Monday, the Silicon Valley, San Jose Business Journal wrote "California Treasurer: We will not default on bonds", which said, "The California's state Treasurer's office on Monday refuted an analyst's recommendation last week that investors dump California municipal bonds and that the state is likely to default. Analyst Martin Weiss of Weiss Research said in a June 22 report that California's financial woes create 'a very high probability' that California will eventually miss debt service payments." The article adds, "Once downgraded, California's rating is likely to fall below the minimal level legally required for most money market funds, forcing them to dump California paper posthaste," quoting Weiss. `One manager we spoke with, however, dismisses this threat, saying that California general obligation bonds have been "second tier" for some time and that he'd be surprised if money funds hold this direct CA debt in any quantity.

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