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Dimon: Worry about California, not Greece
Friday, February 26, 2010
Barron's reports that JP Morgan chief Jamie Dimon is a lot less concerned about Greece and the euro than he is about California and its growing budget troubles. Like the Greeks, officials in the Golden State had to cancel a bond sale this week and the two are competing for the top spot as poster-child for government overspending.
In a related story, there seems to have been Greek-like unrest in Berkeley last night as a budget cut protest party turned violent. Campus property was reportedly damaged and then the 200-strong protest moved out onto city streets where trash cans were set on fire, windows were smashed, and the police were called.“Greece itself would not be an issue for this company, nor would any other country,” Dimon said, according to Dow Jones’s Matthias Rieker. “We don’t really foresee the European Union coming apart.”
However, given California’s size, “there could be contagion” if the state were to have problems servicing its debts, Dimon warned.
Ironically, this was just the pre-protest planning party, not the protest itself that is (or, at least, was) scheduled for next week. Two people were arrested, alcohol was apparently involved, and there was no word on how this might impact next week's demonstrations.
4 comments:
College students trashing the campus?
Berkeley. How deliciously appropriate.
Hmm.
Alcohol was involved?
Really?
And the taxpayers should pony up without question?
In Oakland, the City wants to sell the Kaiser Auditorium to Laney College for $10,000,000. in order to give Oakland public employees a raise. No doubt the hardworking union employees deserve it. Only one problem- the City took out a $40,000,000. mortgage a few years ago on the auditorium. When asked where that money went, the city official replied"Oh, we spent that years ago!"
Don't you miss California??
CA is a bigger problem than Greece, but only because taxpayers in the other 49 states will be asked to bail CA out. Again.
They created an unstable state by relying too heavily on the property tax, and then trying to gentrify the entire state to maximize tax revenues. They never stopped to consider that if their citizens couldn't afford excessively high taxes in the first place (Jarvis), they would never be able to afford taxes plus a huge mortgage.
Greece will be fixed by the EU. It is only 2% of EU economy. It will be taught a lesson by the EU, sweat up and fixed. End of story.
California is different. The Federal government, and no other states, can come and help CA. It must fix itself. But it has proven that this is impossible. If this goes on, it must declare some kind of default. At which time it can either secede, or get kicked out of the union.
Maybe Mexico can come in and reclaim it.
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