Skip to comments.California Borrows $5.4 Billion As Protection In Case U.S. Defaults
Posted on 07/26/2011 7:34:19 PM PDT by blam
California Borrows $5.4 Billion As Protection In Case U.S. Defaults
Jul. 26, 2011, 8:01 PM
UPDATE: 7:45pm, July 26
California went through with plans to borrow money from Wall Street today as a hedge against a possible U.S. default.
The AP reports that California State Treasurer Bill Lockyer secured $5.4 billion in short term loans from a group of banks, credit unions, and investment funds. The bulk of the loans come from Goldman Sachs and Wells Fargo, which each provided more than $1.4 billion.
The so-called "bridge loan" will allow the state to avoid a cash shortfall if Congress fails to raise the debt limit by the Aug. 2 deadline. from private investors.
"California had to obtain this interim financing to protect the state from the immediate, drastic consequences of a failure by Washington to resolve the debt ceiling impasse," Lockyer said in a statement. "I'm hopeful Congress and the president will do the responsible thing, solve the problem before it's too late, and not risk pushing the country into a financial and economic abyss"
The yield on the notes is 0.237 percent, compared with 1.4 percent California paid for short-term borrowing in 2010. The latest notes mature on Nov. 22, but the state may pay them off before.
(Excerpt) Read more at businessinsider.com ...
This might be a smart move. Tomorrow more states will also look for “bridge loans” and have to pay more.
If you ever find yourself in a sinking ship, simply poke a hole in the other side of the ship to let the water out.
Foolish. Compounded interest will put them in further debt. Is there not anyone that knows anything about doing the right thing?
Thank God! That means the money for the states “Dream Act” won’t be in jeopardy.
more debt, more interest they cannot afford
What a shell game!
Lots of government retirees on the bloated obese government payroll, starting to pay close attention...
“Four flat tires? But they’re only flat on the bottom.”
Zero, Pelosi, Reid, et al.
If the House Republicans caved tomorrow and gave Obama his extra $1.2 trillion, or even $2.2 trillion, California politicians would go out and borrow even more than $5.4 billion. They'd say they want to get to the lending window before Washington drives up the interest rate.
Anyone who falls for this line is a fool.
"Oh, the mean bad Republicans in Washington are forcing us to borrow even more money. Sniff sniff."
Yes but its all for the chilrens....and those dreamy illegals too. “Rat utopia has its price...
California’s $500-billion pension time bomb
Another article that blames politicians and leaders while failing to note that those individuals were almost exclusively Democrats.
Obama is going to tell us that California is “too big to fail” and we must all share the wealth.
**California’s sorry state a major threat to U.S.**
**Beyond reckless / Sacramento, Washington pile up the debt**
**What happens when California defaults? **
Barry will say they’re too big to fail.
Rob Peter to pay Paul
Let Mexico bail out Ca. Let them have the state even and the US will NEVER elect another Dem president for 100 years.
Might be worth it!
The so-called "bridge to nowhere loan" will allow the state to avoid a cash shortfall.
There, fixed it.
I betchya they redesignate it later on and find other ways to
spend waste it.
Somebody stupid enough to lend California money?
“If you ever find yourself in a sinking ship, simply poke a hole in the other side of the ship to let the water out.”
That’s the way The Stooges handled it.
The Three Stooges.
State workers with 5 years or more of service get lifetime healthcare with 0 copayment for $1.99 per year, in addition to their fat pensions with CPI’s.
It might be interesting to see what happens when the Wall Street fat cats repossess California.
Do California counties have to borrow a pantload of cash to tide them over when California defaults?
This is stupid.
You’re totally correct. However, more to the point, I wonder what his kick-back take is?