California Issues IOUs, California GO Bond Bets

Kudlow talked about California's General Obligation bonds last night. I'm trying to find a California Municipal Bond ETF consisting strictly of general obligation bonds. Info from the video:
  • Martin Weiss of Weiss Research released a report on June 22 saying the bonds are a sell.
  • Matt Fabian of Municipal Market believes California GO bonds are a buy based on yield.
  • Jon Schotz of Saybrook Capital likes the GO bonds because by law they are second in line behind education in payouts.

"SAN FRANCISCO (Reuters) - California's lawmakers failed to agree on a balanced budget by the start of its new fiscal year on Wednesday morning, clearing the way to suspend payments owed to the state's vendors and local agencies, who instead will get "IOU" notes promising payment.

The notes will mark the first time in 17 years the most populous U.S. state's government will have to resort to the unusual and dramatic measure."


"To conserve cash, State Controller John Chiang plans to issue IOUs by Thursday to the state's vendors, local agencies overseeing health programs and various recipients of state aid -- including the elderly and disabled and college students.

He plans to send $3.36 billion in IOUs this month to help maintain $10.9 billion in other payments, including money owed to investors holding California's general obligation debt." (Full Article)

Relevant Links:
11th-hour votes on state budget fail (LA Times)
California, other states face tough budget choices (AP)
Caltrain declares fiscal emergency (Mercury News)
Oakland Denies Bankruptcy Rumors, General Fund Drying Up (DistressedVolatility)
Municipal Bonds—Staying on the Safe Side in Rough Times (
Time For California Muni Investors To Take A Stand (IndexUniverse)