State budgets are a shambles. Sales taxes, corporate taxes, personal income taxes and other taxes are being raised all over the country.  The budget problems and consequential taxes will impact municipal bond rates and default risk, and after-tax investment returns on many forms of investment.

California Muni Money Funds:

We have been advising our California clients holding reserve assets in California tax-exempt money funds to consider moving assets to a national tax-exempt money fund or a taxable money fund while California works out its problems.  It’s one thing to take credit risk and interest rate risk in muni bonds intentionally, but if parking cash for safe keeping is the goal, the default risk (albeit perhaps temporary) or the the risk of being paid in IOU’s is just not worth holding reserve in California muni money market funds at this time.

California On The Ropes:

Reuters (June 19, 2009) “California… faces the prospect of a

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TODAY: Anti-corruption legislation marks renewed Medvedev campaign; stand-off in Brussels over Russia's call to limit EU observers in South Ossetia; ties with Bolivia to be strengthened; the ongoing pro-Stalin trend. A new package of anti-corruption legislation is to be introduced in the State Duma this week, says President Dmitry Medvedev. Under a new constitutional law, all state officials and their family members will have to declare their incomes and assets. The legislation comes just one week after Transparency International noted that corruption in the country is at its worst level for eight years. The Federal Security Service says it has terminated 120 terrorist organizations this year. Europe is ready to send its two hundred observers into Georgia to oversee the withdrawal of Russian troops, but is Russia ready to let them in? ...