Posted on 07/11/2009 10:06:55 AM PDT by Crimson Elephant
California Governor Arnold Schwarzenegger announced that his state will not participate in the year 2010, and instead “will skip directly to 2011.” California faces a projected $26.3 billion budget deficit, and the state’s controller began handing out IOUs last week....
(Excerpt) Read more at thenationalprotrusion.com ...
LoL!
Heard from by bro today that Wells Fargo and BofA has stopped accepting IOUs from Cali. The u know what is about to hit the fan. If you think the Chinese upheaval is bad, just wait until 10 million illegals can’t cash their Cali welfare checks.
I bet the fine print says that you will have to pay in 2011 the taxes you missed paying in 2010.
Glad I am on the east coast if things go belly up on that front. Maybe some of them will get the hint and go home. More likely they will spread to other states.
Only contractors and those who overpaid their income (and corporate?) taxes are given IOUs. Welfare recipients, Medi-Cal people, and those others feeding from the public trough are still given cold, hard cash. This reflects the fact that tax producers are always given the shaft in California, while tax consumers are coddled and given priority in every respect.
The banks will be replaced by the 1% cash checking outlets in the downtown core and all over L.A. That’s what a good number of mexicans do and know a few who do it.
One thing you will never from politicians in California. “Why is the deficit so large?” Break it down for the people as to exactly why. If they don’t do that, they are just lying to the people. Tell the people what the intake is and then tell them where they spent it and how much they over spent and where.
Adiosi Pelosi!
Wax on Waxman Off!
Feinstein the Beer Stein's empty!
Boxer is out Skivvies In!
About those IOUs...Karl Denninger at market-ticker points to the big problem...http://market-ticker.denninger.net/
“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.
If you performed work or were otherwise owed money by the State of California (e.g. you are owed a tax refund) you’re owed money, not a bond.
What the SEC has just done is equivalent to declaring that you were not paid at all.
You did not agree to accept payment-in-kind, therefore, absent agreement you cannot be compelled to accept this bargain.
Therefore, if you are owed a tax refund, you still are.
If you invoiced the state, it remains outstanding.
I predict that the line in front of the courthouse is going to get very long, very fast, and furthermore, if you’re a vendor to California, you better quit shipping - now - before you wind up taking a forced haircut.
3.75% is nowhere near a reasonable interest rate for an insolvent institution, nor are you likely to appreciate the discount if you try to sell these “securities” for immediate cash.”
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