This just in, via CNBC, Fitch has downgraded California’s debt two notches, though it’s still barely above junk. As usual, the ratings agency is coming to a conclusion the market has reached some time ago.
State Treasurer Bill Lockyer is on TV, talking to Maria Bartiromo, saying there’s little risk of a default.
For now, California IOUs are still trading at parity to the dollar, but we’re on the lookout for any signs of slippage. When we see the first, big transactions going through at sub-$1, that’ll be big.
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