The Ripple Efect of California's Bankruptcies

Jane WellsCNBC

In the latest sign that some U.S. cities are barely making ends meet, the city of Oakland, California Thursday priced a $211 million taxable bond which will help it cover pension obligations. Yes, borrowing money to cover retiree pay.

Moody's Investor Service has proposed adjusting its U.S. public sector pension data to put the unfunded liabilities at $2.2 trillion, nearly triple what they were two years ago.

While market reaction to San Bernardino's pending bankruptcy has been "much calmer than expected," Envision Capital's Marilyn Cohen added, "people are asking 'Is Riverside next?'" referring to the other major city in California's Inland Empire.

The heat from three California bankruptcies in two weeks is fanning out like a late summer brushfire. Los Angeles County officials have ordered a review comparing their financial practices to now-bankrupt Stockton.

Compton's auditors just quit and refuse to sign off on the city's financial reports. Read More: