This page has been archived and commenting is disabled.

California One Step Closer To Insolvency After State Cancels $2 Billion General Obligation Bond Sale

Tyler Durden's picture





 

Five days ago a great white hope appeared for the great bankrupt Golden State (Baa1/A-), in the form of $2 billion in GO bonds, which were supposed to be promptly syndicated via underwriters JPMorgan and Morgan Stanley. This would have been the first bond sale for California since November: a critical milestone as the state creeps ever closer to a full-on default. Unfortunately, the creeping just turned into a casual jog after Jane Wells (@janewells) just tweeted that California has cancelled its bond sale "after legislature fails to approve cash management flexibility bill [the] Treasurer said he needed to attract investors."And seriously, did California think it would succeed where so many other high yield issuers have recently failed?

Below is the official bond sale calendar from Lockyer's website.

So as Lockyer contemplates how to best approach DC about a bailout, here are recent California CDS levels. Pick your entry point.

Chart via Lehman Live

h/t Credit Trader

 


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 02/24/2010 - 22:05 | Link to Comment makeyoumiss
makeyoumiss's picture

Gee, who woulda thunk it.

Thu, 02/25/2010 - 08:33 | Link to Comment B9K9
B9K9's picture

I 'thunk' it until I looked into the situation a little deeper. As a born & bred, life-long native, trust me when I say it's obvious the state has changed for the worse. So, donning my bean-counter cap, I dove head first into the 1,000 page budget.

As it turns out, California is nowhere close to being insolvent or on the brink of bankruptcy. Compared to the US, the proposed budget is only 6% of state GDP vs 25% for the USA. The projected deficit is only 1% of state GDP vs 9% for the USA. Total indebtedness is only 6% of state GDP vs 89% for the USA. (Not counting all the various unfunded federal liabilities like SS & Medicare which push the total national debt towards $100 trillion or 700% of GDP.)

Clearly, if the state had access to the printing press, it would be considered in much, much better shape than the country as a whole. Which hints at where the state (and perhaps others) will be heading when we finally enter the national crisis stage.

What is going to happen in California, and what so many people miss (which is the point of my little note here @ good 'ole ZH), are the available cost reduction alternatives that are going to be implemented. Looking closely at the 'small-print' way back in the rear of the governor's proposed budget (which is where the "good" stuff is always located), one comes across various trigger actions resulting in massive cutbacks & layoffs. Add them up, and the state instantly goes into black.

Some of the public policy advocacy groups have gotten wind and are starting to sniff out the details with the predictable screeching & crying. But when push comes to shove, there is going to be no other alternative. The real biggie is when the Legislature will be forced (by a 2/3 vote) to suspend Prop 98 which provides a locked-in guaranteed portion of the budget for school funding.

When that happens, everything is placed on the table. At that point, we're looking at a 10% payroll cut across the board, a 5-10% boost in retirement contributions, and a 5-10% reduction in headcount. In addition, massive cut-backs will be initiated in various social services programs, including Medi-Cal and other gold-plated give-aways for illegals.

In my various conversations with the kind folks at the DoF, I had mentioned that if this were a private turn-around situation (which is where I cut my teeth), this would be imminently 'do-able'. The only problem, of course, is the political situation involving a public entity.

But if you step away and look at the big picture, the 'political situation' is merely a cover for those who still have "options". Once the options are no longer available (eg getting bailed out by fed.gov or issuing yet more GO bonds), and the harsh light of day is burning brightly (read: Controller's office is reporting no more cash in the till), it's really all over for the public sector leech-fucks except for the crying.

Thu, 02/25/2010 - 08:53 | Link to Comment Anonymous
Thu, 02/25/2010 - 09:43 | Link to Comment B9K9
B9K9's picture

Ah, the good 'ole 14th Amendment argument. Sorry, I'm a state's rights advocate. Review a little history, and you may discover how the US of A was originally formed. Hint: it's a federation of sovereign states (hence the electoral college). When this sucker goes down, ain't gonna be nobody payin' off Uncle Sam's debts, simply because there's no value-add in the proposition. However, OTOH, a true representative entity that delivers actual benefits will strive to maintain a sound credit basis.

We can see the same mentality being played out everyday on an individual basis. Take someone who has credit-card debt at 5-6% of their income (Calif) vs being underwater on their mortgage to the tune of 200%+ of their gross income (USA). What do they do? Why, they pay the c/c bill religiously since in many cases it's their last remaining life-line. Meanwhile, the mortgage hasn't been paid in over a year, while the 'home-owner' still gets to live there rent free.

