California could explain that if the bond holders don't pressure the Republicans to help out, they might take a haircut.
Also, the bond market forgets about such things after a while. On Mon, Jun 29, 2009 at 08:31:02PM -0700, David B. Shemano wrote: > Michael -- what are you proposing? That California default? If California > defaulted, what would happen the next time the State went to the bond market? > > > David Shemano > > > > --- Original Message--- > To: [email protected] > From: Michael Perelman <[email protected]> > Sent: 6/29/2009 6:49PM > Subject: [Pen-l] Bondage in the Bond Age: A California View > > >> In the midst of the Bush-Obama balance sheet bailout, one group stands out > >> in its > >> importance -- bondholders. I know -- a couple of times some bondholders > >> have had to > >> take a haircut to protect other investors. > >> > >> Here in California, with our $24 billion deficit, it seems like nothing -- > >> absolutely nothing -- and threaten bondholders. Yes, some bondholders are > >> pension > >> funds or charitable organizations. A minority of Republicans along with a > >> movie star > >> governor have adamantly refused to raise taxes, especially those taxes > >> that might > >> affect the class of people who are bondholders. > >> > >> Education and healthcare are being slashed beyond recognition. My God, even > >> prisons > >> might be cut a bit. The state is also raiding the treasuries of cities and > >> counties > >> for funds. Their response will be the same as the state's: cut back on > >> anything that > >> might help the poor and if necessary extend the cuts to the middle class. > >> All this > >> so that California can payback its bondholders. No haircut here. They must > >> be paid > >> back in full. > >> > >> And the children, deprived of adequate education and health care, of > >> course, they > >> must make a modest sacrifice to protect the interests of bondholders. > >> > >> > >> > >> > >> -- > >> Michael Perelman > >> Economics Department > >> California State University > >> Chico, CA 95929 > >> > >> Tel. 530-898-5321 > >> E-Mail michael at ecst.csuchico.edu > >> michaelperelman.wordpress.com > >> _______________________________________________ > >> pen-l mailing list > >> [email protected] > >> https://lists.csuchico.edu/mailman/listinfo/pen-l > >> > > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu michaelperelman.wordpress.com _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
