California debt cut below 'A' grade as budget fight goes on

LA Times ^ | 7/6/09

[NormsRevenge]

California's bond debt has a rating that starts with a "B" for the first time since 2004, after Fitch Ratings today cut the state to "BBB" from "A-minus," citing Sacramento's budget gridlock.

The new rating still is "investment-grade" -- but not by much. After "BBB" is "BBB-minus," and then the junk rating of "BB."

California has never had a junk rating on its debt, but it's tempting fate now. Fitch said it is keeping the state on "rating watch negative," meaning another downgrade is possible.

Fitch, a rival of the better known Standard & Poor's and Moody's Investors Service rating firms, is the first of the three to make a move since the state last week began issuing IOUs to cover some of its expenses. S&P and Moody's also have warned that they may cut their ratings ("A" and "A2," respectively). Fitch's decision could give them a nudge.

"The downgrade to 'BBB' is based on the state's continued inability to achieve timely agreement on budgetary and cash flow solutions to its severe fiscal crisis," Fitch said, obviously not telling Californians anything they don't already know.

Still, Fitch said that, by maintaining an investment-grade rating for now, it was indicating that "expectations of default risk remain low." It acknowledged that, under the state Constitution, bond investors have a priority claim on tax revenue, after education funding.

[Da Coyote]

Think “Limbo Rock”. How low can you go? There is no lower limit when progressives are in charge.

[Frantzie]

The credit rating services are SO corrupt especially S&P which is owned by McGraw Hill (MH). MH sells school textbooks so they are leftists as is crappy Business Week.

These wh*res gave subprime mortgage “backed” secs AAA ratings - when they should have realized they were dog s**t.

CA’s debt is probably C- or lower.

[Amerigomag]

under the state Constitution, bond investors have a priority claim on tax revenue, after education funding.

Remember when?

The Austrian backs Prop 76 which would have placed his bond holder buds in NY ahead of educational funding.

[dragnet2]

Hell, they were giving mortgages to illegal aliens...lol.

http://www.youtube.com/watch?v=eW9viaJatpo

Ya had Bush, the President of the United States saying even if people were unqualified, it should not stop them for owning a home as good as anyone else.

[Amerigomag]

Good clip. Takes the edge off the Republican accusation that the housing queen was the root cause of the current meltdown.

[ProtectOurFreedom]

...citing Sacramento's budget gridlock

That's the best reason they can come up with for lowering the debt rating -- just "budget gridlock"???

What about insane and out of control spending levels combined with business-hostile policies plus AB32 guaranteed to send energy prices to the stratosphere? Could there possibly be other reasons for the poor debt rating than just "gridlock."

[Seadog Bytes]

Lead, Follow or Get Out of the Way!!!

At a time when Californians are reeling, and faced with EVEN HIGHER costs of state borrowing due to ongoing legislative failures to act in a timely fashion, at a time when the state is almost out of cash to pay it's bills, soon to start issuing 'I.O.U.'s instead, and when the State Legislature has once again failed to meet its responsibility to pass the annual budget on time, the supposed 'leader' in the State Assembly has decided to go off and pout, instead of showing any leadership qualities whatsoever.  

 

How can we ever HOPE to straighten out this state's problems, with the likes of Karen Bass doing absolutely nothing... but getting in the way??? 

 

http://www.seadogbytes.com/sbimages/BassCAproblem.jpg

 

 

[NormsRevenge]

Let the state go to pot.. bass-ackawards Bass and the dems just don’t get it,, and never will.

We’re all captives to a self-fulfilling nightmare unfolding before our very eyes.

yes, elections do matter,, here all we have got is incompetent leadership voted in by incompetent voters.

poetic justice.

[SierraWasp]

Gang-Ping!!! I’m doing less and less of these as conservatism turns more and more to... “Every Man/Woman For Himself” and the “movement” loses momentum due to “rugged individualism!!!”

[hedgetrimmer]

More cities are considering bankruptcy. Now Pacific Grove wants to declare bankruptcy citing personnel expenses including pensions and benefits have done them in.

Cities like these have almost completely stopped services like roads, fire and police, to pay the city workers clerks, and social services people, and gold plated retirement pensions (who but a government worker can retire at full salary with full health benefits?).

I’m all for that rugged individualism. If we spread it to everyone else we may have half a chance to get our state back on track.

Give us well paved roads we can travel for work and business, without the ‘smart growth’ ‘traffic calming’ barricades to free movement. Give us abundant water and power, stop creating scarcity in the name of the corrupt environmental movement. Government workers, government unions, and the corruption they create must be stopped. When they step out of the way we will ‘recover’ the state.

[SierraWasp]

Sounds like a plan to me!!!

[Seadog Bytes]

RE: "poetic justice."

...Yeah, maybe... IF they didn't always want to drag us through the mud WITH them.

[listenhillary]

These wh*res gave subprime mortgage “backed” secs AAA ratings - when they should have realized they were dog s**t.

But they were backed by the bottomless pockets of the US taxpayer. What could go wrong? ;)

[Seadog Bytes]

[hedgetrimmer]

Hold my b’mup, woncha?

[Seadog Bytes]

:)