Seeking Alpha
, Iacono Research (151 clicks)
Newsletter provider, portfolio strategy, macro, gold
Profile| Send Message|
( followers)  

Prior to Moody's announcing that it might make a "multi-notch" downgrade to California's debt rating, a rating that now stands at an uncomfortable five "notches" above junk status (it was much more comfortable prior to word of a possible - and highly unusual - "multi"-notch adjustment downward), there was more intrigue in what has become something of a "permanent crisis" for the state's finances.

The San Francisco Chronicle reports that University of California faculty representatives sent a scathing letter to UC regents yesterday in which the board was accused of being, effectively, AWOL during the escalating budget crisis that is sure to have a huge impact on the giant 10-campus system which faces budget cuts of almost $1 billion this year.

"We urge that emergency and open meetings of the board be convened to explore the implications of the budget crisis for the future of the UC system," faculty leaders wrote. The regents last met in early-May and, apparently, didn't address the looming budget cuts.

Elsewhere at the Chronicle, writing for The Scavenger blog, SF Gate home page editor Aileen Yoo pens a masterful piece about how the state's elected officials are dithering.

Growing crisis and growing a pair
As California faces a $24 billion deficit and teeters on the edge of insolvency, Gov. Schwarzenegger and Senate President Pro Tem Darrell Steinberg are exchanging gag gifts full of budget symbolism.

Last week, after Schwarzenegger called the Senate budget plans "hallucinatory," Steinberg sent the guv a basket of garden-variety mushrooms and a note about the fungus' magical effects. Schwarzenegger returned the favor, giving Steinberg a metal sculpture of bull testicles with a note suggesting the Sacto Dem would have to grow a pair to make tough budget decisions, according to sources. There are conflicting reports on the size of the gift. Comparisons range from football (AP) to melon (LA Times). What kind of melon, the Times did not specify, but it's safe to say the sculpture was large enough.

Steinberg spokeswoman Alicia Trost said: "We've got more important things on our plate right now than to waste any more time on such trivial matters."

Indeed, the Legislature needs to focus on more pressing issues such as the font size on health workers' name tags (bill courtesy of Assemblymember Mary Hayashi, D-Hayward) and pomegranate juice. [CORRECTION: The name tag bill's author was not Assemblywoman Fiona Ma as reported by AP]

There's lots more in the piece by Ms. Yoo including lots of links for those inclined to learn more about the ongoing crisis which just appears to grow more hopeless every week, a debt downgrade perhaps taking things to a whole new level.

Source: California's Permanent Crisis