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SEC Says California IOUs Are Legal "Securities"
CNBC ^ | 7/9/2009 | Staff

Posted on 07/10/2009 5:33:42 AM PDT by 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.

(Excerpt) Read more at cnbc.com ...


TOPICS: News/Current Events; US: California
KEYWORDS: ca2009; iou; sec

1 posted on 07/10/2009 5:33:43 AM PDT by Red in Blue PA
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To: Red in Blue PA

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


2 posted on 07/10/2009 5:34:40 AM PDT by yldstrk (My heros have always been cowboys--Reagan and Bush)
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To: Red in Blue PA

Soon they will tell us sea shells are legal tender.


3 posted on 07/10/2009 5:35:29 AM PDT by taxtruth
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To: Red in Blue PA

Their risk weight alone makes them a severe liability.


4 posted on 07/10/2009 5:36:27 AM PDT by cranked
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To: Red in Blue PA

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


5 posted on 07/10/2009 5:37:00 AM PDT by Man50D (Fair Tax, you earn it, you keep it! FairTaxNation.com)
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To: Red in Blue PA

So were Confederate dollars.


6 posted on 07/10/2009 5:37:25 AM PDT by nina0113
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To: taxtruth

Using marijuana for legal tender in CA might work.


7 posted on 07/10/2009 5:38:34 AM PDT by Sacajaweau
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To: nina0113

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


8 posted on 07/10/2009 5:38:42 AM PDT by shadeaud ("If you can't beat them, arrange to have them beaten." -- George Carlin)
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To: Man50D

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

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


9 posted on 07/10/2009 5:38:46 AM PDT by Red in Blue PA (If guns cause crime, then all of mine are defective!)
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To: Red in Blue PA

10 posted on 07/10/2009 5:38:52 AM PDT by Bobalu (If life was fair it would be the horse's turn to ride.)
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To: Red in Blue PA

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


11 posted on 07/10/2009 5:40:33 AM PDT by gorilla_warrior (Metrosexual hairless RINOs for hopey-changey bipartisan-ness)
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To: gorilla_warrior

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


12 posted on 07/10/2009 5:46:38 AM PDT by Mouton
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To: Red in Blue PA
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.

13 posted on 07/10/2009 5:48:15 AM PDT by P-Marlowe (LPFOKETT GAHCOEEP-w/o*)
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To: Red in Blue PA

“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


14 posted on 07/10/2009 5:49:01 AM PDT by hoosier hick (Note to RINOs: We need a choice, not an echo....Barry Goldwater)
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To: P-Marlowe

So they’ll be taxed as Unearned Income?


15 posted on 07/10/2009 5:49:35 AM PDT by massgopguy (I owe everything to George Bailey)
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To: taxtruth
-- 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?

16 posted on 07/10/2009 5:51:19 AM PDT by Cboldt
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To: hoosier hick

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.


17 posted on 07/10/2009 5:56:49 AM PDT by Mouton
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To: Red in Blue PA

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

Abolish the SEC.


18 posted on 07/10/2009 5:58:42 AM PDT by SueRae
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To: Bobalu

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.


19 posted on 07/10/2009 6:02:22 AM PDT by Brookhaven (Obama hasn't just open Pandora's box, he has thrown us inside and closed the lid.)
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To: taxtruth

I know my ammo has better value than US Currency.


20 posted on 07/10/2009 6:04:18 AM PDT by Red in Blue PA (If guns cause crime, then all of mine are defective!)
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To: Red in Blue PA

So states can print their own money now?

Lets see, if I itemized deductions last year, and deducted state income tax withholding, I’ll have to add back and state refund as income the next year...but if the IOU hasn’t been traded for cash before next April 15, then what do I do?

If I sell them for half face value, can I take that as a loss?

My head is spinning, I think I’d just trade them in for carbon credits...presto, Califoria saves the planet again!


21 posted on 07/10/2009 6:12:05 AM PDT by lacrew (The 274th trimester is a very late procedure)
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To: Mouton

In the end, didn’t the Morlocks eat the Eloi?


22 posted on 07/10/2009 6:27:07 AM PDT by super7man
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To: SueRae

I see lots of offers to buy the IOUs on Craigslist but no offers to sell. Somebody wants ‘em.


23 posted on 07/10/2009 6:32:31 AM PDT by super7man
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To: super7man

Has anyone posted an image of one of these turkeys?


24 posted on 07/10/2009 6:38:37 AM PDT by Oldexpat
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