Monday, December 29, 2008

(Potential) Californian victims

When California runs out of cash by Feb. 09, the state will start issuing IOUs. It's a downward spiral and regardless if Cali eventually makes good on the debt or defaults, the IOU holders will be hurt.

Some high profile creditors mentioned (probably not limited to),

Office Depot,
JP Morgan,
and Ford and GM dealers, but of course these guys're screwed already from other circumstances.

Keep in mind that "unprecedented" does not equate to "impossible". When state employees start getting IOUs instead of cash, state revenue will lower further as people will have even less money to pay off bills, mortgages, and TAXES!

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