The state also has struggled to implement cost-cutting measures that were part of the $85 billion spending plan approved in July. Courts blocked part of the budget that cut funding for home care for the disabled and another part that borrowed $800 million from an account that sets aside money for local transportation agencies.
An accounting error means the state has to spend almost $1 billion more on schools than budgeted. Officials also underestimated the cost of health care for the poor by $900 million, and lawmakers failed to pass legislation to realize $1 billion less in anticipated prison spending.
Combined, the state faces a $6.3 billion gap in the current year and another $14.4 billion in the next.
…
Democrats, who control both chambers of the Legislature, are expected to oppose wholesale cuts to health and welfare programs. Such resistance, along with Republican opposition to tax increases, will be exacerbated as election-year politics heightens the partisan divide. Half of the state’s 120 Assembly and Senate seats go before voters in November.
The basic problem is gerrymandering:
I’d place California’s ridiculous two-thirds majority vote requirement for budget passage higher on the list of culprits that create gridlock. But I wouldn’t argue with Schwarzenegger’s thesis: Gerrymandering tends to reward extremism in both parties and punish compromise, locking lawmakers into ideological corners.
Districts were shaped to be “safe” for either a Democrat or a Republican. As a result, the real election battles have been waged in the party primaries. And since low-turnout primaries normally are dominated by party purists, the contests usually have been won by candidates who run the furthest to the left or the right.
Republicans pledge not to raise taxes. Democrats promise a laundry list of social programs the state can’t afford.
Then they come to Sacramento and can’t compromise.
Without wishing to be overly dramatic, it is this sort of legislative impasse that has enabled many dictators in the past to come to power – most famously, Julius Caesar.
The markets closed early today, in order that members of the most highly paid profession on the planet will have additional opportunity to bark at counter-clerks and restaurant personnel who have to work. Me, I’m just going to put my feet up and sneer at the unemployed.
In the spirit of Christmas, the TSX has not yet made closing data available, despite the fact that the market closed three hours ago. I will update the indices … later.
…later: A quiet day, with PerpetualDiscounts basically flat at FixedResets losing (yes, losing!) 4bp.
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
|||||||
| Index | Mean Current Yield (at bid) |
Median YTW |
Median Average Trading Value |
Median Mod Dur (YTW) |
Issues | Day’s Perf. | Index Value |
| Ratchet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.9761 % | 1,614.7 |
| FixedFloater | 5.80 % | 3.93 % | 39,441 | 18.86 | 1 | 0.9688 % | 2,687.7 |
| Floater | 2.43 % | 2.81 % | 113,511 | 20.21 | 3 | 0.9761 % | 2,017.3 |
| OpRet | 4.86 % | -1.64 % | 126,708 | 0.09 | 15 | 0.0306 % | 2,320.9 |
| SplitShare | 6.43 % | -7.57 % | 211,093 | 0.08 | 2 | -0.0443 % | 2,089.3 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0306 % | 2,122.2 |
| Perpetual-Premium | 5.86 % | 5.83 % | 76,456 | 2.31 | 7 | 0.0000 % | 1,883.5 |
| Perpetual-Discount | 5.82 % | 5.85 % | 197,157 | 14.10 | 68 | -0.0023 % | 1,792.9 |
| FixedReset | 5.40 % | 3.65 % | 337,146 | 3.86 | 41 | -0.0356 % | 2,168.8 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| POW.PR.D | Perpetual-Discount | 1.18 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-12-24 Maturity Price : 20.50 Evaluated at bid price : 20.50 Bid-YTW : 6.12 % |
| TRI.PR.B | Floater | 1.25 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-12-24 Maturity Price : 21.01 Evaluated at bid price : 21.01 Bid-YTW : 1.87 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| GWO.PR.L | Perpetual-Discount | 40,350 | Nesbitt crossed 10,000 at 23.30. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-12-24 Maturity Price : 23.12 Evaluated at bid price : 23.26 Bid-YTW : 6.10 % |
| RY.PR.R | FixedReset | 33,735 | RBC crossed 29,100 at 27.97. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-03-26 Maturity Price : 25.00 Evaluated at bid price : 27.95 Bid-YTW : 3.44 % |
| IGM.PR.B | Perpetual-Discount | 28,200 | Inventory Blow-out Sale YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-12-24 Maturity Price : 24.11 Evaluated at bid price : 24.30 Bid-YTW : 6.13 % |
| GWO.PR.X | OpRet | 27,447 | Called for redemption. CIBC bought 17,500 from Desjardins at 26.01. YTW SCENARIO Maturity Type : Call Maturity Date : 2010-10-30 Maturity Price : 25.67 Evaluated at bid price : 25.98 Bid-YTW : 3.13 % |
| BNA.PR.C | SplitShare | 17,550 | National crossed 15,100 at 18.80. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2019-01-10 Maturity Price : 25.00 Evaluated at bid price : 18.70 Bid-YTW : 8.47 % |
| POW.PR.D | Perpetual-Discount | 15,551 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-12-24 Maturity Price : 20.50 Evaluated at bid price : 20.50 Bid-YTW : 6.12 % |
| There were 10 other index-included issues trading in excess of 10,000 shares. | |||