California's real debt is not $28 B, it's at least $167 B

[Ad Orientem]

Holy bleep!
http://www.nytimes.com/2012/09/21/us/ca ... mates.html

All I can say is that this is Exhibit A for why you should only buy sovereign debt bonds backed with a printing press. California is in DEEP trouble.

[Greg]

I guess the one benefit as long as the California bonds wouldn't default would be that you wouldn't pay state federal taxes on your gains which is a big chunk in a state such as this.

Modified: state to federal

[Ad Orientem]

I guess the one benefit as long as the California bonds wouldn't default would be that you wouldn't pay state taxes on your gains which is a big chunk in a state such as this.

You don't pay state or local taxes on interest off Federal bonds either.

[Greg]

I guess the one benefit as long as the California bonds wouldn't default would be that you wouldn't pay state taxes on your gains which is a big chunk in a state such as this.

You don't pay state or local taxes on interest off Federal bonds either.

My apologies I meant federal taxes. I believe that's true. I'll modify my original post.

[Ad Orientem]

I guess the one benefit as long as the California bonds wouldn't default would be that you wouldn't pay state taxes on your gains which is a big chunk in a state such as this.

You don't pay state or local taxes on interest off Federal bonds either.

My apologies I meant federal taxes. I believe that's true. I'll modify my original post.

If you are fortunate enough to be very wealthy and unfortunate enough to have most of your money in fully taxable accounts I might see an argument for muni bonds as part of a very diversified portfolio. But you really need to be prepared to handle the added risk and volatility. California is not unique. Most of the states have been playing fast and loose with their bookkeeping.

And if your not in the top tax bracket munis just really don't make sense. It goes without saying that they are unsuitable for a PP.