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Lockyer Pulls The MAD Card: California Treasurer Says Taxpayers Would Be Harmed Unless BAB Program Is Extended
Now that it appears that the Build America Bond program may end up being pulled in just two short weeks, those who are most reliant on the program for their continued existence are starting to not only crawl out of the woodwork, and make their voices heard, but pull the usual trick of threatening with cataclysms unless they get what they want. Sure enough, enter California Treasurer Bill Lockyer. Per Bloomberg" “Allowing the BABs program to die would undermine the economic recovery and harm taxpayers and working families across the country,” Tom Dresslar, spokesman for California Treasurer Bill Lockyer, said yesterday by telephone. And the justification: taxpayer cocaine is the best damn cocaine money can buy: “I know that stimulus has become a dirty word but you’d be hard-pressed to find an economic recovery program that has worked better.” And that is all that is needed to convince the masses of corrupt politicians: after all as Neel Kashkari made it all too clear both 2 years ago, the world will end unless bankers or their administratively placed cronies get anything they need to maintain the ponzi on their behalf. And lastly let's not forget that the biggest beneficiary of the BAB program is none other than PIMCO...which is incidentally where Kashkari gets his paycheck currently.
More from Bloomberg:
The U.S. Senate kept a continuation of the Build America Bond program out of a bill to extend income-tax cuts made in 2001 and 2003, according to a draft of the legislation.
The federal subsidy for debt to finance bridges, roads and other infrastructure wasn’t among changes made to win support for the measure, the text released last night shows. The subsidy pays 35 percent of the interest on qualified state and local government bonds. At least nine Democrats sought to attach an extension of the program, which ends Dec. 31, to the tax bill.
The failure is the latest in efforts to keep the Build America program going for at least another year. The prospect of its end has weighed on the $2.86 trillion municipal bond market as public officials have rushed to borrow money at subsidized rates and as investors expressed concern that traditional tax- exempt debt issuance may surge next year.
Of course, at some point, someone, somewhere will need to take the first austerity pill. And we are firmly convinced it will not be California whose massive insolvency will come to a prompt head the second it becomes clear a brand new multi-billion taxpayer gift is not in the cards for 2011.
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Liars, thieves and crooks, that's all they are. Bought and paid for with freshly printed money, while the money you earn through working gets devalued by the day.
Greedy, deperate, lying thieves. Stealing from the poor to give to the rich. America today is the un-Robin Hood.
http://unconstitutional.blogspot.com
I am driving around and seeing all this public construction and scratching my head. I guess now I know what's up with the latest episode of the Ponzi.
Oh, you didn't see the fine print on the sign?
*sponsored by the Federal Reserve and myopic politicians by using the American credit card the taxpayer and future generations of America will have to pay off at 20% interest.
http://unconstitutional.blogspot.com
lockyer is the biggest pc of shit we have second only to failure villaragosa. i ve been directly calling this fat turd's offices for 2 yrs now about cdr financials' muni bond bid-rigging and last yrs' pure RICO 28% fitch lubbed dwp rate hikes less they downgrade la dwp bonds. kept asking him to cut out these fucks out of our state's bond market, why should we do business with thieves at one level (babs) if they're clearly stealing and have been busted at the another level (munis)? all this fellating shrek did was write some letters to the 6 MC's and they wrote some letters back and that was the end of it, no recourse or cooperation with cuomo or doj, this fat fuck needs to get hamstrung! fucking banker toilet seat! wendy gruel city controller should get this putrid fucks job ! last year the los angeles owned department of water and power's board stacked by fucking traitor sanctuary city asshole failure villaragosa, refused ! to give 80 million of the city's money to the city, unless the city council raised rates by 28%, backed by fitch and jpms downgrade calls. Lockyer did shit but fluff this bonds/banks/politicians circle-jerk cluster fuck! we know jpm at minimum was bidrigging in collusion with cdr financial! lockyer did shit! of course he wants the babs! fuck him! he deserves to be shot! lockyer deserves nothing but a sock stuffed deep in his fat fucking mouth! and bank hq's need to get firebombed! btw villaragosa stacked the board and they refused to give the money to protect the bonds so that THIS year asshole villaragosa could secure 30 billion in bonds and funding for a subway extension to the westside! a fucking subway! when we're broke and granny can't turn on the heat or the a/c!
