Right Thinking From The Left Coast
Reality is merely an illusion, albeit a very persistent one. - Albert Einstein


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California Hopes for Some Change

Unfortunately, the physical landscape of California is not the only thing going up in flames right now.  First, one of Canada’s trading exchanges sent out this delightful notice: (via Zerohedge)

Please be advised that there has been an unforeseen delay in renewing CDCC’s annual application with the State of California.

Due to this delay, CDCC options may not at this time and until further notice be sold or offered for sale in the state of California and to California residents until the annual application process is completed.

I’m no financial expert, but I’m pretty sure that’s trader-ese for “You’re broke, chumps--don’t call us, we’ll call you!”

And just to add injury to insult, the state needs a loan to pay their IOUs:

California State Treasurer Bill Lockyer announced that the banking giant is lending the state $1.5 billion to help it pay off IOUs.

The terms are very favorable to California, as the loan carries a 3 percent annual interest rate, lower than the 3.75 percent rate the state is paying on the IOUs. Also, Chase is not charging any fees.

How magnanimous of them!  But that’s not the best part:

The JP Morgan Chase loan matures on October 5, but Treasurer spokesman Tom Dresslar tells me the state hopes to pay it back before then. The Treasurer will begin selling short term revenue notes into the market, possibly by mid-September, and will use some of that money to repay the bank.

Get that?  One of Canada’s largest traders has “delayed” doing business with California or its residents (no doubt one of many to come), and now the state needs a loan from one of Bernanke’s bank brothel madams to cover the financial obligations that it couldn’t cover this summer.  A loan that it hopes to pay back.

This is what it’s like to watch a state slowly circle the drain financially. 

Posted by on 09/01/09 at 08:51 PM in Cullyforneah Politics Law, & Economics Those Wacky Canadians • Permalink

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