California IOUs

Pasted below URL (yeah I know it's Yahoo! but just grabbing it from the first site I hit, sorry) to article regarding SEC recommendation to treat CA IOUs as securities.

http://finance.yahoo.com/news/SEC-to-call-for-Calif-IOUs-apf-3256311581....

So, a couple of thoughts/rants.

First, here is the thanks that various TARP recipients (who should've been allowed to fail like an insolvent individual would be) extend to CA citizens receiving IOUs whose federal tax dollars allow 3 of the banks mentioned to still be alive (barely).  "Thanks for the bailout.  Fuck you!"

Second, the SEC, as "protectors" of investors recommends these be treated as securities so holders of IOUs can receive a "fair price."  Seriously?  CA is on negative credit watch with an issuer rating of one notch above junk status.  So, Cali small businessman does contracted work for the state at an agreed upon price of say, $10,000.  Under the SEC's plan, will he get the agreed upon price for his services under the SECs plan?  Nope.  Thanks for watching my back SEC.

Third, under this cockamamie plan, will the Cali small businessman, family, whatever be able to deal directly with this secondary market?  You can bet your bottom dollar that the answer to that will be no.  He'll have to go through a securities dealer who will charge him a commission.

It's so nice to be consistently reminded how the Feds and bankers/securities industry are continuing to look out for each other.