SEC Destroys California

The Market Ticker ^ | 7.10.09 | Karl Denninger

[rvoitier]

Well now they've gone and done it:

"The staff of the SEC has expressed its belief that California's recently issued IOUs are 'securities' under federal securities law. As such, holders of these IOUs and those who may purchase them are protected by the provisions of the federal securities laws that prohibit fraud in the purchase or sale of securities," the agency said.

That was a mistake.

Here's why.

[P-Marlowe]

The SEC did not destroy California. California committed suicide.

[EagleUSA]

It is not at all difficult to see why this is happening.

The ELECTORAL VOTES of Taxifornia are critical to the Socialist Party.

[DCBryan1]

California was destroyed by liberals far before the SEC.

[troy McClure]

No The Democrats destroyed California by pandering to illegal aliens.

Deport them all now

[Dr.Syn]

If a state owes you a tax refund and does not pay it, can you withhold any future tax payments up to the amount that is owed plus interest...and penalties?

[tubebender]

Ping...

[TSgt]

California's new state bird.

[PittsburghAfterDark]

Without getting into the unnecessary “they did it to themselves” argument I really did wonder about these CA IOU’s.

If they were issued as 90 day type bearer bond notes with 3.75% interest how were they NOT subject to SEC regulation?

[Woebama]

I saw some previews on TV. I was excited to see it, it was a 1/2 hour program deal and I’d never seen Borat.

This Bruno stuff was boring. I stopped watching after about 5 minutes.

[Onelifetogive]

No The Democrats destroyed California by pandering to illegal aliens.

Deport them all now

Then let's get started doing something about the illegal aliens...

[ctdonath2]

...if you try to sell these "securities" for immediate cash.

CA has declared that selling their IOUs requires notarization of approved transfer from the original payee - practically prohibiting selling these "securities" for immediate cash.

The Soviet Union's last straw was inability to pay obligations. These IOUs are effectively non-transferrable low-interest high-risk securities - an obfuscated way of saying CA isn't paying obligations.

[ctdonath2]

They won’t cower and submit.
They’ll rally for Aztlan.
Ya ready to take on 10,000,000 CA residents declaring state independence?

[FreedomNotSafety]

Now all that remains is for Treasurerury or the Fed to open a facility to back the securities. Presto, chango, allakazham, you have solved the crisis. We are witnessing the birth of a new currency.

[libstripper]

If a state owes you a tax refund and does not pay it, can you withhold any future tax payments up to the amount that is owed plus interest...and penalties?

Maybe not interest and penalties, but possibly the principal. The Federal Govenment allows taxpayers to offset refunds against future payments of estimated tax. If a state, like California, allows such offsets, then that would be a good way to collect an unpaid refund.

[bestintxas]

Another reason why Texas must undertake its right under Union entry and secede from the mess that is now the USA

[Lurker]

The man is quite correct.

[FreedomNotSafety]

Now all that remains is for Treasurerury or the Fed to open a facility to back the securities. Presto, chango, allakazham, you have solved the crisis. We are witnessing the birth of a new currency.

[Grampa Dave]

Yes.

[TChris]

We are witnessing the birth of a new currency.

Yeah, never mind that pesky Constitution.

I shudder to think what consequences all this Alinskyite destruction will bring.