The California Government is Going to Pay its Bills With IOUs. Microsoft Says We Ought to Use More Nuclear Power in the U.S.

MARKET SYNOPSIS

California has no more cash, and will start paying off their bills with IOUs. However, California has an option to use reserve funds to aid them in these hard times. Microsoft made affordable computers possible, can they also give advice to find affordable renewable energy. Microsoft suggests focusing on nuclear energy, because it is a zero carbon energy source. The market is up today, but we are still in a bear market.

California is going to pay their state bills with IOUs

Legislators did not pass California’s $11 billion budget cuts. Beginning July 2 California will start paying their bills, due to the cash shortage. The cash shortage is expected to increase from $2.8 billion in July to $6.5 billion in cash shortage by September.  California is currently suffering a severe housing slump, credit crunch and high unemployment rate. As a result California has a lot of revenue, and unemployment is up by a staggering 11.5%. The government is tempted to use reserve funds to aid themselves during this crisis. California has $8.6 billion of bonds outstanding; by taking money from the reserve funds will deflate the value of the bonds. Currently California’s bonds are rated by the S&P as an A-plus bond, the fifth highest investment grade. The value of the bonds is backed up by sales tax and general pledges from the state. If California intends to keep their bonds at an A-plus rating, they must figure out a way to survive in this crisis.

Nuclear power is the key to climate control  

Microsoft went from making personal computers affordable to giving advice about renewable energy. Craig Mundie, the man that replaced Bill Gates, said that we should focus more on nuclear power. Nuclear power is a zero carbon energy source, as suppose to renewable energy that will still output carbon dioxide, which should be research and used in the near future. Congress is currently seeking to pass a climate bill that will focus on developing solar, wind and other clean sources for power on Friday. The downfall of these alternative power sources is that it is challenging to produce energy on a large scale. The greatest advantage of nuclear power is that there is no problem in harnessing its energy on a large scale.

Market is up for today

As companies close down their stores other businesses gain customers. Best Buy is benefiting from the Circuit City bankruptcy. And Bed Bath and Beyond is gaining more customers due to Linen and Things liquidations. Competition is declining in some markets, meaning that there are a few companies left that are benefiting from this crisis.

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TOP ADVANCERS

COMPANY	LAST SALE	CHANGE NET	VOLUME
CAEL	$2.27	.99     77.34%	18,936,590
BBGI	$2.71	.91     50.56%	23,957
JAZZ	$4.48	1.23   37.85%	13,911,438
ROYL	$2.81	.69     32.55%	578,079
CPII	$10.23	2.43   31.15%	233,028

TOP LOSERS

COMPANY	LAST SALE	CHANGE NET	VOLUME
OSUR	$2.53	.75   22.87%	806,332
ACXM	$8.92	2.45   21.55%	5,104,272
AKT	$5.10	1.30   20.31%	82,340
CBKN	$4.22	1.08   20.38%	26,267
CVLY	$6.36	1.50   19.11%	27,333