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Washington and Wall Street seem to be treating California as if it were a sideshow in the financial circus of these turbulent times.
California is home to the largest manufacturing belt in the United States and to Silicon Valley, the nation’s largest high-tech center.
California is America’s most populous state with 38 million people. Its GDP of $1.8 trillion is the largest in the U.S. Its economy is bigger than those of Russia, Brazil, Canada, or India.
And it's collapsing.
Major California counties are ground zero in the continuing mortgage meltdown:
Los Angeles County with 5.32 percent of mortgages 90 days past due … Monterrey County, 8.02 percent … Imperial, 8.13 … San Bernadino, 8.66 … Madeira, 9.21 … San Joaquin, 9.53 … Riverside, 10.2 … Merced, 10.57 … and more!
California’s inventory of foreclosed homes is skyrocketing. Home prices are plunging. And the impact of surging unemployment is just beginning to show up in the data …
Worst Unemployment in 64 Years
1. If you wait for Moody’s or S&P to act, it could be too late. Even if you can’t get what you might consider a good price, sell all California paper now!
2. Seriously consider dumping all tax-exempt bonds. I know the income is better than equivalent Treasuries. But if California defaults, it could set off a chain reaction of bond price plunges and defaults throughout the municipal bond market.
3. Don’t underestimate the impact California’s depression is having — and will continue to have — on the rest of the U.S. economy. At $1.8 trillion, the state’s GDP is so large, any further deterioration could wipe out every so-called “green shoot” in the national economy seen to date.
4. Stay safe, with a big portion of your nest egg in cash, tucked away in short-term Treasury bills … and with a very modest portion in gold, as an insurance policy against a dollar decline.
Good luck and God bless!
Further proof entitlement programs do not work, and do not benefit anyone other than parasites.
Add in the irresponsibility of its elected officials, and it was only a matter of time.
I for one am happy to see the socialist republic of California collapse.
Originally posted by apacheman
reply to post by projectvxn
To all you who think California is some sort of socialist welfare state, what world do you live in?
For all your socialism blather, you sure seem happy to live off our dime: California gets about $ .75 back on each tax dollar we send to Washington. We're supporting your disrespectful butts, and getting pretty tired of it. I can't imagine how much we send to the New York banksters each year.
We've had Republican governors for quite awhile now, their fiscal policies have driven down the quality of education statewide, made a lot of peole homeless, and cost huge numbers of jobs. They've allowed corporate ripoffs left and right, just like everywhere else. If this is socialism, it sure looks a lot like conservative capitalism to me. We've been bled dry by successive frauds like Enron: my monthly electric bill hit $745 during the height of the crisis, after we cut usage by 35-40%. I've never recovered a dime of what was extorted then. Corporate America likes to charge us extra for everything: a sun tax for the privilege of living here. Gas were I live runs about $3.00 a gallon today, last year it hit $4.52 in some spots. We, the people of California, are pretty fiscally frugal in our own lives, we have to be: wages are low compared to the cost of living. If I'm living in a socialist paradise, nobody's told me about it, and I've never seen it.
My county supervisors just finished wasting several years and millions of taxpayers money unsuccessfully fighting state law about medical marijuana. Does that sound socialist to you? The strongest union in the state is not the teachers' union, nor a labor union, but rather the prison guards union. I guess that's socialist, too.
Someone suggested that what we need is our own state bank, so we can issue credit backed by our tax receipts, and quit paying interest to New York. I'm all for that.
Regardless, we're screwed now.
And guess what?
You're screwed, too.
Because we've been supporting the rest of the country, and we can't afford it anymore.
Originally posted by Kaytagg
I'll never understand why Republicans don't like California -- other than their progressive social views.
California is a much bigger economic entity than Florida. In fact, it's the 10th largest economy in the world.
How on earth does the 10th largest economy in the world go bankrupt? I guess not saving enough, spending too much? I don't really know -- but it's going to be very difficult for them to get enough credit to stay afloat, considering the amount they need relative to their size.