State Budgets: Day of Reckoning

This segment from 60 Minutes on state debt is a much watch for anyone concerned about their financial well-being. The house of cards is about to collapse now that the Federal stimulus money that was propping up the worst states is drying up. Will people like Chris Christie and Bob McDonald be recognized for making the tough decisions and not kicking the can down the road? Any bets on which state will be the first to go bankrupt? This is coming at the federal level as well. It is just a matter of when, and which party will look reality dead on in the eye.

But being ever the contrarian, especially when bad news makes the national media, I'm spotting a potential investment opportunity here. I'd stay away from basket cases like California (who symbolically voted to go bankrupt in the last election) Illinois, Nevada and Michigan, but I'd research the healthy, fiscal sound states for investment opportunities in their muni bonds. They will get drug down into the bargain basement as the weaklings begin to fail.