IMHO, the USA is toast - the center cannot hold. After the default/repudiation of the nat'l debt, we'll see a devolution to regional alliances and/or super-states + satellites.

 

Thu, 02/25/2010 - 10:19 | Link to Comment Anonymous
Thu, 02/25/2010 - 13:07 | Link to Comment Anonymous
Thu, 02/25/2010 - 09:01 | Link to Comment Anonymous
Thu, 02/25/2010 - 10:14 | Link to Comment Anonymous
Thu, 02/25/2010 - 11:20 | Link to Comment B9K9
B9K9's picture

http://www.ebudget.ca.gov/pdf/BudgetSummary/SummaryofSignificantChangesb...

You gotta read through it page by page. Note that this is a political document, so after very long preambles lavished on all the claimed improvements, they slip in a few lines that include things like "A savings of $1.8 billion as a result of ..."

It only takes a handful of these to all of a sudden come up with $20 billion in cost cuts. As I mentioned in another post, if you don't want to snoop through the details, simply check out any public advocacy group. They've got it all laid out starting with "Women, minorities & children hit hardest". LOL

This thing really is a comedy show. The cancelled GO auction was a result of the Legislature accomplishing nothing of substance at Monday's 'historic' special session called to deal with the budget crisis.

Next up: the Controller telling them there's no money to pay the bills, which will force Arnie to shut-down the entire state government apparatus. After that, Prop 98 gets suspended and away we go with the "triggered" 10-20% cuts across the board - including schools.

Thu, 02/25/2010 - 09:23 | Link to Comment Jeff Lebowski
Jeff Lebowski's picture

I won't dispute you, but two questions from the CA controller's page - if you would, please share your comments.

 

1.  General Cash Outflow

http://www.sco.ca.gov/Press-Releases/2010/02-10-10cashbalance.pdf

2.  Income tax receivables (only April available) and consequences of lower tax revenue decreases dwarfing the cost reduction alternatives

http://www.sco.ca.gov/taxtracker.html

 

Everyone is entitled to their opinion, but I believe the combination (nationwide) of lower tax receivables, unemployment, social security, and baby-boomers retiring and moving from equities into annuities is the perfect storm and too obvious to be a black swan.

 

Thu, 02/25/2010 - 10:05 | Link to Comment B9K9
B9K9's picture

The Controller's web page tells the story of the precipitating event(s) which are going to trigger various emergency measures. However, it provides no clues as to the various budgetary alternatives. For that, you have to look at the detailed budget - see the link above.

Edit: I've found out over my career that sometimes it's easier to let an opponent reveal where opportunities are hidden, by tipping off what they're trying to protect, rather than engage in a strictly top-down analysis. If anyone is curious as to where the looming massive cuts in the California budget are coming from, one need look no further than the screeching pigs crying the loudest:

http://www.cbp.org/

Thu, 02/25/2010 - 09:38 | Link to Comment Anonymous
Thu, 02/25/2010 - 11:35 | Link to Comment B9K9
B9K9's picture

California is simply a precursor to what is going to occur at the Federal level when Ben is finally forced to quit printing benjamins. The harsh reality is that the $USD is linked to a very hard oil peg. We **think** we can print, but in actual fact, we're no different than Greece.

So what happens when fed.gov has to implement the exact same set of cost reduction measures that are occurring in California and the other states? Deflation, baby, deflation.

Right now, the only thing propping this sucker up is QE. Once Mr Market forces Ben's hand, it's all downhill from there.

With no/limited UI benefits, reduced welfare/food support, high unemployment, and a pissed-off & armed public angered at the $trillions lavished on the banker/politico mafia, it's gonna be an epic SHTF moment.

They'll be teaching this shit as critical history 200 years from now in all elementary schools.

Thu, 02/25/2010 - 09:47 | Link to Comment spanish inquisition
spanish inquisition's picture

Interesting..I will posit a strategic cancellation. If the FED has enough to back door/ back stop Greece bonds, they sure as well have enough to help out CA. Charity begins at home, I suspect they are working out the details.

It's going to be based on the Greece model. FED structures it so Greece gets cheap money and looks like they are meeting obligations (and the FED looks like it is not involved)

I think the smaller world sovereigns are catching on. Either go to sovereign debtors prison for 30 years or say FU. The FED will run in with money and support.

So, in conclusion, This can go on indefinitely and will work if we all believe...so , everyone pull out a dollar, look at it and say "It's really worth a dollar, it's really worth a dollar" and we will be fine!

Thu, 02/25/2010 - 11:51 | Link to Comment geopol
geopol's picture

Controller's office is reporting no more cash in the till), it's really all over for the public sector leech-fucks except for the crying.

 

Yes, Fuck them after all...No private sector to run to now....you bunch of arrogant little bureaucrat pricks..

Sounds a little harsh...yes?

 

 

Thu, 02/25/2010 - 12:04 | Link to Comment Anonymous
Thu, 02/25/2010 - 13:12 | Link to Comment Anonymous
Wed, 02/24/2010 - 22:06 | Link to Comment FLETCH
FLETCH's picture

just a nip here, tuck there and a boob job should fix CA right up!

Wed, 02/24/2010 - 22:38 | Link to Comment Dark Helmet
Dark Helmet's picture

Like ohmygod like California is like soooo totally bankrupt like oh my god!

Wed, 02/24/2010 - 22:50 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

We passed the minor surgery decision point decades ago. Time to cut off the head, freeze it and grow a new body. You know what to do next, right?

Wed, 02/24/2010 - 23:13 | Link to Comment Anonymous
Thu, 02/25/2010 - 00:37 | Link to Comment madRazor
madRazor's picture

Just hitch the head atop the bio-engineered super-body of Spiro Agnew and take over the world!

Thu, 02/25/2010 - 03:26 | Link to Comment malusDiaz
malusDiaz's picture

You DID find the Head of Vecna!

 

This Time its real for sure! Now go ahead, you know what you need to do next...

Thu, 02/25/2010 - 06:09 | Link to Comment Problem Is
Problem Is's picture

"just a nip here, tuck there and a boob job should fix CA right up!"

Broke Ass Arnold's $12 Billion Cee-ment Ditch Project

...Known as the "Peripheral Canal"... is a giant California Tit Job.

This is what steroids does to your brain. This is Arnold's brain on drugs.

"I govern a broke ass state fast on its way to bankruptcy so my cure is to issue ANOTHER $12 Billion in bonds to dig a ditch no one needs."

Hey Asshole Arnold... make like a Palin McMILF tree and leave... early.

Wed, 02/24/2010 - 22:12 | Link to Comment mnevins2
mnevins2's picture

My personal "entry point" is N-E-V-E-R.

Coincidentally, since I'm not a super-genuis/quant, I have the same "entry point" with equities. Who'd have thunk it?

I guess that Lockyer better get on the phone with Uncle Ben ASAP!

Wed, 02/24/2010 - 22:14 | Link to Comment ShankyS
ShankyS's picture

Why can't people accept that the whole global financial system will eventually implode? I mean really. Let's get on with it so a real recovery can happen.

Wed, 02/24/2010 - 22:23 | Link to Comment merehuman
merehuman's picture

Read your Blog a few times.

We are all waiting, knowing it has to, knowing it will....But when??? Should have fallen apart already!

We should be thankful for the extra time we have to prepare and warn others.

Each one of us must take SOME responsibility and advise family, friends and neighbors.

This is not an exercise! This is not a drill !

Wed, 02/24/2010 - 22:39 | Link to Comment Dark Helmet
Dark Helmet's picture

"The ability of the market to defy gravity and deny reality exceeds your ability to bet against it."

Wed, 02/24/2010 - 22:44 | Link to Comment jdrose1985
jdrose1985's picture

delete

Thu, 02/25/2010 - 10:35 | Link to Comment Anonymous
Wed, 02/24/2010 - 22:48 | Link to Comment jdrose1985
jdrose1985's picture

LOL Shanky Re: falling apart. +1

 

Each one of us must take SOME responsibility and advise family, friends and neighbors.

It's sad, because I've tried to be responsible and let people know what's going on..(MM freeze, credit contraction, dow-gold, etc) I've made charts, put things in historical context and laid it out simply as can be.

I'm pretty bummed. To this point, I've been totally ignored except by my lifelong best friend and his brother who both cashed out their IRA's and paid down debt about 2 weeks ago. I mean, i'm not alarmist about it nor am I pushy in any way. I've gone about it in a way of trying to break it down in layman's terms. It's not rocket science.

