In recent days, there have been reports originating out of the Asia Times that the Chinese government has given the word to state investment agencies to liquidate any US fixed-income holdings that aren't EXPLICITLY backed by the US government.
Thus this could be straw that breaks California's back.
The Telegraph notes that among the country's non-officially backed US holdings is California debt. If it goes starts liquidating those -- in the middle of the state's budget crisis -- then we've got serious problems.
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