"Meantime, the other sovereign debtor whose situation evinces real concern is the State of California, which is the seventh- or eighth-largest economy in the world, depending upon whose statistics you cite. As such, it vastly overshadows in importance other dicey sovereign debtors, such as the PIIGs. And like members of the EMU, California can't devalue to reduce its real debt burden.
According to CMA, a unit of the CME Group (CME) that provide data on credit derivatives, California is ranked as No. 10 of the Top 10 default candidates among sovereign debtors, right behind Greece. No. 1 and 2 are Argentina and Venezuela, whose bonds should be rated M for mierda. (That's Spanish I didn't learn in school but on the streets of Washington Heights. If you took French, the comparable term is merde.)
S&P cut its ratings on California general-obligation debt to single-A-minus earlier this week reflecting the Golden State's severe budget deficit projected at $19.9 billion. Moody's already rates California GOs a notch lower, at Baa1, while Fitch Ratings has the bonds two grades lower, at triple-B."
When are our enlightened leaders going to get the junk out of the trunk by getting this nation’s finances in order? Anyone? Anyone? Bueller? Bueller?