Tuesday, July 7, 2009

California Credit Rating Cut Close to Junk

California’s debt rating was slashed by Fitch Ratings to triple B – two notches above junk – after the state started to issue IOUs for certain payments.

Further downgrades are possible, Fitch said, if legislators and Arnold Schwarzenegger, governor, do not end a stalemate over how to close a $26bn budget gap.

I don't see California's major banks accepting the IOU's for very long, which they are doing at the prsent time.

1 comment:

  1. Wenzel,

    Funny anecdote my friend up in Downtown LA shared with me yest... he was at the Brooks Brothers on Santa Monica Blvd (Beverly Hills) a few weeks ago and said the Guvernator was in there, haggling with the counter-person about some shirts, "Saow, waat is dee best deel you kahn geev mee?" was the quote.

    Funny, as private citizens these pols all know how to bargain, but put them in the capitol building...