California Credit Upgrade

Discussion in 'Current Events' started by MtnBiker, May 21, 2004.

  1. MtnBiker
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    MtnBiker Senior Member

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    SAN FRANCISCO (Reuters) - A leading Wall Street ratings agency on Friday raised California's credit rating, citing an improving economy, the first such upgrade in four years and a move that promised to bring down the state's borrowing costs on $44 billion in debt.



    Analysts saw the unexpected credit upgrade by Moody's Investors Service as an endorsement of the steps Gov. Arnold Schwarzenegger (news - web sites) has taken to bring California back from the brink of a fiscal crisis that drove its credit ratings near junk levels and had threatened to effectively shut the state out of the bond market for new borrowing.


    Citing an "established trend of recovery," Moody's raised California's rating to A3 from Baa1, reversing a downgrade it made in December out of concern over continued political deadlock and a move by Schwarzenegger to cut car license fees.


    Moody's rivals Standard & Poor's and Fitch Ratings said they want to see the budget that California lawmakers pass for the fiscal year starting in July before weighing ratings changes of their own.


    Schwarzenegger, who has proposed a budget plan that would close a $14 billion budget gap without raising taxes, applauded Moody's: "Their financial analysts have had a chance to carefully review our revised budget and our economic outlook, and they've concluded that it warrants an improvement in California's standing in the nation's financial markets."


    Moody's upgrade affects about $35 billion of outstanding general obligation bonds and nearly $9 billion of lease revenue bonds and enhanced tobacco bonds backed by the state's general fund. The upgrade was Moody's first since September 2000 for California's general obligation debt.


    Employment in California's private sector and personal income in the state have resumed a "moderate pace of growth," and tax collections signal an economic recovery, Moody's said.


    California's credit rating may be in line for additional upgrades, said Evan Rourke, a municipal strategist at Popular Securities in New York. "I would expect that barring some kind of disaster or extraordinary event, you're likely to see further improvement. It's a reflection of the improved economy and credit conditions," Rourke said.
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  2. freeandfun1
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    freeandfun1 VIP Member

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    Who cares?
     
  3. 5stringJeff
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    5stringJeff Senior Member

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    Actually, that is a good piece of news for Schwarzenegger. If his policies result in a better credit rating, they have less interest to pay, plus he can go back to the Democrats and say, 'Look, my policies are working, Wall St. agrees, now here's the way I want to continue these policies.'
     
  4. freeandfun1
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    freeandfun1 VIP Member

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    I know.... I was just being facetious. . . . This is good news for the GOP in California (and needed good news). :D
     
  5. fuzzykitten99
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    fuzzykitten99 Senior Member

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    I wish we would have had Ah-Nold instead of Jesse The Dummy. Not that Jesse really did anything to begin with, other than several publicity stunts.
     
  6. DKSuddeth
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    DKSuddeth Senior Member

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    It's nothing but the vast right wing conspiracy :D
     
  7. dilloduck
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    dilloduck Diamond Member

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    I guess this decision didn't help to slow down the nut cases though. The State House has passed a bill making it illegal to sing,smoke and drink anything while you are driving. Earthquake anyone?
     
  8. fuzzykitten99
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    fuzzykitten99 Senior Member

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    i can see MAYBE smoking, because of the people who think that the curb is an ashtray, or those that flick still lit butts, then they fly up and land in other people's cars. There was a story on the news recently of a woman's 5 yr old getting 2nd degree burns from a cigarette that another driver flipped out the window, but landed in the other woman's car, in the back seat. Or the lit butts start grass fires. Banning everything else is stupid. Singing? C'mon! :rolleyes:
     
  9. nycflasher
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    nycflasher Active Member

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    Is that a joke?
     
  10. nycflasher
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    nycflasher Active Member

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    Yeah, that is definitely good news for Arnold. I still can't believe he got elected, but what would be even more surprising is if HE were responsible for seriously helping Cally's troubled economy.

    Not that I don't like him, I just don't have a whole lot of faith in this actor/weight-lifter's understanding of government operations.

    Power to ya Arnold, if you can save California before it slides into the Pacific.
     

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