First read California's Fiscal Outlook (2011/12 Budget). LAO expects a $20 billion deficit through 2015/2016 (operating shortfall). Chris Whalen of Institutional Risk Analytics was on Tech Ticker yesterday and said California will default on its debt and "force their creditors to come to the table and talk". Or they will issue their own currency again like they did in the 1840s! Cali-bucks. CA$/IL$ coming soon? Whalen said "I think eventually the debt will have to be haircut and pension obligations are going to have to be repudiated". "If there's even a hint of a bailout, you're going to have Illinois, New York, several other states right behind California". The "IOU game" will continue until people don't take the "funny money" anymore. Crazy times. Video after the jump.