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Posted on 01/22/2009 9:23:11 AM PST by NormsRevenge
California, tied with Louisiana for the lowest credit rating among the states, now is in more danger of claiming rock-bottom all for itself.
Moody’s Investors Service today warned that it might downgrade California’s general obligation bond rating, currently A1, because of the state’s "significant budgetary shortfall, impending liquidity crisis, and lack of legislative solutions."
Louisiana also is rated A1. All other states are rated higher on Moody’s scale, typically AA or AAA.
Moody’s shift follows a similar warning on California’s debt rating by its rival, Standard & Poor’s, on Dec. 11. S&P also has California tied with Louisiana for last place on the ratings scale.
California_state_flag Moody’s indicated it’s running out of patience with the state as Gov. Arnold Schwarzenegger and the Legislature fail to agree on a plan to plug California’s massive projected budget shortfalls -- $15 billion in 2009 and $25 billion in 2010.
"Although the legislative and executive branch continue to debate fiscal and cash measures, and the legislature is required to come up with solutions by Feb. 3, we do not yet know whether solutions will actually be passed, or whether they will be workable, reasonable, and of a sufficient magnitude to achieve a degree of credit stabilization consistent with the current rating level," Moody’s said in a statement.
In theory, a low credit rating means a state should pay more to borrow than states with higher ratings. But because of its size and the large investor base for its tax-free bonds, California hasn’t always been penalized by the market despite its low credit standing.
Even so, some money managers say they’ve been avoiding California’s $57 billion in outstanding general obligation bonds in part on the assumption that the state’s rating would fall further into the basement.
(Excerpt) Read more at latimesblogs.latimes.com ...
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Just think, the Socialist Utopia known as California may soon enter uncharted territory: A negative credit rating.....
Still, I am pretty sure that California is now full of overeducated liberals and welfare class blaming it all on Bush. Alpha and gamma class of California commiserating.
CA isn’t going to make any tough decisions now. They’ll limp along anticipating a taxpayer bailout, which they will no doubt receive. Bend over.
The Ratings have no credibility, neither does the state of California....
But I’m sure they’ll flock to buy the new high speed rail bonds the the Bay Area numbskulls voted for, right? RIGHT???
The state is broke. Their credit rating should be junk. They will ask for a bailout but the country will go broke if they think we can just keep bailing things out.
I think CA probably cannot sell any bonds now because the credit markets. The scam of selling more bonds and accounting gimmicks is running out.
Radical hardcore leftwing public employee unions run the State of California and can only be stopped by a Chapter 9 bankruptcy filing. The over/under filing date is May 1st.
The scam of selling more bonds and accounting gimmicks is running out.
Arnuld talks about Reagan all the time but he has no clue.
The One is talking about a program where he wants to bring in refugees for American families to sponsor to get him 10 million more votes to be FDR/Mugabe for life. The refugees get green cards almost immediately plus endless benefits.
Why would anyone loan money to a state (or other organization) that is talking about issuing IOUs against their own obligations?
How the mighty have fallen - down with the lowest of the low - corrupt broken Louisiana... Never thought I'd see it.
CA Republicans willing to put taxes on the table-per Sacto BEE
Just more proof that socialism or the Progressive Way, does not work for any extended period of time ever!
It always fails!
Gosh, I remember something called the Gann spending limits, don't you? Whatever happened to those? Surely the GOP wouldn't give up on a law that had provided effective fiscal restraint for over 20 years, would they?
Arnold can win.
Wilson can win.
Bush can win.
McCain can win...
Look who's losing.
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