These people are mad. No, not ” I’m pissed off mad”, but loony. On the other hand, I’m mad. Yes, the pissed of mad. Some SEC clowns are proposing the IOUs that California is issuing, be treated as securities and become regulated. I wonder why that would be? Hmmm, I wonder if the big banks are pushing for some federal government insurance for payment of the IOUs they have received. In an AP story today it’s reported
“JPMorgan Chase & Co., Bank of America Corp., Wells Fargo and Citigroup Inc. and some regional banks in the state saying they won’t accept the IOUs for payment after Friday, attention has turned to the possibility of a secondary market to buy up the notes”
Well, the banks don’t want to get stiffed for the IOUs they have already accepted. If there’s a mechanism put in place by the federal government (your tax dollars) to allow these IOU to become securitized and traded on the open market, then some recourse would be in place for some payment, maybe at a loss or a gain.
“The Securities and Exchange Commission is going to recommend that the IOUs, which carry an annual interest rate of 3.75 percent, be regulated by the Municipal Securities Rulemaking Board as a form of municipal debt..”
First, the federal government is the most inefficient and corrupt institution in America’s existence. Second, some of these banks are already in bed with our federal government having cozy deals served of up on a regular basis, at the taxpayers expense. Third, these banks and investors are looking for more bubbles to blow up ( or economies to blow up). This could be the next bubble, on top of the, soon to boom, carbon credit trading program. Once you get these two programs in full gear, then the “financial mad scientists” can figure out a way to slice, dice, bundle, and unload them and, then laugh all the way to the bank. Lastly, as stated on an earlier blog from The Liberty Journal, I don’t want to pay for California’s incompetence.
This is merely an “end around” play for a part of the federal government’s (taxpayer sponsored) “Bailout Bucks Bonanza”. This only legitimizes something that should not be allowed. Bailing out bi-polar-acting state governments, who can’t spend within their means, is a losing proposition. It’s just a continuation of the “fed loser program” and it will get much worse if we keep letting the federal government remain unrepresentative and corrupt.