I just feel like people don't even give a shit about what's going on. Been struggling with this for weeks, it's got me down and out I guess. I never worry about things, but this has me kinda shook up.

I'm not sure what to do. I bid my time, waited til the point where the DX started rallying and stocks stalled, being patient.

I guess people just see the monthly statements getting higher and higher and think i'm crazy or something.

I can only save myself.

Wed, 02/24/2010 - 23:14 | Link to Comment Anonymous
Thu, 02/25/2010 - 06:48 | Link to Comment 35Pete
35Pete's picture

Betting, based on several years of informationa and events, that the equities market is going to crash more than the combined penalties and taxes of earlier liquidation.

I'd do it too with my 401K but I'm stuck.

Plus, there's chatter on the Hill about "saving Americans" by offering to convert retirement accounts to gubbmint annuities guaranteed to pay an income stream for life.

Shockingly, and this really surprised me [/sarcasm], the gubmint would convert your IRA to treasury bonds.

And promptly spend it of course.

 

Thu, 02/25/2010 - 08:39 | Link to Comment Anonymous
Thu, 02/25/2010 - 19:03 | Link to Comment Anonymous
Wed, 02/24/2010 - 23:44 | Link to Comment Anonymous
Thu, 02/25/2010 - 01:27 | Link to Comment JohnG
JohnG's picture

Avg Joe is a complacent Kool-aid drone.  I've been trying the same thing.  Just people don't get it.

I hope they don't come looking for help from me because I will turn them away.

I'm not so cruel as to say "I told you so," but I will say go away.

Thu, 02/25/2010 - 06:50 | Link to Comment 35Pete
35Pete's picture

I'm gonna tell them that they're an active participant in Darwinian Selection and who am I to interfere with mother nature.

Sorry. I'm so fed up with sheeple that I care no more about THEIR fate.

It's the folks that know whats up and are screwed anyways that I care about.

Thu, 02/25/2010 - 01:29 | Link to Comment macfly
macfly's picture

ditto that, everyone I know thinks I've fallen down a rabbit hole, and their eyes glaze over when I try to tell them what is going on. I guess I should also mention that I live and work in LA too!!

 

I feel so alone!! ;-)

 

So happy to see all the other insomniac worries here, I kind of view this as my own 12 step program.

 

Hello, my name is Fred, and I'm worried about the entire collapse of the global economy. I haven't had a drink in weeks, but I have some very nice '82 Cheval Blanc waiting on stand by.

Thu, 02/25/2010 - 01:48 | Link to Comment Anonymous
Thu, 02/25/2010 - 03:30 | Link to Comment malusDiaz
malusDiaz's picture

If you know whats happening... wtf are you doing in LA?

Wed, 02/24/2010 - 23:14 | Link to Comment Get_to_the_choppa
Get_to_the_choppa's picture

++

 

And I live in CA for cripes sake.  Not that I want to see riots in the streets when the checks stop coming to all those state workers and social dependents, but if it comes to that, so be it.  Let's just get on with it already. 

Thu, 02/25/2010 - 07:23 | Link to Comment 35Pete
35Pete's picture

There's a de facto rule here in the hinterland called the Kali Kook Rule.

It basically states that if you admit that you're from Kaliforinika then you have to prove to the vast majority of normal people that you're not wierd.

I think the problem that the Kalifornians here have is that they are not wierd (and you're in conformance with the rule too as demonstrated by your thoughtful and deliberate communications in this site) Which is wierd for your run of the mill Kalikook neighbors. They have a serious issue with reality.

Now there are a lot of delusional folks here in flyover country, true dat. But you'll have more success talking with us then you will with the psychological aberrations you call your neighbors.

Might I suggest that you emigrate? Why the hell would you want to live there anyways?

Come to flyover country. It's the Israel, the promised land for rationale, non-kooky salt of the earth folks.

We have one rule though. NO Cadillac Escalades.

Wed, 02/24/2010 - 22:20 | Link to Comment deadhead
deadhead's picture

Thanks for posting this TD...wow, the hits just keep on coming.

Thank goodness we New Yorkers don't have to worry about this stuff because we are in such good financial shape after many years of low taxes, strict financial discipline, and keeping NY budgets very, very low.   Phew.....

 

Wed, 02/24/2010 - 22:55 | Link to Comment john_connor
john_connor's picture

We would really be in the crapper if states like Illinois and Arizona were in trouble.  Thankfully those two are on solid footing.

Wed, 02/24/2010 - 23:19 | Link to Comment deadhead
deadhead's picture

ya know, from what I read, i'm wondering if Illinois is really the number 2 contender to Cali....i don't follow Illinois locally so to speak, but I often catch nasty articles about them.  anyways, it's amazing just how many states as well as some municipalities are so close to the edge.

Wed, 02/24/2010 - 23:36 | Link to Comment seadragonconquerer
seadragonconquerer's picture

Yes...trillions in debt at the national level, billions at the state level, millions at county and city level, and individual consumers in so far over their head - or unemployed - that many here - in formerly wealthy Santa Barbara - have pretty much stopped buying anything but absolute necessities, thus wiping out small business and sales tax revenues. Doesn't matter much whether Calif. floats more bonds or not; the water is now coming in faster than gov't can bail.   

Thu, 02/25/2010 - 05:56 | Link to Comment carbonmutant
carbonmutant's picture

Yea them and New Jersey...

Wed, 02/24/2010 - 22:23 | Link to Comment dark pools of soros
dark pools of soros's picture

but houses in San Jose are still a Million!!!!  no problems in sight!!!

Wed, 02/24/2010 - 22:47 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

"but houses in San Jose are still a Million!!!!"

Which just goes to prove there's a sucker born every minute.

Me, me, me. Pick me.

Thu, 07/14/2011 - 08:29 | Link to Comment pams
pams's picture

it is a huge amount... I am sure that you can use the money in other domain. Here seems to be useless. Geneva transfers

Wed, 02/24/2010 - 22:41 | Link to Comment Going Down
Going Down's picture

 

But Wait...Here's A Black Turkey

 

Feb. 25 (Bloomberg) -- Investors are betting political turmoil will weaken Turkey’s lira more than any other currency as the arrest of more than 40 army officers over an alleged coup plot raises tension between the government and the military.

One-month put options that grant the right to sell the lira against the dollar have surged to a 3.4 percentage-point premium over equivalent call options to buy the currency. The gap, known as the risk-reversal rate, widened from 2.25 percentage points a week ago and is the highest of 48 currencies on Bloomberg.

 

http://www.bloomberg.com/apps/news?pid=20601087&sid=aJeqR.xzcjxM&pos=7

 

Thu, 02/25/2010 - 00:49 | Link to Comment faustian bargain
faustian bargain's picture

oooh...coup plot in Turkey! Nigeria is a trendsetter.

This world is getting scarier by the minute. I hear and read the news stories these days and I think back to history class learning about the starts of the World Wars. I'm starting to feel like the world has become a tinderbox.

Or maybe I'm just paying more attention than I used to...? Is it just me? Or are things really getting that much worse?

Thu, 02/25/2010 - 01:39 | Link to Comment Quantum Nucleonics
Quantum Nucleonics's picture

Don't read anything into coup chatter in Turkey.  There has always been a delicate balance between Turkey's military which sees itself as a defender of a secular governmental structure and civilian political elements that want to incorporate more Islamic religious elements into Turkey's governmental institutions.  This looks like a win for both sides - the government looks stronger for having taken down some military coup plotters and the military gets rid of some too radical ex-military types that are trying to form a power base outside the military org chart.

Wed, 02/24/2010 - 22:43 | Link to Comment johnnyBoy
johnnyBoy's picture

But California has the weather (I know, a little El Nino going on right now but that will pass).  Calif needs to file BK because of dysfunctial legislature and civil service union contracts that need to be busted.  I hope after the BK that they also secede.  Might as well go all the way and become one hell of a great nation!

Wed, 02/24/2010 - 22:49 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

Who would've thought it wouldn't be an earthquake but Californians themselves that pushed the carcass into the sea.

Wed, 02/24/2010 - 23:34 | Link to Comment Tethys
Tethys's picture

Common misconception.  As most Californians know, when the big one hits it will be the rest of the continental US that slides off into the ocean.  

Why do you think real estate prices are so high along the Cali / Nevada border? Soon-to-be-beachfront, baby :)

Of course, most Californians also 'know' that (a) the US is the 'wealthiest nation in the world', and (b) the US is hopelessly and catastrophically in debt, so therefore (c) debt=wealth and thus (d) California needs much, much more debt.  

