DEFAULT IS THE ATOMIC LAND MINE IN CALIFORNIA

ONE of the reasons long term interest rates are so high. If a country, Argentina, can stiff bondholders, why not a state? The Democratic Party is so controlled by the ever demanding unions that default on the bond debt is now a possibility. These people are funding the "deficit" by borrowing even more money. Put in plain road kill language:

YOU run up your credit card debt. And run it up. And run it up some more. You find that you can't earn enough money to pay it off. In your sick mind you decide to run up as much debt as you can and then file for bankruptcy.

This is what the very rich Orange County in California did a few years ago when they decided they didn't "want" to pay their bond debt. It's what the state of Washington did a while back in the "WHOOSH" scam. Make no mistake, the people buying bond debt are worried. These state of California people are out and out crooks. And the labor unions will never be held accountable without the courts stepping in to demand a repayment plan that includes reduction of wages and benefits.

Bond traders, a most sophisticated lot, are well aware of this possibility.