Municial Bonds are under review in California following the bankruptcy of three cities.

Moodys announced the review saying that ther is a growing trend to use bankruptcy by cities as a way to escape their mounting debt.

Municipal bonds have been the one area everyone assumed was safe. After all cities would want ongoing access for future bond measures.

The recent bankruptcies however, and the huge debt held by Californian cities, casts this all in doubt. If the investors grow to worry that municipal bonds may not be safe after all it will cause a panic.

This panic would doom California and her cities.

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