This week at a meeting with investors JP Morgan Case CEO Jamie Dimon said the Greek financial crisis is nothing like the financial nightmare in California.
Dimon warns “there could be contagion” if California the largest state in the Union was unable to pay its debts. “Greece itself would not be an issue for this company, nor would any other country,” said Mr Dimon. “We don’t really foresee the European Union coming apart.”
Dimon says JP Morgan Chase has little involvement in the financial scandal that is rocking the European Union.
California which has $20 billion deficit that Governor Arnold Schwarzenegger must cut. The state legislature has passed $3 billion in budget cuts and other measures. California needs to cut $10 billion in the next 16 months. The state is looking for help from Washington to bailout the state of $7 billion.
State Controller John Chiang says if the state find a plan to raise revenue the state will need to issue IOU’s and force state workers to furloughs. In 2009 the state issues $3 billion IOU’s to the tax payers refunds and other creditors.
“I can’t write checks without money; that’s against the law. My main goal is to keep the state afloat, but I won’t be able to do it without the help of new legislation,” said Mr Chiang.