California is a greater risk than Greece, warns JP Morgan chief

[cory777]

Source: Telegraph

By James Quinn, US Business Editor in New York
Published: 8:20PM GMT 26 Feb 2010

Jamie Dimon, chairman of JP Morgan Chase, has warned American investors should be more worried about the risk of default of the state of California than of Greece's current debt woes.

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. "Greece itself would not be an issue for this company, nor would any other country," said Mr Dimon. "We don't really foresee the European Union coming apart." The senior banker said that JP Morgan Chase and other US rivals are largely immune from the European debt crisis, as the risks have largely been hedged.

California however poses more of a risk, given the state's $20bn (£13.1bn) budget deficit, which Governor Arnold Schwarzenegger is desperately trying to reduce.

Read more: http://www.telegraph.co.uk/finance/financetopics/financialcrisis/7326772/California-is-a-greater-risk-than-Greece-warns-JP-Morgan-chief.html

[JI7]

1. hahha

is he threatening ?

[tularetom]

2. Hey, CA is too big to fail

Well it worked for the banks.
:shrug:

[yava]

3. Thats black humor

but I am appreciative :)

[AllentownJake]

4. Nevada will be the bansters test case

They got away so far with their crimes in greece. The big money has always been stateside and this is on Barack because he has had plenty of warning to the chaos these financial terrorist will unleash. Good businessman my ass.

[haele]

5. So their greedy hands had nothing to do with it?

"Honestly, it's not our fault we whipped the horse pulling your cart to death...you must have put too much in the cart for that horse to pull."
To continue the allegory, the banks were the ones claiming to be the experts who advised the choice of road and were driving the cart at excessive speed towards the ditch.

Haele

[DCKit]

9. JP Morgan just sold the bonds, they're not responsible for the result.

Has anyone asked Goldman Sachs which of the other Euro countries have "hidden" their debt with the same CDS and other lousy investments that nearly took down the world financial markets? Greece isn't the only victim.

[cutlassmama]

10. What is the deal with GS? Where is all the money going to and why now?

[flyarm]

11. i saw a report this week that Italy is being looked into now..eom

[BR_Parkway]

6. So they must have bought the policy that says CA is going to fail, now

they'll talk about it in the 'market' to make it happen and pick up their cash on the way to the next victim? Seems like it's been working out for them pretty well so far.

[peace frog]

7. If CA fails

can FL and the other teetering states be far behind? There's another tsunami coming, and it ain't all in the Pacific.

[Joanne98]

8. When Arnold took office they were only 3 billion in debt!

[flyarm]

12. and all the people that we dems now are supposed to look up to were drooling all over themselves for

him!!

Like Tweety and Olberman and all the MSNBC crew..they couldn't french kiss him with their tongues hard or deep enough!..they debased themselves over him. It was disgusting.

[slackmaster]

21. The Governor doesn't write the budget or decide how money will be spent

The Legislature does that.

[hughee99]

24. Yes, but the Governor is a repuke

and the Legislature is Dem (more than 60% in both houses), so obviously, the repuke is solely responsible for this. The problem they will have when Der Governator finally gets the boot is finding someone outside of government to blame for this.

[slackmaster]

25. The partisans will continue pointing fingers at the other side

Which is why "Declined to State" is the fastest-growing voter registration category in California.

[hughee99]

26. I agree, the problems in CA are bigger than any one party. n/t

[JackRiddler]

13. JPM should not even exist any more. It is a criminal entity that should be seized and shut down.

This is a small part of the price of the 2008 and 2009 bailouts, which gave a lifeline to the predators who had wittingly caused the crash (in the process of enriching themselves). This allowed them to continue their relentless assault on and plunder of the very public sector that rescued them.

Politicians aren't allowed to say the obvious, that the biggest players in the "financial sector" all ran scams that failed and will fail again - inevitably - because that would be "talking down the markets." But the very same private institutions that survived as a result of public sector assistance get to "talk down" and bust out California, Greece, Iceland, Ireland, Latvia, Social Security and any other states, nations or public sector programs they target, with impunity.

This will continue as long as the criminal class is allowed to stay in power. "Too big to fail," my ass. These are the dinosaurs we feed so that they can keep feeding on all of us, on the whole world.

[2Design]

14. let it fail - the pensions of lawmakers and principals and superintendents are

outrageous - if it goes bankrupt then tough - they can start over with all the money those anti prop 8 people wasted on ads to force inequality

[scottsoperson]

15. they let lehman fail

how did that work out?

[scottsoperson]

16. perhaps arnie should think about raising taxes

especially on the rich folks.

[Renew Deal]

23. It only left the job half done

But that's another story.

[TomCADem]

17. California Represents What Republicans Want To Do To The Nation

Proposition 13, Republican governors for 23 out of the past 27 years, a two third majority requirement for all tax increases and for passing the budget, and term limits.

Yup, you have heard Republicans propose all these things on a National level. How is it working out for California?

[Juche]

19. Starve the beast

Krugman wrote about that. However the GOP doesn't want to cut programs either. The end result is financial collapse in the hopes that people cut entitlement programs as a last resort. aka the shock doctrine.

http://www.nytimes.com/2010/02/22/opinion/22krugman.html

[slackmaster]

22. In spite of all that, as a working middle-class California homeowner I am one of the most taxed

people in the USA.

[TomCADem]

27. Sorry, But You Need To Subsidize Prop 13 Relief For Disneyland...

Unlike people, corporations can live forever. Thus, a corporation like Disneyland does not need to pay taxes on the fair market value of its property. What was sold as tax relief for the elderly is a huge loophole for corporate America in California. So, sorry about those various taxes you pay, but you need to subsidize corporate landlords and property owners.

[Jax]

18. uh huh cory...n/t

[lunatica]

20. My paycheck is 5% smaller today

As UC takes 5% of my paycheck every month for the next year as furlough cuts. People in my salary range are the staff in administration. The only employees paid less are the groundskeepers, custodians and food servers. They get a 4% cut every month. The people with higher salaries get more taken out. Some as much as 10% and 12%. Good times.

[Rapier09]

28. Once New York and California started going belly up

It was time to start reviewing our priorities.

The problem with California isn't that it owes that much money but it can't really increase revenue all that much.

[defendandprotect]

29. And how much did Enron have to do with that .... ????

We bailed out capitalism with $8/$12 TRILLION, but we're not even ending

the tax cuts on the rich earlier to help the states!!!

[Quantess]

31. Exactly. (no text)

[KamaAina]

30. "desperately trying to reduce"?

You mean, by enacting an oil severance tax, like every other oil-producing jurisdiction in the world? Nuh-uh. Or by rolling back corporate tax breaks that he himself enacted in the midst of this fiscal crisis? No sirree.

Screw you, Daily Torygraph. :grr: