Specuulations on Cali debt. Default, bailout?

[Lars]

http://www.businessinsider.com/california-default-2010-11#ixzz15eEc1ZMS

[Sebastien Melmoth]

Yeah, now this is a funny story: just before the election Schwarzenegger finally reached a late budget deal with Sacramento leglislators: bottom line, CA is -19.BILLION in the red.

Then, just last week, just one week after the election, on a sudden Schwarzenegger announced in a emergency session of the leglislature to see about a -25.BILLION shortfall.

The timing on that seems queer.

Oh, yeah: and if CA had legalized hemp they'd have at least +2.BILLION a year out of it.

Smooth move...

[Sysiphus]

With Brown winning the governorship, at least it will happen a bit sooner.

[Sebastien Melmoth]

Oh, yeah, too, didn't Nobama already say 'no bailouts for states'?

[Sebastien Melmoth]

As if plutocrat nutter Meg Whitman would have been better...

[Auburn Boy]

With Brown winning the governorship, at least it will happen a bit sooner.

Brown will just propose raising taxes on an already strapped constituency and business population.

His M/O has been TAX, TAX, TAX.., (spend, spend, spend..,)

Funny how the projected deficit was $6 billion before elections, and now suddenly it has balooned to $25 billion.

[Sysiphus]

Brown will just propose raising taxes on an already strapped constituency and business population.

New taxes still require a 2/3 vote. So more likely, he will spend, spend, spend and come up with tricky new accounting gimmicks (like Arnie did). Whitman wouldn't be much better, but Brown has to placate the unions, so he will spend faster. The faster the spending, the sooner the final crisis.

[Sebastien Melmoth]

Rather, spending on public services will be cut, cut, cut.

Los Angeles is gonna be one rough town with all the unemployed with no benefits and no money...

Edit: just had to share this from Eureka CA
http://en.wikipedia.org/wiki/File:Carson_Mansion_Eureka_California.jpg

[leistb]

From ZeroHedge (http://www.zerohedge.com/sites/default/files/images/user5/imageroot/gono/Muni%20flows.jpg):

After a weeklong smackdown in muni securities of all kinds, both cash and synthetic (read CDO-like ETF time bombs), today for the first time we have seen confirmation that investors are starting to say enough. Reuters reports that for the first time since April 14, mutual fund investors withdrew a net $115 million from tax-exempt funds last week. "Funds are the largest players in the municipal market so to the extent there are outflows, that will put more upward pressure on rates[downward pressure on prices]? said Jack Bauer, managing director of fixed income at Manning & Napier, a money manager in Fairport, New York, who oversees $25 billion in assets. "It's been kind of ugly this week." See Jack Bauer is all confused - one would have though that 28 consecutive outflows (http://www.zerohedge.com/article/28-sequential-weeks-domestic-equity-fund-outflows) from domestic stock funds may have put in just a little "downward pressure" on stocks. Wrong and wrong - in fact stocks have proven that they levitate best on fraud, mark-to-krazy klowns, and scammery precisely when redemptions and Fed-Citadel involvement is highest. Which is why we expect that once there is no money left in stock funds (a few weeks at this rate) and in muni funds soon, muni will actually surge to never before seen highs as the bizarro effect appears in full force, and whatever muni ETFs are out there will do an SRS circa November 2008.

More at the link.

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/gono/Muni%20flows.jpg