Market opens lower: Could be an ugly day, what with new concerns about the global recession. Dow is off more than 150 points.
White House backs off: The Department of Health and Human Services said the state is still eligible to receive another $8 billion in stimulus money for its Medicaid program. Earlier, the Obama administration had threatened to withhold billions of dollars because pay for home healthcare workers was being cut. (LAT)
We'll always have munis: Investors are sticking with the state's bonds, at least based on the share prices of major mutual funds that own debt of the state and its cities, counties and other municipalities. From the LAT:
The annualized yield on 10-year California state general obligation bonds, for example, has fallen to 4.40% currently from a high of 5.34% last October, according to Bloomberg News data. But it's still far above the 3.2% yield on 10-year Treasury notes. Investors also may be comforting themselves with historical data on the muni market that show very low default risk. "What the market is telling us is that long-term investors believe [California] is going to figure out how to pay its debts," said John Carbone, manager of the Vanguard California fund.
Bill Maher's take: He pens an oped in the LAT on the budget mess:
California used to be like the rest of the country, following the instructions in the Constitution and everything. But then we chucked that, and now our state is governed not by elected representatives but by special-interest people standing in front of the supermarket with clipboards asking, "Would you like to sign a petition to cut your taxes?" And then that becomes law. Proposition 14C: Two weeks paid leave for hangovers and universal teeth whitening, paid for by Central Valley cow gas. "Vote 'yes' on gain, 'no' on pain."
Court hours cut: Faced with a $90 million shortfall, most L.A. Superior Court operations will be closed on the third Wednesday of each month, starting July 15. With some exceptions, employees will be furloughed for that day. Still on the table is a statewide courts closure plan. (The Recorder)
Mexico's tumbling economy: The country's gross domestic product fell at an annualized rate of 21.5 percent in the first quarter, the worst performance since the 1995 peso crisis. (The U.S. had a mere 6.3 percent drop in the first-quarter GDP.) Earlier in the week came word of Japan's 15.2 contraction,, its worst performance since 1955. (WSJ)
TV viewing is way up: Actually, it's more like "screen viewing" (Internet, cell phone, etc.). As for TV, the average American watches approximately 153 hours every month at home (yowser!), a 1.2 percent increase from last year. (MediaMemo)
Nonprofits settle suit: Three OC charities will shut down after settling with the Federal Trade Commission over charges that they misled donors. Three groups and three insiders were fined a combined $19.1 million but the FTC suspended the fine because they're unable to pay. From the Register:
The three groups were founded nearly a decade ago by disbarred lawyer and convicted felon Joe Shambaugh, who is currently on the run from a 2006 federal indictment for charity fraud. Shambaugh was a former aide to Orange County telemarketing king Mitch Gold, who served eight years in federal prison for charity fraud. Since 2005, the FTC charged, the three groups have raised $19 million in donations. Total spent on charitable works: just over $1 million, or 5.4 percent of the total.