http://www.zerohedge.com/news/california-run-out-cash-one-month-controller-warns "California will run out of cash by early March if the state does not take swift action to find $3.3 billion through payment delays and borrowing, according to a letter state Controller John Chiang sent to state lawmakers today. The announcement is surprising since lawmakers previously believed the state had enough cash to last through the fiscal year that ends in June."
D'oh.
And yet, CA muni CEFs generally around 52 wk highs.
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https://www.google.com/#sclient=psy-ab&hl=en&site=&source=hp&q=Washington+State+Easily+Sells+Muni+Debt,+Despite+Warnings+&pbx=1&oq=Washington+State+Easily+Sells+Muni+Debt,+Despite+Warnings+&aq=f&aqi=&aql=&gs_sm=e&gs_upl=1109l1109l0l1877l1l1l0l0l0l0l180l180l0.1l1l0&bav=on.2,or.r_gc.r_pw.,cf.osb&fp=fd7383ffd6cf4dd5&biw=1366&bih=537
we surely don't know what are the writings behind closed doors. Seems many states are treading in thin ice [MI, CA, NV, FLA, Ala, NY, Washington/Virginia etc...]
MI now has a surplus and balanced budget. 'Course the downside is that monies were taken away from the schools, those who have little money now will find their taxes restructed and those in particular age groups will find their pensions taxed at a rate that varies (age based taxation...how's that for unique?) from others who receive a pension. This last one even stood the test in MI Surpeme Court.
The downside being is that there will be less money in the pockets of the citizen; which will affect their spending habits at the local businesses. A real plan, in deed.
I'll email Gov. Snyder of MI on Wednesday. His mantra is "shared sacrifice". I'm sure he would like a piece of the CA action upon which to test his economic theories.
http://www.bloomberg.com/news/2012-02-01/california-will-borrow-up-to-1-billion-to-stave-off-impending-cash-crisis.html
I think Chifornia would open a 1000 Remnimbi. I'd buy it before FB IPO