Governor Arnold Schwarzenegger has warned Treasury Secretary Henry Paulson that California might need an emergency loan of up to $7 billion from the federal government. The state depends on short-term loans to conduct its day-to-day operations but is being locked out of the bond market by the global credit crunch.  Without the money, state employees could be laid off and payments to schools and other government entities could be suspended within weeks.

California isn't the only state facing such problems. New Mexico, Massachusetts, and Maine have all considered or have canceled projects due to the crunch.  But its massive budget size makes it unusual.  "California is so large that our short cash-flow needs exceed the entire budget of some states," the Governator wrote to Paulson.  Sounds like a job for a movie super hero!