California Bonds Downgraded Again

 |  Includes: CMF, CXA
by: Matthew Rafat

S&P downgraded California's debt again:

California's debt is now the lowest rated in the entire United States. What does this mean for investors? If you don't think California is going to default, you may be able to get good prices on California bonds. As a California resident, however, I am disgusted--and I even predicted this bond downgrade here (on December 19, 2007):

California’s bond ratings have gone from AAA to single A and are approaching status that is slightly above junk.

I apparently live in a state where legislators can't agree that cutting spending is essential to achieving a balanced budget. My representatives must believe they don't have to exercise fiscal discipline. This stance is troubling when the recession guarantees that state tax receipts will be lower than previous years. Where's Mr. Smith when you need him?