California and Illinois race to bankruptcy

Illinois’ powerful Wall Street syndicate of bond underwriters led by Morgan Stanley and Goldman Sachs just postponed the state’s sale of $3.7 billion of four year pension bonds. According to an Illinois budget officer, the delay is “to give potential buyers time to go over Governor Pat Quinn’s fiscal 2012 budget.” This is gov-speak for, “investors aren’t buying because they think we will default.”

The state spokesman went on to say: “We are receiving a great deal of international interest on these bonds. It is only appropriate to give investors time to digest the governor’s budget speech which is Wednesday.” This is serious more gov-speak for, “does anyone speak Chinese?”

Chriss Street decodes the bankruptcy plans so we don't have to.