When does it all just go full retard. A&P going bankrupt, TJ Maxx can't evenmake money. This is driving me insane. Someone please stop the madness. It is way past time to screw the banks. They haven't even given us a reach around
The Federal Reserve needs more debt slaves, Bitchez!!!
Refer to:
Didn't Michigan take the first austerity pill?
No, they've just plugged the holes in the budget with stimulus spending. Guvmint spending still has gone up in the past couple budgets.
Insolvent? But the Cali treasurer wrote a letter to the Squid, objecting to their Cali CDS sales, and said that they never had, and never will, default. I think he was 100% sure about that.
"oh thank God, the police!"
"and now, starting for the LA Lakers...6' 2", 6' 4" with the afro...
Is this only an impression, or the whole pyramid of cards is threating to collapse every day if the bailouts are not extended?
Yep every day its another threat of complete and total meltdown unless the damn money is handed over!
Bush tax cuts gone, BAB dead, China raising rates...oh also no DREAM ACT as promised so the hispanics will go nuts too...looks like the 'all is well coast is clear to extend bull(shit) rally' stuff is heading straight over the cliff.
there are so many threats these days, its difficult to tell which one is real...
no more original thinking - just copy cats; everyone is trying to pull a "paulson bazooka"
BAB's is dead I think, total republiclown opposition to it, and looks like tax cuts wont be extended either? Unless theres some kind of quick divine intervention, we're looking at serious pain comin real soon.
Happy Holidays.
Tax cuts will be extended. There's no way the Dems let everyone's rates rise on Jan 1, only to let the new Rep Congress come in and play white knight with a retroactive cut.
Also, I will be surprised if BABs don't somehow pull off at least a one year extension. Lockyer is warning that without an extension, Cali will face higher borrowing costs, which raises the likelihood of a default and a more expensive Fed bailout in the future. The boys in DC know this, which is why I think it will get done. Everything going on right now is just a big game of chicken.
Also, if you think BABs are bad at a 35% coupon subsidy, take a look at RZEDBs at 45% or QSCBs at 100%. I predict all of these will still be available come Jan 1.
No big deal. I'm sure Zimbabwe Ben has a few hundred billion to buy up the state/muni debt if they come ask him nice.
------------
I hate them all
Something for your ears: http://www.youtube.com/view_play_list?p=F79EBE9FB77C107C
and this suprises you how?
What's needed is for the Federal Reserve and Government to STOP interfering with free markets, a return to free market price equilibrium and a national savings' rate that approaches 10%+.
While this will be very bad for commod speculators, equity shysters and the tax man, and would also lead to economic pain for some time, it would set the table for true economic expansion and higher national wealth in the years to follow.
Less iWants, and more iNeeds.
It is a disgrace that many Americans believe that the only way American Students can excel is by by building elaborate and expensive structures and equipping them with the latest and greatest in technology, when asian nations blow all competition away with students taught in old structures, mostly unheated and without AC, many with nothing but rudimentary desks and chalkboards.
America has to be the most inefficient and wasteful expender of wealth in the history of the universe.
That the Government has become a GINORMOUS 12 HEADED TAXER & SPENDER DOES NOT HELP!
My eyes just glaze over every time I see a post that starts with, "What's needed is...", or "The way to solve this is...".
Wake up! Until the psychopaths running the place are gone there are NO solutions half-baked, fully baked, sane, or stupid that will matter to anyone. You can't inspire people to greatness when there are psycho financial terrorists holding a gun to their heads!
We have to get rid of the terrorists first. That's the first necessary part of any solution.
Start, I shall begin my posts with "Wake up!" henceforth, in your honor.
We essentially agree on the important stuff.
Get the central bank and government out of the way, and crush the Federal Reserve's epic monopoly which is nothing more complex than legal and massive transferring trillions from middle class Americans to the oligopoly.
Thats exactly what we need, the Gubment to go to hell and leave everyone alone...however the Gubment is now busy placing total control nooses around everyones neck to the extent of roving xray vans, threats of internet 1984, and monitors up in Walmart with Big'n'Ugly Sis Naploitano telling folks to turn in their neighbors.
Guess this means that you're NOT in favor of "the spies", or "the anti-sex league" -- where's a thought poiliceman when ya need'em??
The difference between American and non-American schools is sourced in the simple fact of actually putting a value on education. We have this concept of throwing money at students will somehow educate them into being the best at taking tests (which is not really relevant anyways). If parents actually followed the progress and stressed education to their children while forcing school to actually educate and not babysit, the problem is solved.
I apologize, that would take people away from the icrap and American Idol. Moving on......