 

Thu, 02/25/2010 - 01:43 | Link to Comment Quantum Nucleonics
Quantum Nucleonics's picture

I think CA's treasurer actually looked into bankruptcy (not allowed - there's no legal basis in bankruptcy law for a state to file under) or secede and default, then rejoin the Union (which was considered too radical - that may change).

Thu, 02/25/2010 - 06:20 | Link to Comment Problem Is
Problem Is's picture

"Calif needs to file BK because of dysfunctial legislature..."

California IS the Citibank of States TBTF.

The management is corrupt and incompetent, the structure is too dysfunctional to manage and the entire enterprise is insolvent.The only Citi thing missing from Cali is an idiot like Rubin standing around...

The Legislature thinks they are a junior Congress and pay themselves like it. Every one of them needs to be voted out. I vote against my incumbents every election.

Break it up

Fire the management, bust it up into two states... flip a coin... winner gets Issa... loser gets Pelosi...

Thu, 02/25/2010 - 12:54 | Link to Comment Anonymous
Wed, 02/24/2010 - 22:59 | Link to Comment Anonymous
Wed, 02/24/2010 - 23:02 | Link to Comment Anonymous
Wed, 02/24/2010 - 23:02 | Link to Comment Marley
Marley's picture

California dreaming, on such a winter's daaaay....

Wed, 02/24/2010 - 23:10 | Link to Comment Yes We Can. But...
Yes We Can. But Lets Not.'s picture

Yeah, yeah, yeah.  These coastal states are nutty.  When *Iowa* goes down, then I back up the truck at the Hormel plant in Austin, MN, and load up on SPAM.  Til then, I choose to remain in da Nile.

Fri, 07/15/2011 - 04:31 | Link to Comment pams
pams's picture

I will try to follow your tips... I am sure that I will have excellent results Educational games

Wed, 02/24/2010 - 23:19 | Link to Comment Anonymous
Thu, 02/25/2010 - 06:33 | Link to Comment colorfulbliss
colorfulbliss's picture

Let's see...hmmm... "left wing", "hollywood elite", "socialist", "utopia", "karl marx"....all these words used within a few short sentences. Leads me to believe you have drank a bit too much of the neo-con kool-aid.

 

Wake up before it's too late and add the other half of the evil into your rant....

Thu, 02/25/2010 - 09:02 | Link to Comment IBelieveInMagic
IBelieveInMagic's picture

+1000

Wed, 02/24/2010 - 23:22 | Link to Comment Anonymous
Wed, 02/24/2010 - 23:27 | Link to Comment Anonymous
Wed, 02/24/2010 - 23:33 | Link to Comment monopoly
monopoly's picture

You guys are really funny. Correct me if I am wrong but I think part of the problem is you pay a good cop 100,000 to protect then when he retires at 50 you pay him 70,000 as his pension + health. Then you hire a new guy, say at 35,000. Now you are paying twice for the same cop. Am I the only one who sees the geometrical equation here. And just take any other state worker. They have great contracts, legal and all but....the state cannot afford them. My gosh, this is all going to end so badly. Got my cave ready here in Northern Nevada.

Thu, 02/25/2010 - 01:51 | Link to Comment macfly
macfly's picture

The cops deserve a good wage, they have a hard job here in CA with guns, crack, angel dust, and meth addled madmen and zombies on the loose.

 

The real problem is in Sacramento. They are up to all sorts of bad mischief there, fleecing the system in so many ways. One cute little scam they have going is banking huge bucks on student loan defaults. The Edu Dept has a whole office of scamsters on $400+k a year giving out loans to folks with no hope of ever paying them back, even their imaginary friends, then defaulting them.  They then collect big on insurance from the Feds who underwrite the loans. Talk about rinse, wash, repeat! The stench of rotting in Sacramento is bad.

 

We need a real clean sweep and a fully transparent, honest state government we can trust. Fingers crossed that maybe enough of the dirt will come out in the default to give us an honest, competent state government.

Thu, 02/25/2010 - 04:22 | Link to Comment jeff montanye
jeff montanye's picture

sounds like your (our) real problem is criminalizing recreational drugs.

Wed, 02/24/2010 - 23:37 | Link to Comment Anonymous
Thu, 02/25/2010 - 00:13 | Link to Comment Al Gorerhythm
Al Gorerhythm's picture

UH OH!

