From Bespoke Investment Group:
...Below we have included the CDS prices of these four states in our table of sovereign debt CDS prices that we post from time to time. All four states are closer to the top of the list than the bottom in terms of default risk. As noted earlier, Illinois has the highest default risk at 368.6 bps. The state sits between Dubai and Bulgaria. California ranks second out of the four at 352.9 bps, while New York and New Jersey are both right around the 290 bp level.
Illinois and California are both at higher risk than Portugal, while all four are in a worse situation than Spain. In terms of year-to-date change, Illinois default risk is up 117%, New York and New Jersey are both up about 87%, and California is up 35%.
Down in Washington, they're working on a bill right now that tries to get rid of too big to fail for financial firms. One has to wonder if they're putting any thought into the states. With the public so against any form of bailout at the moment, the states would be wise to not count on help from the federal level....MORE