Wednesday, January 06, 2010

Orange County Treasurer Chriss Street Predicts California Bond Default By Summer

While my wife took a nap, I tuned in to Book TV this weekend to watch Steven Greenhunt discuss his public employee union exposé "Plunder!", and I caught an interesting exchange between Greenhunt and Orange County Treasurer Chriss Street. Book TV won't let me embed the video, but the exchange takes place at the 39 minute mark:

Greenhunt: Chriss, you'd probably be best to address what could be done. I mean, you helped predict the bankruptcy in Orange County in 1994. You saw a fiscal calamity coming, and you see one happening now. What do you think?

Street: Well, I think that California literally has to miss payroll. I guess the low point this year for cash flow is in February, it's $11 billion. I think they can finance that, but they'll be junk bonds by the Summer. They need $23 billion of cash and I think quite frankly they'll default.
I doubt California will default. We'll see a big federal bailout instead. Food for thought anyway.

1 comment :

patient renter said...

I'll go in between, a default followed by a bailout. With so many other states in similar trouble though, I imagine this is a road that the Feds will be very reluctant to go down.