never go into default. Point Blank. Never.
Why?
Because California's State Constitution mandates that bond repayments take precedence over all spending except education.
The state will bleed dry any and every agency and program but it will NOT miss its bond payments. Try as speculators may, its virtually impossible for the state to default, even at this point.
Now, digest all of that very key info and then get back to me if you have any further questions.
Say what you want about California but the state is no deadbeat.
"SACRAMENTO, Calif. — Gov. Arnold Schwarzenegger, the state controller and treasurer decided Monday to delay $2.9 billion a month in payments to school districts and counties sooner than expected so the state can meet debt and pension obligations."
"So where in the world are the taxes going to come from to pay for all of these obligations?
It is hard to see a way out of this mess, especially considering the fact that California's economy is coming apart like a 20 dollar suit.
Right now businesses are shutting down in California at an alarming rate. In the region around Sacramento there is now one closed business for every six that are still open.
Not only that, but unemployment in California has reached unprecedented levels. There are now 8 counties in the state that have unemployment rates of over 20 percent.
To put that in perspective, consider the following. The number of people now unemployed in the state of California is equal to the populations of Nevada, New Hampshire and Vermont combined.
Yes, things really are that bad in California.
Nobody has a safe job anymore - not even teachers. Just recently, the state of California handed pink slips to nearly 22,000 teachers across the state.
Can you imagine firing 22,000 teachers?
Unfortunately, firing all of those teachers barely even made a dent in California's budget problems.
California Governor Arnold Schwarzenegger is pledging to seek "terrible cuts" in an effort to get California's financial situation under control, but the truth is that there are not many more areas that can be slashed without voter approval. Bob Herbert of the New York Times recently described California's horrific budget crisis this way.... California has cut billions of dollars from its education system, including its renowned network of public colleges and universities. Many thousands of teachers have been let go. Budget officials travel the state with a glazed look in their eyes, having tried everything they can think of to balance the state budget. And still the deficits persist."
Your right they can't go into bankrptcy but you are wrong as to why.
"Say the state can't make its debt payments, and no one will lend it any more money. In that case, the federal government can step in and put the state into receivership. This would involve the assignment of an accountant to manage the state's debt, overseen by a judge. It would be a lot like bankruptcy, except instead of following a structured set of steps—informing creditors, appointing creditors' committees, a 120-day window to file a plan, etc.—a receiver has the authority to force creditors to renegotiate loans in a speedy fashion. However, the accountant in charge would not have the power to make decisions about the state's budget, such as which programs needed to be cut and which taxes had to be raised. (No state has ever gone into receivership.)"
So yes we will be on the hook for California's stupidity.
By the way let me help you with a little education my friend. Municipalities can and do go bankrupt. Do a little Google yourself. OrangeCounty.......
Last edited by shorebaby; 11-04-2010 at 10:45 PM..
On Clinton's watch, the perpetrators were apprehanded, prosecuted, found guilty and sent to a SuperMax facility, where they'll remain for the rest of their lives. No secret courts, special prison camps or half-baked invasions.
I still remember how Clinton fired off a long range missile supposedly at Bin Laden only to bomb an Aspirin factory then proclaim "we got him".
I still remember how Clinton fired off a long range missile supposedly at Bin Laden only to bomb an Aspirin factory then proclaim "we got him".
Can you say FAIL.
Well, yes. As in, you fail modern history.
The attack on the Khartoum plant was based on (probably bad) information that it was producing a VX precursor. It was never an attempt at striking bin Laden himself and Clinton obviously didn't proclaim anything of the sort. Partly because bin Laden wasn't the target of the strike, partly because Clinton didn't speak like he was in a John Ford western.
Of course, the loyal opposition was busy yelling "Wag the dog" at the time of the strike, because terrorism was a minor distraction - the important item on the agenda, as set by the Republicans, was the President's sex life.
Why stimulate their struggling economy when I can have Texas made wine which is just as good if not better & stimulate ours?
I think I'll have a glass of Llano (not Llano California) to that.
*Cheers*
I'm sure most Texans would hope that you would stop already. Every time you attack California it opens the door to what Texas is really like: a Bible-belt hick as governor considered the most corrupt in America. A Republican state that is afraid of science so the Texas Board of Education promotes "creationism." A history of morons who can barely speak English [Bush]. A pro-corporate state where big business screws fellow Texans [Enron] and the state attorney general does nothing. Virtually no unions, one of the stingiest states for helping the unemployed. A huge deficit bigger than California and no way for Texas to recover.
Please you are seriously embarrassing your fellow Texas citizens.
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