California's Budget Woes May Rattle an ETF By Don Dion About this article: California is currently in the midst of a bipartisan mess. Failure to compromise on a budget has forced state government officials to make some desperate decisions. It will be interesting to see how the current news affects iShares S&P California Municipal Bond, the ETF designed to follow the price and yield performance of the State's muni-bond market. The state's bonds are currently ranked A2 by Moody's. This is the lowest ranking of all 50 states. This ranking, however, has recently been further threatened by ranking agencies Moody's and Standard & Poor's as the state government, headed by Gov. Arnold Schwarzenegger, failed to pass a budget to combat the already staggering $24.3 billion debt the state already faces. It is very possible that if Moody's and Standard & Poor's make good on their warning of multi-step downgrade, the state's bond rating could drop below its currently low A2... Or, call us at 1-866-321-TSCM (8726) Monday-Friday, 8 a.m.-6 p.m. ET. Outside the U.S. and in Canada, call 1-212-321-5200. More Stories From RealMoney Durable Goods Up Move Down the Tech Food Chain Jobless Claims Still High Bulls' Tenacity Is the Big Question Mark Should You Buy It? Pharmaceutical Product Development Bad News Trumps All Support for Banks Holds, For Now Bummer, Yields Are on the Rise Money on the Line Makes a Big Difference Structured Products: Unsafe at Any Price MORE STORIES FROM REALMONEY

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