as goes california so goes the usa ..., page-11

They can't really borrow, as they don't have collateral left (they already have borrowed against it), even the muni bonds on which they rely to raise $$$ are about to be re-rated, which will have a two-fold effect, firstly nobody will touch them with a barge pole, and secondly, those funds that do hold them atm will be forced to sell them as their charters don't allow them to hold the lesser rated bonds.

ergo higher interest rates will have to be offered by the state to make the munis more attractive to 2nd and third tier investors, but they can't meet the higher interest repayments because they have no money.

And the Democrats in Washington might be sending the GOP a message...

I agree that it is a ludicrous situation that they bail their mates out on Wall
Street, but are happy to see all of the salaried employees, contractors etc of the State of California (and a few other states) out on the street.

Only in America...