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Golden State Gets Upgrade

February 8, 2013

In a diversified portfolio, municipal bonds remain a worthy investment.
-Frank Holmes, chief investment officer, U.S. Global Investors

The turbulent clouds that settled upon California’s bond market are beginning to dissipate, as the state’s general obligation debt was recently upgraded to ‘A’ by Standards & Poor’s. It has been almost a year since the rating agency has had a sunny outlook on the Sunshine State, but a series of improving economic data and better fiscal position have been turning things around.

Business Insider’s slideshow showcases several key factors of how the state “came back from the brink.” Since bottoming around 2009, payrolls, home prices and economic activity have been increasing in California. Silicon Valley’s tech area is booming, San Francisco’s foreclosure rate is “one of the lowest in the nation” and the state has a Democratic supermajority, which may make political gridlock a thing of the past, says the online financial news site.

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