Bank of America to accept California state IOUs

Market Watch ^ | Jul 1, 2009 | Michael Kitchen

[optiguy]

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

More of the "Chicago Way". My guess is Obama used the same kind of threats he used when they bought Merrill-Lynch. I think they're headquarters are in Charlotte, N.C.

[dragnet2]

lol...who is supposed to be getting these IOUs? And For what?

I really hope it’s state government vendors.

[optiguy]

headquarters = headquartered

[magellan]

The United States Constitution:

Article I - Section 10 - Powers prohibited of States

"No State shall ... coin Money; emit Bills of Credit ... "

From http://www.usconstitution.net/const.html footnotes:

Bill of Credit: A bill of credit is some sort of paper medium by which value is exchanged between the government and individuals. Money is a bill of credit, but a bill of credit need not be money. An interest-bearing certificate that was issued by Missouri, and usable in the payment of taxes, was thus ruled to be an unconstitutional bill of credit.

Remember when the Constitution meant something?

[optiguy]

Upon further reflection, I’m an idiot. they’re = their

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45 posted on Wednesday, July 01, 2009 12:41:31 PM by Jim Robinson (Follow me on Twitter: http://twitter.com/jimrobfr)

[Cyber Liberty]

So, the marketplace is moving off the fiat cash all on it’s own? I understand Scrip was the coin of the whelm during the depression, and we’re moving to that now.

[dragnet2]

"Bank of America recognizes the State of California budget crisis will impact our clients and customers,"

I assume the IOUs are for people/companies doing business with the state government..

Seems to me they deserve everything they get for doing business with a corrupt criminal entity, that aids and abets illegal aliens, while forcing the legitimate working men and women to pay for it.

[taxtruth]

What assets?American’s got tricked into a fiat paper thinking it was money.History proves a different story.Stay with a redeemable commodity.Andrew Jackson really hit the nail on the head.

[Oldexpat]

If their regulator accepts these assets..meaning the Treasury, Fed and FDIC..then BOA can do it. So it has the backing on the USG. No surprise here, but it just passes from one bad balance sheet to another..State..Bank..USG.

[Oldexpat]

This was probably another decision that BOA made with a gun to their head.

[Oldexpat]

I must add that when I did business in the Philippines with Marco running the show..BOA was required by him to finance certain companies owned by his cronies as the cost of doing business in the PI. They did the loans and Marcos signed for the RP..obligating the govt to guarantee. Sound familiar?

[cranked]

Does the BoA alos accept Monopoly money?

[taxtruth]

Yep,that’s why wall street crashed and the bankers are trying to get the big train on the tracks again,and do it all over.Bankers love this game.Money for NOTHING.

[oldteen]

[from existing customers and clients]

And what about those who are not customers of BofA??

[Dilbert San Diego]

And like anything in the Constitution, someone would have to file a lawsuit if they feel something clearly unlawful was happening.

If nobody files a lawsuit about this, nothing will happen.

I would be wary if the state of Calif. owed me money. If you “deposit” it in the bank, if Calif. doesn’t at some point pay back the bank, then the bank is simply going to debit all of their customer’s accounts back for these IOUs.

Also, why is Calif. issuing IOUs? I know they don’t have a budget, but, they are still collecting sales tax and gas taxes, still collecting withheld taxes from employee’s paychecks. They still have money coming in. If they are trying to say that without a budget they can’t spend any money, then how can they legally be collecting money without a budget?

[Right Wing Assault]

You’re right about Charlotte. I know it was founded in SF but I guess they moved about 10 years ago.

[DoughtyOne]

My state is so screwed up. It’s sad to see really, but I do think it’s funny in a macabre sort of way.

Where’s Larry, Moe, and Curly when you really need good governance?

[Pearls Before Swine]

They will 40% interest until they get real money.

That's an interesting comment... I wonder what the going interest rate on California IOUs will be. It's not like they're rated securities, is it?

[BP2]

Yeah, makes you wonder who paid SEVEN percent (7.00%) Tuesday night, when all other banks are borrowing at less than ONE-HALF of a percent (0.50%) ... another troubled bank or a cash-strapped state?

New York Fed

|

Federal Funds Data

	date	daily1 [XML]	Range		std. dev. [XML]	target rate2 [XML]
			low  [XML]	high [XML]
								daily
	07/01*	0.20	0.10	3/8	0.04	0.00 - 0.25
	06/30	0.22	0.01	- 7 -	0.56	0.00 - 0.25
	06/29	0.17	0.05	3/8	0.05	0.00 - 0.25
	06/26	0.18	0.05	3/8	0.04	0.00 - 0.25
	06/25	0.19	0.05	3/8	0.05	0.00 - 0.25
	06/24	0.21	0.10	1/2	0.05	0.00 - 0.25
	06/23	0.24	0.10	3/8	0.04	0.00 - 0.25
	06/22	0.24	0.10	0.38	0.04	0.00 - 0.25
	06/19	0.25	0.10	0.40	0.03	0.00 - 0.25
	06/18	0.25	0.05	3/8	0.04	0.00 - 0.25
	06/17*	0.24	1/8	3/8	0.03	0.00 - 0.25
	06/16	0.22	0.10	3/8	0.05	0.00 - 0.25
	06/15	0.22	1/8	3/8	0.05	0.00 - 0.25