Bank of America to accept California state IOUs

Market Watch ^ | Jul 1, 2009 | Michael Kitchen

[Lorianne]

LOS ANGELES (MarketWatch) -- Bank of America said Wednesday it would accept warrants issued by the California government on a limited basis through July 10, which the state is using as a budget crisis freezes its spending.

"Bank of America recognizes the State of California budget crisis will impact our clients and customers," it said. "To support our customers, while giving the state legislature additional time to pass a budget, we will accept California state-registered warrants -- or IOUs -- from existing customers and clients

[Lorianne]

Defacto bail out of California since BOA has access to the (perhaps unlimited) TARP funds.

[razorback-bert]

They will 40% interest until they get real money.

[TruthConquers]

So, does the federal government accept these, IOU’s?

What a mess.

[2banana]

The backdoor way for the Obama Administration to bail out California...!

[EGPWS]

Can't believe after all the spending cuts mandated that California is STILL broke. /s

[YankeeReb]

Lets see I’m unemployed. Do you think the government will take an IOU in place of money for the taxes I owe? I didn’t think so. :-{

[taxtruth]

Our whole money system is based on IOU’s.America is BROKE.The Founders warned us.

[elkfersupper]

If only California had imploded a decade or so ago, I could still smoke in NM's rural bars and restaurants.

Too bad, but I will applaud the implosion anyway.

[Frantzie]

BOA also dearly loves illegal aliens and has for years.BOA also is great at outsourcing jobs to india.

[ThomasThomas]

Bank of America did this last time the state issued IOU’s.

[DoughtyOne]

Good fricken grief, and it’s my stinkin state.

[sickoflibs]

LOL

California follows washington and creates its own currency. I love it!

[LibertarianInExile]

Worthless paper for more worthless paper. And somehow the dollar still doesn’t fall against the yen and yuan. Let nobody say that the Japanese, Chinese and their tiger pals are manipulating currency, however. They’re friendly. /sarc

[ikka]

They will put them on their books at 100% of face value as “assets”.

[KoRn]

An insolvent bank accepts IOUs from an insolvent state.

Makes perfect sense to me!

[Right Wing Assault]

Will they take an IOU for my mortgage payment? Do they trust CA politicians more than they trust me?

I guess since their HQ is in CA, maybe that helps.

[taxtruth]

LOL!That statement made my night.

[dragnet2]

An insolvent bank accepts IOUs from an insolvent state.

LOL!

[PGR88]

NOW people are only starting to consider the possibility - these IOU’s are NOT money! They are unsecured debt, never seen before, from a Government this is effectively bankrupt.

This could start sliding downhill with increasing speed.

[STONEWALLS]

....but some people will need their money. I expect a market will spring up in discounted IOUs and people will sell for spot cash.