Sadly, it is that they are all in the top ten list of the most likely bond defaults in the market at present. The people at Credit Market Analysts have compiled the list (below) and the CPD (Cumulative Probability of Default) for the State of California currently places them in the top ten.
This is the first time that the State of California has featured in the list, and it could present some fairly unhappy news for the state which is in the top ten economies in the world. The state is responsible for 13% of the USA’s GDP and historically their Gross State Product was over $1.8 trillion.
A default by California isn’t the same thing as New York’s default in 1975 because that wasn’t New York State it was New York City and the default never materialised, rather they came about as close as you can get to a …