Posted on 12/12/2008 9:10:11 AM PST by NormsRevenge
California's credit rating was dinged Thursday by Standard & Poor's, which cited the state's worsening budget crisis.
The firm's rating on $5 billion of short-term notes the state sold in October was cut one notch, from SP-1 to SP-2.
S&P also warned that its A-plus rating on $46.6 billion of California general obligation bonds, which are long-term debt, might be lowered.
With the state already tied with Louisiana for the lowest credit rating of all the states, a downgrade would leave California alone at the bottom. (Most states are rated AA or AAA.)
S&P said its actions "reflect our opinion of recent state cash projections that expect significant deterioration in California's cash position."
The state's budget deficit now is expected to reach $14.8 billion in the current fiscal year if the Legislature fails to cut spending, raise revenue or both. And the budget gap could balloon to a stunning $42 billion by July 2010, The Times reported Thursday.
S&P, however, is focused on the near horizon.
"Should the state not enact timely midyear budget gap closing measures by February 2009, or should the state's cash position weaken significantly compared with recently revised state cash flow projections," the rating firm warns, the ratings on California's long-term debt could be lowered, S&P said.
That could drive more investors away from California bonds, forcing the state to pay higher interest rates to borrow. Municipal bond yields in California and elsewhere have been surging in recent weeks as state budget troubles have deepened.
(Excerpt) Read more at latimes.com ...
I voted for McClintock.
Slightly????.... must mean that S & P’s on the take... but we already know that.
Maybe a Skull and Crossbones rating should be next.
Umm, possibly the state of CA can only be reduced slightly, because the rating is already almost zero.....
If it had been Alaska’s rating that had been lowered by the same amount, “slightly” wouldn’t have been the word they’d have used.
i would sell those bonds short
they will not be paid on time
no way
there is no political solution, so the only possible solution will be legal (ie bankrupcy)
Is that like slightly pregnant?
You're not the only one!!! I voted for him again to be my congressman, although I would far rather had him as CA's Governor instead of that danged fool GANG-GREEN celebrity prig that's burying us and our kids in a sea of debt now!!!
They should file criminal fraud charges against any rating agency that rates any bond in California above junk!
That includes all municiple, school, and county bonds!
Did you see where J.P. Morgan reccommended taking out credit default swaps against California? Essentially telling their clients to bet on the future bankruptcy of the golden state!
How's the guv gonna borrow his way out of this mess this time? Who will lend? Who will buy bonds from a State that is heading over the cliff? Is speaker Bass gonna fix this? Hell, they are too busy over regulating what left of their businesses to even notice that the end is near!!!
When the guv said cut up the credit cards, I'll betcha he had no idea that Wall Street would do it for him.
Could the green light given to the Air Resources Board and it's recently advertised hit on diesel engines have been the 8"X10"X12" that broke the camel's back?
Nominated as the most blatantly biased headline of December 2008.
It's almost too bad.
Highest taxes in the nation and the lowest credit rating... Gosh, one might think those two factors were somehow related!
Naaah /s
And I’ve never seen any of the groupies apologize for their attacks on those who predicted just what Ahnold wound up doing.
It will be only after it kicks in. From what i understand, it is to be phased in (ie those with more then X trucks go first, under X trucks per company are exempt for a few years.) Although I'm not positive that that language is what actually passed.
I do know that our logging manager said it would eliminate almost all of the small logging truck outfits that we use. What a mess.
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