Here's a portion of the post at Zero Hedge and something one of the commenters said:
Do you see what happens Larry when you sell CDS on California? You get a Greek-style scapegoating campaign. Cali's State Treasurer Bill Lockyer, exasperated at his impotence to sell $2 billion in GO bonds, has resorted to the last option: sending angry missives and trying to make a media circus out of it. It is now all Goldman's fault that California is bankrupt, just because it dares to make a market in Cali CDS. Ring a bell? It worked miracles for Greece, whose bonds are now tumbling a day after everyone said Greek issues were resolved. Also, we can't wait to uncover, just like in the Greek case, that the biggest buyer of Cali CDS is PIMCO, CalPERS, TCW, Western, Oaktree, or some other California-based fund. Now that would be even funnier than Cali considered a more worthless "asset" than Kazakhstan. At least their potassium deposits are best in region.
From Bill Lockyer's letter, attached below:
Dear Mr. Blankfein:
I write to request information about your firm's market activities related to credit default swaps on municipal bonds in general, and State of California general obligation (GO) bonds specifically.
Here's the comment I mentioned-
on Tue, 03/30/2010 - 12:00
"Hungry speclator demand" for such a wise and time-tested innovative financial product. LOL Yes sireee, something that never existed ten or fifteen years ago, but now we must certainly provide the product that satiates the demand, no matter how ill-advised or destructive to society as a whole. Heck, there's profit to be made by way of fees and such, and you don't even have to get all icky and sweaty like most work. Yep, keep it up guys. Y'all are on the cutting edge. Something to really be proud of and tell your grandkids about. Welcome to the great casino at the heart of the church of greed. Never consider the CEO who makes 600 times his workers pay, but sock it to the poor and working classes that struggle and die becasue of austerity measures. After all, the bond markets demand it."
By the way, California, you can get out of your mess by starting a state-run bank like North Dakota's.