The Ponzi bankers have run out of real 'customers' to defraud (individuals, companies, municipalities).
Individual states will unfold next, after that, the Fed.
Wanken Fucking Bankers !
I cannot possibly be concerned with the state of the the US economy because I just saw a big ass picture of Miley Cyrus toking on a big ass bong.
What a dope... With all her money you'd think she could find some private place to get high.
Ok now back to reality.......
Its amazing, she can put such big things in her mouth. I think I see how she got a-head.
Of course it was let go. Don't you see? Anything that does not funnel money directly to the banks isn't supported. Its so obvious! Its Worldwide Pandemic.
Who do you think is underwriting the deals? Who do you think serves as intermediary for the secondary transactions? Trust me, the banks are making plenty of jack on the BAB program.
All we need is to incur more Federal debt solely to pay INTEREST on behalf of state and local governments. I remember some time ago, there was an article here on ZH about the amount of California's budget involved funding through the BAB program. California made the CHOICE to make itself dependent on this program. Other states didn't. Now, they are faced with one fiscal crisis followed by another because of this poor choice!
After the tax tragedy that Obama announced earlier this week, the current year's budget will almost certainly reach a new record. The figure I've seen is around $1.75 trillion, including the debt consequential to this new tax accord. To put this into perspective:
Total federal 2010 individual income tax revenue: <$900 billion
Total federal 2010 payroll tax revenue: <$900 billion
So this year, we will borrow an amount nearly equal to the entire individual income tas base for the entire country! This is worse than unsustainable. We're borrowing about $1 for every dollar of taxes we take in! Cloward and Piven live! It's just what they've been calling for! It is a calamity in the making!
I am somewhat certain the U.S. Federal Government is spending $1.40 for every $1.00 it is taking in.
That was the figure I had also heard BEFORE this tax accord this week. But this tax agreement will add another $900 billion to the deficit over the next two years. If half that is added to this year's deficit, then it will baloon from about $1.3 trillion to about $1.75 trillion.
While gentlemen and economists can debate the exact figures, the point is still the same: We're headed for disaster much FASTER!
Despite the beneficial stimulative effects for economic growth, it will never return enough revenues to grow our way out of this catastrophe without substantive spending reductions. We're just digging ourselves into a deeper economic grave, I'm afraid.
Only $1.40?
You're thinking MUCH too small...
It's a sad reality that I have no doubt that the actual figure is much higher, also.
Mind if I call you "Snake?" :>D
I couldn't get the "save" function to work after I attempted to edit my above comment. It should have said, "...the current year's budget DEFICIT will almost certainly reach a new record." The last figure I saw for the entire budget was around $3.5 trillion. The DEFICIT -- by itself -- could now reach HALF that figure. It's ugly any way we slice and dice it! I'm convinced we can no longer merely grow our way out. We MUST slash the budget if we are to survive!
Well, welcome to the working week, Captain Obvious!
“Allowing the BABs program to die would undermine the economic recovery and harm taxpayers and working families across the country,”
Here we go again....."The Paulson card" clip, paste, publish....wash rinse repeat.
The threat of financial Armageddon end of the world like quality bestowed upon us for the quadrillionth. time. Better do as we tell you or else...
"O'er the Land of the sheeeeep and the home of the slaaaaaves!"
LMAO
Someone needs to ask them how not going farther into debt harms working families.
Now that would be a very legit question.
Using the PTB nitwit logic paradigm, they would probably argue that it would be the same as refusing this terminally ill patient trillions of $$ in medicine in order to prolong its' life with some HFT nanosecs.
Yes, we must spend our way out of debt.
Marc Faber got that one right:
"The Fed will print, print, print"
"It's the only thing Bernanke knows"
LMAO
"Will someone please think of the Children??" Soon, we'll have dogs and cats living together too! </sarc>
"you'd be hard pressed to find a better alternative"...
Hah! What a laugh. Default, malinvestment is repriced and you begin again- but put a restraint on credit and monetary expansion- you link it to actual savings and real value assets.
Oh wait, he must have meant better alternative for bankers. Sorry.
I volunteer @$$hkari to take the first austerity pill
The only way to show the PTB enough is enough is to take a page from the Gandhian philosopy. Just disconnect yourselves from the beast.
I plan to leave with whatever little I have to some other country and start fresh. Fuck this, the head aches...
I still don't get it. How is BAB's any different economically from regular tax-exempt issuance?
