...and pay and pay and pay. Thank you Governor Grayout Davis.
State tax revenue will be used to pay off these bonds so that people who insist that they be allowed to consume energy at less than the market price may continue to do so.
NOT EXPECTED is a far cry from WON'T.
So, we're paying higher electricity bills and we'll be paying off this bond until our kids have kids of their own. For me, these bonds will still be around when I'll be thinking about retirement. My youngest will be in his 30s.
Thanks, Gray Davis! I've got a 30-year mortgage, but at the end I'll still have a house. I have a 30-year bond debt on electricity I used once in 2001 because of your gross incompetence to run the state of California.
DUMP DAVIS!
During Carter's disastrous presidency, and there was more than one disaster then, some of actually his own doing, bond rates were high and so was inflation. Those who had the scratch at that time could get 20%. What's more the 20% continued even after Carter was gone and the economy returned to sanity. And the trade price for the bond almost doubled overnight. Win-win.
If a person buys some of these California power bonds now, he will lock in 6% or so, whatever the interest rate turns out to be at initial offering. If the interest rates inrease, bond prices will decrease just enough to make an effective interest rate in spite of the face value. Which is to say, as interest rates rise, and this will happen, not only will you lock in your 6%, but your bonds will bring you less if you sell them. Lose-lose.
So, much as I relish the idea of someone paying his utility bill and some taxes too for the next 30 years to support me in my dotage, the bonds don't look all so attractive.
Institutions will snap them up, of course.
And in this investment climate, what kind of an idiot would even think of this as an investment?
Even at a guaranteed 20% return, I will pass, thank you.
Yes I have lived all my life (so far) in California...
For a state perhaps...
If an individual did it he would universally be condemned as criminally irresponsible and certain candidate for imminent bankrupcy.
One does not cover current expenses with long term obligations. Ever.
Economics for Idiots 101
Not ever.