California is a Greater Risk than Greece, Warns JP Morgan Chief

Discussion in 'Economy' started by Neubarth, Feb 27, 2010.

  1. Neubarth
    Offline

    Neubarth At the Ballpark July 30th

    Joined:
    Nov 8, 2008
    Messages:
    3,751
    Thanks Received:
    199
    Trophy Points:
    48
    Location:
    South Pacific
    Ratings:
    +199
    California is a Greater Risk than Greece, Warns JP Morgan Chief

    Jamie Dimon, chairman of JP Morgan Chase, has warned American investors should be more worried about the risk of default of the state of California than of Greece's current debt woes.


    Mr Dimon told investors at the Wall Street bank's annual meeting that "there could be contagion" if a state the size of California, the biggest of the United States, had problems making debt repayments. "Greece itself would not be an issue for this company, nor would any other country," said Mr Dimon. "We don't really foresee the European Union coming apart." The senior banker said thatJP Morgan Chase and other US rivals are largely immune from the European debt crisis, as the risks have largely been hedged.
    California however poses more of a risk, given the state's $20bn (£13.1bn) budget deficit, which Governor Arnold Schwarzenegger is desperately trying to reduce.

    California is a greater risk than Greece, warns JP Morgan chief - Telegraph
     
  2. uscitizen
    Offline

    uscitizen Senior Member

    Joined:
    May 6, 2007
    Messages:
    45,941
    Thanks Received:
    4,791
    Trophy Points:
    48
    Location:
    My Shack
    Ratings:
    +4,807
    Is it too late to give it back to Mexico?

    You know the strange thing is we whine about it and if Mexico got CA back it would boost their economy greatly.
     
  3. Neubarth
    Offline

    Neubarth At the Ballpark July 30th

    Joined:
    Nov 8, 2008
    Messages:
    3,751
    Thanks Received:
    199
    Trophy Points:
    48
    Location:
    South Pacific
    Ratings:
    +199
    We are experiencing a summer like rain storm here in Sandy Ego this morning. I have the windows open and am enjoying the smell of the rain washed air. It is just beautiful and so peaceful. Meanwhile, the reality of what has happened in California over the past twenty years is finally catching up with us. Liberal legislature members during the past two decades (both parties were at fault) passed no end of spend, spend, spend, spend legislation. Social welfare programs were fully funded and everything was wonderful until the Depression started two years ago. Now, all of those socialist programs are disappearing because the funding is simply not there anymore now that 25% of the population is out of work. They are not paying taxes to the state of California and we can not afford the ridiculous social programs now that the tax revenue is not there. Any attempt to raise taxes will only result in more and more businesses fleeing the state to a less expensive environment. School teachers are being fired left and right. The roads are falling into decay and nobody is coming around to repair them. The libraries are being shuttered. State parks are being closed and entrances locked up because there is no money to keep rangers there for public safety. It is all going to hell, and still they can not balance the budget.
     
  4. uscitizen
    Offline

    uscitizen Senior Member

    Joined:
    May 6, 2007
    Messages:
    45,941
    Thanks Received:
    4,791
    Trophy Points:
    48
    Location:
    My Shack
    Ratings:
    +4,807
    merely an adjustment period of getting used to living with less.
    It will take several years though.
     
  5. editec
    Offline

    editec Mr. Forgot-it-All

    Joined:
    Jun 5, 2008
    Messages:
    41,427
    Thanks Received:
    5,598
    Trophy Points:
    48
    Location:
    Maine
    Ratings:
    +5,617
    California seems to have enjoyed the benefits of the economic bubble most, so it's really not surprising that when the bubble burst they stood the greater chance of getting hosed.

    But the fear that: "As California goes, so goes the nation"?

    That resonates as true with me.

    Those of us living in the rest of the nation enjoying shadenfreude about California's woes are being rather foolish, I think.
     
  6. Wry Catcher
    Offline

    Wry Catcher Platinum Member

    Joined:
    Aug 3, 2009
    Messages:
    31,746
    Thanks Received:
    4,242
    Trophy Points:
    1,160
    Location:
    San Francisco Bay Area
    Ratings:
    +8,156
    Fear mongering again. Hoping for a self fullfilling prophecy? I have no idea where you live, but in NorCal are roads are as good as they were during the 1990's, construction continues with a huge bio-tech center south of AT&T park, highways are being expanded and local roads are being repaired and widened as a result of the Federal Stimulus Program.
    Of course schools, special districts and local/county governments are in trouble. Trouble caused by a tyranny of the minority party and a series of Republican Governors lacking the balls to do the right thing.
     
    Last edited: Feb 27, 2010
  7. georgephillip
    Offline

    georgephillip Gold Member Supporting Member

    Joined:
    Dec 27, 2009
    Messages:
    26,428
    Thanks Received:
    1,265
    Trophy Points:
    215
    Location:
    Los Angeles, California
    Ratings:
    +2,039
    "Pouring money into the private banking system has only fixed the economy for the bankers and the wealthy; it has not done much to address either the fundamental problem of unemployment or the debt trap so many Americans find themselves in."

    North Dakota, not Mexico, offers California its best shot at financial salvation. Since 2000 the state's GNP has grown by 56%, personal income has grown 43% and wages have increased by 34%

    How is this possible in a state of 700,000 people located in cold and isolated farming communities?

    Possibly because North Dakota is the only state in the union to own its own bank.

    Unlike private banks limited by bank capital requirements and their for-profit business models, states own huge amounts of capital, and they can think farther ahead than their quarterly profit statements which allows them to take long-term risk.

    "Their asset bases are not marred by over-sized salaries and bonuses; they have no shareholders expecting a sizable cut, and they have not marred their books with bad derivaives bets, unmarketable CDOs and mark to market accounting problems."

    The State Bank of California...Change and Hope you can bank on.

    See: Ellen Brown, October 31, 2009 //webofdebt.com/articles/cut__wallstreet.php
     
  8. Neubarth
    Offline

    Neubarth At the Ballpark July 30th

    Joined:
    Nov 8, 2008
    Messages:
    3,751
    Thanks Received:
    199
    Trophy Points:
    48
    Location:
    South Pacific
    Ratings:
    +199
    Are roads?

    ARE?

    Our roads are in disrepair. The state government is faltering. Everything is collapsing.
     
    Last edited: Feb 27, 2010
  9. Neubarth
    Offline

    Neubarth At the Ballpark July 30th

    Joined:
    Nov 8, 2008
    Messages:
    3,751
    Thanks Received:
    199
    Trophy Points:
    48
    Location:
    South Pacific
    Ratings:
    +199
    A state run by Germanic and Scandinavian immigrants with conservative cultural values? And somehow you want to attack others who do not share those values? This is not a Germanic and Scandinavian country, especially California where Spanish is recognized as the second official language of the state. Are you a racist? Or are you a culturalist?
     
  10. Toro
    Offline

    Toro Diamond Member

    Joined:
    Sep 29, 2005
    Messages:
    50,732
    Thanks Received:
    11,051
    Trophy Points:
    2,030
    Location:
    The Big Bend via Riderville
    Ratings:
    +25,066
    Deficits to GDP
    California 2%
    Greece 13%

    Debt
    California 7%
    Greece 100%

    Yes, if California were at risk of default, Americans should be more worried than they are of Greece. Maybe one day California will default, but it is unlikely anytime soon.
     

Share This Page