Er, what about the budget?

Well, state lawmakers and the governor are still at an impasse over how to get out of the mess. Talks went nowhere over the weekend and yesterday morning. Friday is looming as the day when major banks will stop accepting those state IOUs. The central question continues to be when (or whether) the budget crisis will reach any sort of breaking point - that is, when Californians will look at the budget crisis as a crisis and not just another story competing for the front page. As reported earlier, Fitch cut its ratings on California bonds to BBB, two notches down from A-minus. That is still investment grade (a very big deal if the state is to keep getting institutional money), but it's only two steps above a junk rating. No word yet on what the two other services, Standard & Poor's and Moody's, might do in light of the IOUs. (AP, LAT)