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Dimon: California Larger Risk Than Greece

February 28, 2010

Jamie Dimon, the chief of JP Morgan Chase has indicated that California poses a larger risk than Greece.

Mr Dimon told investors at the Wall Street bank’s annual meeting that “there could be contagion” if a state the size of California, the biggest of the United States, had problems making debt repayments.

Dimon isn’t the first to point this out. Last month, the head of the ECB also made similar comments. Many local and state economies around this union are in a world of hurt, and California is amongst the worst.

Various officials have indicated that they wouldn’t seek to get back into the IOU game, but it’s looking pretty likely that the state may have to once again start issuing them given the size of the deficit.

[via Telegraph]

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Comments
LC Chase March 1, 2010


With all the issues we are facing in California we are looking at IOUs for sure. A lower credit rating which will equal higher interest rate costs. Higher Unemployment which equals less tax base. More foreclosures and lower property values which again depletes the tax base. To top it all off our expenses are increasing. How long can it continue? It way not tumble this year but it's coming……it's coming.

joshua March 2, 2010


this is fairly obvious. im wondering why more people arent clamoring about this. i give it until june when the media realizes we cant pass a budget. again.

Mike Gormley March 2, 2010


There's been a serious erosion of our wealth in California over the last 3 years as property values have plummeted, rents rates are declining at an alarming rate in office, retail and industrial properties which will have a serious impact on the collection of property taxes. Since our politicians choose to squander the tax receipts from our more productive years on more entitlements and long term spending commitments, but didn't have the fortitude or courage to invest in the states infrastructure or rainy day fund that would help smooth the boom and bust cycles of our economy. Apparently the Greeks, like a lot of the folks involved in the mortgage mess here had fibbed on the application for EEC membership and didn't have any reserves either. We can't do much in the case of the Greeks, but we all still have a say or a vote in California.

I only have one question, was Mr. Dimon or his institution or industry not in need of a bailout recently? State's Bank's and and real estate investments companies all need to maintain a reserve or rainy day fund.

REI August 2, 2011


I hear this has only gotten worse in the past year, do you think there will be a shift soon?

Bob Urbanowski August 29, 2011


Interesting – with all the news about Greece recently, I wonder how California is faring? I shall be searching for news on this…

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