Wall Street’s loss appears to be California’s gain. At least temporarily.

With stocks taking another nose-dive yesterday, investors gobbled up California bonds at a faster rate than anticipated. With their set interest rate, even California bonds backed by our shaky economy seemed preferable to the stock market rollercoaster.

These instruments are known as revenue anticipation notes. Given all that is going on with the state economy, can the state be sure it will receive the anticipated revenue? Yesterday, the Department of Finance revealed the state’s unemployment rate increased to 7.7% for August and the General Fund fell $923 million below expected revenue forecast in the 2008-2009 budget act. Investors are betting on the odds that governments rarely go belly up and are relying on the fact that government has the power to tax.

With the successful sale of the notes, California may avoid an immediate budget crunch that the governor anticipated when he sent his letter to U.S. Treasury Secretary Henry Paulson inquiring about a $7 billion loan. The original goal of the revenue anticipation notes was $4 billion, but the early success indicates the sale may reach $4.5 to $5 billion.

Governor Arnold Schwarzenegger is pleased with the results enough that he is ignoring state Treasurer Bill Lockyer’s harsh comments about the governor over a couple of vetoes, and instead showering the Treasurer with praise for selling the notes.

But what does all this mean? California is still in a financial mess. Tax revenue continues to fall. New obligations must be meet when these revenue anticipation notes come due. And, there are even more bonds on the November ballot that, if passed, could add to the state’s overall debt burden.

The bond sales short-term success for the state treasury should not remove focus from the governor and legislative leaders to call a special session of the legislature to get a handle on the state’s finances. Not wanting to spook buyers of the notes, on a call the governor had with legislative leadership yesterday they decided not to call the session yet.

All the notes will be sold by week’s end. The state’s economic situation will not be better by then. It is time to put an action plan in place.