Thu, 02/25/2010 - 00:14 | Link to Comment dumpster
dumpster's picture

  yep the economy is on the cusp of a new beginning , dollar strong , beernike is in control , the fed has saved the world from falling off a cliff.. with nountains of new debt ,,,

Thu, 02/25/2010 - 00:15 | Link to Comment TJW
TJW's picture

With a little help from my ouija board, my crystal ball, and my cat helping me type out my ideas, I've figured out the solution to all this, for the US at least. And here's the beautiful part of it -- we get the geniuses on Wall Street to implement it for us (yeah, they're corrupt, probably sociopaths, but they know how to get money out of other people and screw up economies).

NB: My cat tells me this is immoral, but what does she know?

We need to, behind the scenes, undermine the economies of other countries; foment internal unrest. We also need to increase tensions between countries. Greece, with the EU on its side, and Turkey, with control of the Bosporus and Dardanelles, come to mind. When the governments decide to go to war, to pull together the citizens, who are on the verge of overthrowing the politicians, we pump up our munitions manufacturing sector BIG TIME. Then we sell weapons to both sides. If it ends up Russia and Turkey on one side, and the EU on the other, we'll make a fortune!

We have to be sure that we don't get involved in battle; that's not only messy, it's expensive. Just stand morally (?!) above it as other major nations get sucked in. And we need to get paid for our munitions up front in something of value -- gold, silver, whatever. That way, when one side "wins," it won't refuse to pay for the debts of the defeated. We'll already be paid.

If we can stand aside, when it's all over it will be like after WWII: The US will be the only large, developed country standing.

We just have to be careful about a repeat of the Marshall Plan. Don't want to rebuild competitors too soon.

Thu, 02/25/2010 - 00:27 | Link to Comment Yes We Can. But...
Yes We Can. But Lets Not.'s picture

Are you Dick Cheney?

Thu, 02/25/2010 - 00:36 | Link to Comment TJW
TJW's picture

My cuddle bunny.

Where the hell's that puking emoticon?

Thu, 02/25/2010 - 01:05 | Link to Comment Hephasteus
Hephasteus's picture

This is the plan we've been doing since world war II. It's not working

Thu, 02/25/2010 - 03:59 | Link to Comment merehuman
merehuman's picture

perhaps thats the plan in motion and

...WE are the patsy? China thinks long term and we dont think beyond the end of our dicks.

Thats why we keep stepping on it!

Thu, 02/25/2010 - 07:38 | Link to Comment Anonymous
Thu, 02/25/2010 - 00:57 | Link to Comment albion402
albion402's picture

Send the Lt. Governor-in waiting off to DC to plead the case.

Thu, 02/25/2010 - 01:15 | Link to Comment Anonymous
Thu, 02/25/2010 - 06:36 | Link to Comment Problem Is
Problem Is's picture

"Who do I blame......JEW BANKERS."

Note to Uncle Jamie and Aunt Lloyd:

If you dislike the ethnic stereotypes... try not acting like the ethnic stereotypes...

Attached are some PR ideas to get out in front of that nasty ol' banker pogrom.

Much love, your nephew Timmay G.

PS: Bennie Bernak-ster says Hi!

Thu, 02/25/2010 - 01:50 | Link to Comment Anonymous
Thu, 02/25/2010 - 02:54 | Link to Comment Anonymous
Thu, 02/25/2010 - 03:00 | Link to Comment irieblue
irieblue's picture

nice try, but under federal bankruptcy laws, a state can not declare bankruptcy.

http://latimesblogs.latimes.com/california-politics/2010/02/fiorina-sugg...

Thu, 02/25/2010 - 04:28 | Link to Comment jeff montanye
jeff montanye's picture

didn't there used to be a law or something against holding american citizens forever without charges or representation while torturing them?  or assassinating them anywhere in the world?  apparently laws can be changed.

Thu, 02/25/2010 - 08:30 | Link to Comment MarketTruth
MarketTruth's picture

Shhh, don't wake the sheeple as they have to be fleeced today on the Stock Exchange to keep Goldman Sachs and JP Morgan sending money to the Rothschilds, Rockefellers, Warburgs, Morgans, etc. Only he truly stupid still believe i GLD, SLV and other paper ETFs while the Rothschilds, Rockefellers, Warburgs, Morgans, etc hold actual physical gold and silver.

Remember: J6P American is really not that smart, with about 30% are not graduating High School nowadays even though the USA has drastically dumbed down the basic standardization test! Last thing the world needs is people who can actually critically think for themselves, as America needs stupid drone bees for their military.

