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This may be more amusing than instructive, but here goes.

This chart (click to enlarge) shows 5-year credit default swaps on bonds issued by the State of California and the government of Kazakhstan. As Bloomberg's Chart of the Day notes, California would be ranked as the world's eighth-largest economy, while Kazakhstan's economy is only one-sixteenth as large. Yet the market is saying that California's bonds are 50% more risky than those of Kazakhstan.

In case you're wondering, similar credit default swaps on Greek government bonds are trading at 364 bps (only slightly higher than California's 303). Iceland 524, Portugal 163, Spain 130 and Italy 128.

The governments of California and Greece are in the same pickle: government spending is out of control and must be reined in, starting with public sector salaries and benefits. The market is saying that's going to be very difficult to accomplish. I'd like to think it's fairly easy: just say "no."

Source: California: A Bigger Credit Risk Than Kazakhstan