The Conservative Cave

Current Events => Economics => Topic started by: bijou on July 07, 2009, 01:23:57 PM

Title: Big Banks Don't Want California's IOUs
Post by: bijou on July 07, 2009, 01:23:57 PM: Quote
A group of the biggest U.S. banks said they would stop accepting California's IOUs on Friday, adding pressure on the state to close its $26.3 billion annual budget gap.

The development is the latest twist in California's struggle to deal with the effects of the recession. After state leaders failed to agree on budget solutions last week, California began issuing IOUs -- or "individual registered warrants" -- to hundreds of thousands of creditors. State Controller John Chiang said that without IOUs, California would run out of cash by July's end.

But now, if California continues to issue the IOUs, creditors will be forced to hold on to them until they mature on Oct. 2, or find other banks to honor them. When the IOUs mature, holders will be paid back directly by the state at an annual 3.75% interest rate. Some banks might also work with creditors to come up with an interim solution, such as extending them a line of credit, said Beth Mills, a California Bankers Association spokeswoman. ...

http://online.wsj.com/article/SB124692354575702881.html
Title: Re: Big Banks Don't Want California's IOUs
Post by: Wineslob on July 10, 2009, 09:46:23 AM: I just hope my fellow Californian's wake up and boot the Demonrats that caused this mess..................but I doubt it, as usual SF and LA will "direct" the vote... :thatsright:
Title: Re: Big Banks Don't Want California's IOUs
Post by: DumbAss Tanker on July 10, 2009, 09:59:52 AM: Quote from: Wineslob on July 10, 2009, 09:46:23 AM
I just hope my fellow Californian's wake up and boot the Demonrats that caused this mess..................but I doubt it, as usual SF and LA will "direct" the vote... :thatsright:

Remember East Germany? Get out before they build the wall to keep you in, man!
Title: Re: Big Banks Don't Want California's IOUs
Post by: NHSparky on July 10, 2009, 10:10:15 AM: Newsflash--little guy individual citizens don't want them either. Maybe if they just sent in IOU's when they went to pay their property taxes, renew their registrations, or wrote IOU's for the tax on meals, etc, the state would start to take the hint.

Then again, prob'ly not.
Title: Re: Big Banks Don't Want California's IOUs
Post by: Wineslob on July 10, 2009, 04:12:28 PM: Quote from: DumbAss Tanker on July 10, 2009, 09:59:52 AM
Remember East Germany? Get out before they build the wall to keep you in, man!

I'm in the Northstate, all we need to do is cutoff the water................................ :evillaugh:
Title: Re: Big Banks Don't Want California's IOUs
Post by: JohnnyReb on July 11, 2009, 11:58:38 AM: ".....$26.3 billion annual budget gap......at an annual 3.75% interest rate."

Wish I could write IOU's of 26 billion for 3.75% annually.....I think I could do more with it than democrat politicians.
Title: Re: Big Banks Don't Want California's IOUs
Post by: AllosaursRus on July 13, 2009, 06:23:35 PM: Quote from: JohnnyReb on July 11, 2009, 11:58:38 AM
".....$26.3 billion annual budget gap......at an annual 3.75% interest rate."

Wish I could write IOU's of 26 billion for 3.75% annually.....I think I could do more with it than democrat politicians.

That's the biggest understatement I've read in months! I'm pretty sure my 13 year old grandaughter could spend money more accountable than anyone in DC! That includes BOTH parties!!!