A municipality can issue at a tax-exempt rate of 4%, or a taxable rate of 6% (all numbers are estimates) with a 35% subsidy. Doesn't it work out to the same rate?
And the federal gov't either directly subsidizes the municipality by sending them the 35%, or indirectly by forgoing receipt of the taxes.
I must be missing something here, but I just don't see it.
In theory yes; in practice no. The spread between the two is tighter than the tax subsidy because the investor base is bigger for BABs (think foreign investors, pension funds, etc.) so demand pushes the rate down vs. subsidized tax-exempts. Lockyer's comments are all about maintaining access to lower financing costs...nothing more.
The FRN's are coming out of someone else's pocket(s) -- nothing more to this equation.
Well back when they held elections in California the budget gap was 18.5 billion. Since then they passed a budget that included 10 billion in borrowed money, So essentially they only accounted for 8.5 billion in real revenue adjustments. Now they are talking about a 29 BILLION DOLLAR shortfall. Opps we missed a few lines on the accounting sheets. California has been kicking the can now for 4 years and they are running out of can to kick. With the extension of unemployment benefits California will have to borrow another 10+++ billion just to meet the obligation so we might just as well call the hole 40 BILLION. Meanwhile the state focuses its energy on passing legislation to give more money and rights to illeagal citizens? The rest of the country needs to look through the other end of the telescope when observing the planet of California. What they will see is a condensed version of their own fate as the Government teet dries up. Total payback is coming for the Golden State for kicking the can until there is nothing left but tin dust. Companies like PIMPCO that have made billions prolonging the collapse of the Golden State are now about to feel some serious pain. How they have kept this ultimate bubble patched up for this long has been truely mind boggling to say the least.
Good points all! Except for one very small -- and I mean small -- item. We Californians were kicking the can down the road even before/when I was living there 7 years ago. Gray Davis was doing it even before Schwazengger; so California's fiscal lunacy has been going on for so long that I think it has become reflexive, perhaps even genetic.
they have a fwiend in Wome named Biggus....
In case anyone hasn't seen I.O.U.S.A., and if your blood pressure rose reading this article, take a baby aspirin and watch it this weekend.
Great movie. I need to watch it again. Thanks for the reminder.
Everyone (except you and me) can pull the MAD card right now: As I write this, the Corn Lobby is on CNBS saying how pulling Corn Subsidies would 'harm consumers and kill the recovery'.
The reason everyone can pull the MAD card out so easily? The secret is that everyone believes that this economy is so damn fragile and so not market-driven that turning off the money spigot even by a drop could kill the recovery and plunge us into armageddon.
Yep. Nothin more need be said.
The problem is if it collapses all the fraud will be exposed.
It's called "Check Mate"
Ok I am done turn back on the printing press.
California needs to lead the nation and not fleece the nation.
The (D) & (R) Terrorists have won.
California is playing a game of evolutionary game theory. You have the "sucker" strategy, the bleeding hearts who will keep giving more money no matter what. Those of you familair with your evolutionary theory know that in such a state, the "cheat" strategy will explode with those who leach off the suckers and provide nothing in return. The end result is that the suckers go extinct and the cheats soon follow.
Or in the natural world, known as 'parasitism.'
The parasite thrives and feeds, until the gracious host dies.
http://www.reason.tv/video/show/hasta-la-vista-arnold
go long muni's (or use muni's as your funding currency) and short treasuries. it's time to Break Bernank. everything he has said and done has been a "collossal failure of common sense." We'll see if it results in massive shooting war on the Korean Penninsula which results in the deaths of 10's of thousands of American GI's.
Don't be such a worry wart, Bill.....There's always QE3
new political speak:
"working families"="its for the children"
anytime you see these phrases you know a politician is lying, besides them just opening their mouths.
Your tax dollars building trains to nowhere in the future penal colony known as california
BABS is the heroin of the states. How dare you stop supplying it! They'll have to go cold Turkey.
Marketwatch just reported:
BREAKING NEWS! U.S. Fed Budget Deficit $150 billion. You do the ugly math!
Even with the goverment, banksters, and all the other "TPTB" out of the markets I don't think we end up with a "free market". Too many people are too focused on getting over on one another rather than the fair exchange of goods and services.
Wishing harm to evil doers everywhere.
(Mean, selfish, self-centered, self-absorbed, nasty, uncivil, overindulgents included.)
MUNICIDE
bitchez....LOL, this is way, way, way too funny.