Bad news out of California, where Schwarzenegger is asking Paulson for a $7 billion loan because the state is "is unable to access routine short-term loans that it typically relies on to remain solvent." And California isn't the only state facing problems accessing the bond markets. "New Mexico was forced to put off a $500-million bond sale, Massachusetts had to pull the plug halfway into a $400-million offering, and Maine is considering canceling road projects that were to be funded with bonds." That's really bad news. This is one example of how the financial panic spills over: If states can't finance their operations, it's not Wall Street that bears the blow. Meanwhile, the bailout just cleared the House 263-171, which is good news. We'll have to wait a day or two to see if that loosens the credit markets.
