Prior discussion:
speaker: MR. KEEHN.
text: In terms of your second question, if in fact this does evolve in a way that suggests there are questions as to GM's viability, it's only a matter of time until the market will pick that up and make the rollover of paper a very difficult issue. So, this is a very significant concern in more than just a District context. 
speaker: VICE CHAIRMAN CORRIGAN.
text: Between GM and GMAC what do they have--something like $20 billion of commercial paper outstanding? 
speaker: MR. KEEHN.
text: I don't know if it is that large; it is huge. 
speaker: CHAIRMAN GREENSPAN.
text: President Parry. 

MR. PARRY. "The weakness that we're seeing in California certainly is a concern."

Full utterance: Mr. Chairman, conditions in the Twelfth District are little changed from our last meeting, with continued weakness in California offsetting modest growth in the other District states. District-wide employment in September fell at a 1.1 percent annual rate, led by weakness in California. California employment by itself fell at a 3.8 percent annual rate in September and 2.1 percent in October; that brings the state's employment to a new cyclical low. I might also point out that there's a consensus among forecasters that the actual level of employment is 100,000 less than is being reported in the survey. Last year there was a similar view that employment was being exaggerated, and revised figures certainly confirmed that. Outside of California, District employment expanded at a 3.3 percent annual rate in September. The contacts we have in Alaska, Arizona, Idaho, Nevada, Oregon and Utah report fairly favorable conditions. But California is weak; in Washington conditions are flat due to production cutbacks in aerospace; and Hawaii is affected by slumping tourism. The weakness that we're seeing in California certainly is a concern. Already announced cutbacks in aerospace, defense, and state and local governments, together with an overhang in commercial real estate, have led forecasters to project that we're going to see continued job losses in the state of California through the end of 1993. This weak projected economic performance threatens California with yet another state budget shortfall of at least $4 billion through the end of the next fiscal year, which is 1993-94. Reflecting this ongoing weakness, lending continued to decline in October at large District banks. Commercial, consumer, and real estate loan volumes are down from their year-earlier levels. Turning to the national economy, our outlook is similar to that of the Greenbook if we assume no change in monetary policy through the end of that period. The modest 2-1/4 percent growth that we anticipate, again assuming no further easing, is down 1/2 percent from what we expected at the time of the October meeting. That's mainly a result of the higher value of the dollar and prospects for slower economic growth abroad. Consistent with sluggish growth in output, we expect to see only small declines in the unemployment rate over the next year or so and thus continued downward pressure on underlying inflation. Our view is that the CPI will come in at around 2-3/4 percent in '93 and a bit lower than that in '94. Thank you.

Opinion: yes