Sunday, February 15, 2009
A Rated California
"Standard & Poors Corp. cut California's credit rating Monday to the lowest level among all 50 states because of a budget impase between Gov. Arnold Schwarzenegger and state lawmakers. ... The downgrade reflects the rating agency's view of 'the lack of political progress around the budget negotiations that we believe is serving to exacerbate the state's current and projected cash position,' said Gabriel Petek, an S&P analyst, adding that 'the state's cash position is rapidly eroding.' Because of the stalemate, California's controller on Monday began delaying more than $3 billion in tax refunds, welfare checks and other payments to pregvent a cash shortfall. ... S&P downgraded California's $46 billion of general obligation bonds to single-A from single-A-plus, the rating agency's fifth-lowest of 10 investment grades", Stu Woo at the WSJ, 4 February 2009.
S&P is on the ball. It downgrades California's debt after California is unable to pay it's current bills. Who needs these guys? Further, these S&P fools think the problem is a "stalemate" as opposed to California's spending.