Thu, 02/25/2010 - 03:11 | Link to Comment Anonymous
Thu, 02/25/2010 - 03:23 | Link to Comment vainamoinen
vainamoinen's picture

Uh-oh - - - -

 

Leaving for 3 week vacation to Istanbul this Sunday - - - - - ???????

Thu, 02/25/2010 - 05:23 | Link to Comment Anonymous
Thu, 02/25/2010 - 06:09 | Link to Comment Anonymous
Thu, 02/25/2010 - 06:38 | Link to Comment JimboJammer
JimboJammer's picture

Too  many  people ,   not  enough  jobs ...  

Too  many  Government   programs...

at  least  6  other  states   are  next  in  line...

Thu, 02/25/2010 - 11:15 | Link to Comment Anonymous
Thu, 02/25/2010 - 11:20 | Link to Comment Anonymous
Thu, 02/25/2010 - 12:36 | Link to Comment Anonymous
Thu, 02/25/2010 - 13:24 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

popcorn!

Thu, 02/25/2010 - 13:42 | Link to Comment Anonymous
Thu, 02/25/2010 - 19:32 | Link to Comment Rusty_Shackleford
Rusty_Shackleford's picture

How's this idea for debt reduction?

 

California Assembly passes resolution for 'Cuss Free Week'

 

http://www.mercurynews.com/breaking-news/ci_14470454

Fri, 02/26/2010 - 12:17 | Link to Comment Anonymous
Sat, 04/17/2010 - 09:49 | Link to Comment Tom123456
Tom123456's picture

Good Linux hosting option package offered by ucvhost which not only provides the best in terms of hosting packages but also believes in truly being there for the customer, 24x7. cheap vps Moreover , they offer unlimited bandwidth as well as nearly 1GB storage along with database maintenance, email facility along with storage, availability of sub domain and many other important features for a very low price. ucvhost thanks

Wed, 05/25/2011 - 17:12 | Link to Comment sun1
sun1's picture

you give so many great tips especially since I use word press and the plug-in section of your blog is great. some of the tips i get here I can’t find anywhere else. health administration

Fri, 06/17/2011 - 20:23 | Link to Comment sun
sun's picture

Dude, the Star Wars is cracking me up. Thanks for the great post, these are my fav so far. xbox 360 slim

Fri, 06/24/2011 - 06:22 | Link to Comment kevin22
kevin22's picture

rajasthan tour packages has been successfully handling groups and individual travellers from Europe & the USA for last more than ten years, with the help of a well co-coordinated network of experienced associate offices throughout India & abroad.

Sun, 06/26/2011 - 10:30 | Link to Comment sun
sun's picture

I found lots of interesting information here. The post was professionally written and I feel like the author has extensive knowledge in the subject. Keep it that way sports degrees

Mon, 07/11/2011 - 15:03 | Link to Comment hama
hama's picture

The post was professionally written and I feel like the author has extensive knowledge in the subject. Keep it that way
casino

Mon, 07/11/2011 - 15:12 | Link to Comment hama
hama's picture

The post was professionally written and I feel like the author has extensive knowledge in the subject.
www.casinoenligne777.com

Tue, 07/12/2011 - 10:55 | Link to Comment hama
hama's picture

China, and according to the record history, he could be the first pianist in China that offered a long term contract.
cheap car insurance

Wed, 07/13/2011 - 08:01 | Link to Comment hama
hama's picture

We are confident the SEC will aggressively pursue this line of questioning as they attempt to justify their $1 billion porn download budget. We are also confident, that should the SEC truly take its role of protectors of investor interest seriously.
cheap car insurance

Wed, 07/13/2011 - 18:31 | Link to Comment hama
hama's picture

En las Termópilas el rey Leónidas y su guardia de elite de 300 hoplitas espartanos se enfrentan a miles y miles de persas. La muerte es segura, pero el honor es eterno. Así arranca el relato épico del cómic de Frank Miller después de su exitosa Sin City.
Hybrid Cars

Fri, 07/15/2011 - 06:04 | Link to Comment hama
hama's picture

And there is nothing you can do about it. We have our modern day USSR: geitner, bernhake, blankfein, sumstein, orszag, summers, shapiro, feinberg, barovsky, axelrod,ram emmanuel, . Like Marx, Engels, Lenin, Molotov. Dont like it? they will stick you in a death-camp. This battle was lost in 1945. Thanks
same day payday loans online

Do NOT follow this link or you will be banned from the site!