SEC Says California IOUs Are Legal "Securities"

CNBC ^ | 7/9/2009 | Staff

[Red in Blue PA]

"IOUs" the state of California has issued instead of payments amid its budget crisis are "securities" under U.S. law and their holders and potential buyers are protected by anti-fraud law, federal regulators said on Thursday.

The determination comes amid efforts by some entrepreneurs to establish a secondary market for the IOUs, which the government of the most populous U.S. state began issuing last week to vendors and to taxpayers owed refunds to maintain dwindling cash for priority payments, including payments to its bondholders.

[yldstrk]

and if the SEC says it it must be so

after all the esteemed felon Bernie Madoff used to be the head of the SEC

[taxtruth]

Soon they will tell us sea shells are legal tender.

[cranked]

Their risk weight alone makes them a severe liability.

[Man50D]

Oh good, I’ll write out IOU’s instead of paying cash.

[nina0113]

So were Confederate dollars.

[Sacajaweau]

Using marijuana for legal tender in CA might work.

[shadeaud]

So they are as legal as penny stocks were back in the 70’s

[Red in Blue PA]

I’ thinking of using IOU’s for my taxes next year.

I mean, if CA can do it, why not me?

[Bobalu]

[gorilla_warrior]

If they are protected by anti-fraud law, why aren’t Arnold and the California Legislature in the slammer? All of them are frauds.

[Mouton]

I guess the SEC decided to by pass having to rule on the Prospectus and went right to the decision. Kind of like how they pass bills in the Congress these days that is they are not yet in print while being voted upon.

Truly we have arrived in a non representative despotic state. The Eloi are the politicians and bureacrates and the Morlocks are the rest of the country.

Vince

[P-Marlowe]

This seems to be some kind of effort to stave off bankruptcy. Frankly the only hope California has is to go into some kind of bankruptcy where these stupid pensions and union contracts can be dissolved and renegotiated.

IMHO state employee Unions should be outlawed. Eventually every state in the Union is going to be faced with this kind of mess. We have more than 10% unemployment in this state and there has not been a single state worker that I know of who has been laid off.

[hoosier hick]

“Securities” in what sense? Being secured didn’t help Chrysler and GM lenders/bondholders when those companies went bankrupt. Will the Feds screw the holders of CA debt too??

hh

[massgopguy]

So they’ll be taxed as Unearned Income?

[Cboldt]

-- Soon they will tell us sea shells are legal tender --

And shark's teeth. I can get my hands on some lobster shells, what is their value in currency?

[Mouton]

Report in the press this AM says GM is now out of bankruptcy protection! Guess they had a dicktonectimy (Rush’s word) by way of the courts and BO. See the USA in your Green Car today...their new motto.

[SueRae]

This is truly bizarro world. And they’re going for sale on e-bay? Isn’t this worse than CDO’s????

Abolish the SEC.

[Brookhaven]

That IOU is progaganda by the Democrats that attempts to blame the financial crisis in Calif. totally on Rebpublican.

The root cause of the crisis has been DECADES of Democratic control of the Calif. state governemt (legislative and executive.)

The is the same thing the Democrats are doing nationally. It was Democrats housing market/loan policies that are the root cause of our curret national economic crisis. So who do the Democrats turn around and blame? Bush and the Republicans.

Thanks for posting that image and being part of the Demcorat propaganda machine.

[Red in Blue PA]

I know my ammo has better value than US Currency.