California planned to sell four billion dollars in bonds to help pay its bills before revenues pick up in the spring.  Governor Schwarzenegger even did a radio ad encouraging Californians to buy them – and bought some himself.  The state opened the sale up to individual investors first – and they picked up nearly all of the four billion.  Now State Treasurer Bill Lockyer says the state will sell another half-a-billion; the sale’s now open to institutional investors, too.  However, Lockyer says they’ve been more lukewarm:

“They’re skeptical about our cash flow and honest or not honest budget an so it’s affecting things like our credit rating and whether we can insure our bonds and things of that sort.

The state budget is already expected to be three billion in the red. The high demand for bonds is good news for state officials, who had feared they would need to borrow money from the federal government to get through the credit crunch.