California and Governor Brown

Governor Brown: The extra interest rate buyers demand to own 10-year California obligations reached 0.25 percentage point this month, the lowest since at least January 2013, when Bloomberg data begin, while 0.33 percentage point is required for comparable-maturity Pennsylvania securities, according to Business Week. California has recovered from a deeper hole and is viewed as more fiscally responsible under Governor Brown, Craig Brothers, an asset manager in Los Angeles at Bel Air Investment Advisors LLC, which oversees $7 billion, said by e-mail. Investors view California as an improving credit with strong demand, and Pennsylvania as a stable or weakening credit with less demand. 2001 Redux California and Pennsylvania are equal in the eyes of Moodys Investors Service. Yet bondholders are rewarding the Western state as it turns years of deficits into a record surplus, while demanding higher yields from Pennsylvania as it fails to tackle pension costs. The difference is that California lawmakers led by Governor Jerry Brown, buoyed by tax revenue from technology workers, won the state an Aa3 grade last month from Moodys, the fourth-highest mark and the states best since 2001. Pennsylvania, meanwhile, had its score cut to that level last week by Moodys, which cited one-time revenue fixes in this years budget. Its the states lowest grade since 2000. (news.financializer.com). As reported in the news.