Russia is safer than California?
Apparently so, according to this paper. Moral of the story? The system of state and muni bonds needs a drastic revision, namely, investors should start demanding collateral for their bonds as a way to have some protection against deadbeat governors, deadbeat mayors, and deadbeat movie actors. http://www.bloomberg.com/apps/news?pid=20601109&sid=aypQny1ySDjU "The annual cost of protecting holdings in Turkey’s bonds fell by half to $200,000 per $10 million for five years, or 200 basis points, sinking below New York City swaps for two weeks starting July 22, Bloomberg data show. Indonesia debt insurance dropped below Michigan the next day. Brazil swaps just had their biggest four-month slide ever. For China, protection is near the cheapest in a year. Eleven years after Russia defaulted, investors want less to insure its debt than California’s."