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California Borrows $5.4 Billion As Protection In Case U.S. Defaults
http://www.businessinsider.com/california-could-run-out-of-money-if-congress-doesnt-raise-the-debt-ceiling-2011-7 ^ | 7-26-2011 | Grace Wyler

Posted on 07/26/2011 7:34:19 PM PDT by blam

California Borrows $5.4 Billion As Protection In Case U.S. Defaults

Grace Wyler
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.

(snip)

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


TOPICS: News/Current Events
KEYWORDS: california; default; economy; usdebt

1 posted on 07/26/2011 7:34:24 PM PDT by blam
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To: blam

Scary.


2 posted on 07/26/2011 7:36:04 PM PDT by thecodont
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To: blam

This might be a smart move. Tomorrow more states will also look for “bridge loans” and have to pay more.


3 posted on 07/26/2011 7:36:16 PM PDT by RitchieAprile
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To: blam

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.


4 posted on 07/26/2011 7:37:42 PM PDT by Tzimisce (Never forget that the American Revolution began when the British tried to disarm the colonists.)
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To: blam

Foolish. Compounded interest will put them in further debt. Is there not anyone that knows anything about doing the right thing?


5 posted on 07/26/2011 7:38:08 PM PDT by freekitty (Give me back my conservative vote; then find me a real conservative to vote for)
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To: blam

Thank God! That means the money for the states “Dream Act” won’t be in jeopardy.


6 posted on 07/26/2011 7:38:38 PM PDT by Psycho_Bunny (Public employee unions are the barbarian hordes of our time.)
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To: blam

more debt, more interest they cannot afford


7 posted on 07/26/2011 7:39:37 PM PDT by GeronL (The Right to Life came before the Right to Happiness)
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To: blam
Japan Is Falling, But... Still No Panic


8 posted on 07/26/2011 7:40:08 PM PDT by blam
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To: blam

What a shell game!


9 posted on 07/26/2011 7:40:29 PM PDT by elpinta (John 17:3)
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To: blam

Democrats.


10 posted on 07/26/2011 7:40:35 PM PDT by rockinqsranch (Dems, Libs, Socialists, call 'em what you will, they ALL have fairies livin' in their trees.)
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To: blam

Lots of government retirees on the bloated obese government payroll, starting to pay close attention...


11 posted on 07/26/2011 7:40:55 PM PDT by dragnet2 (Diversion and evasion are tools of deceit)
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To: Tzimisce

“Four flat tires? But they’re only flat on the bottom.”
Zero, Pelosi, Reid, et al.


12 posted on 07/26/2011 7:42:29 PM PDT by tumblindice ("I want to make sure the American people aren't hurt." President 0 to La Raza)
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To: blam
Oh BS.

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."

Puh-leeze.

13 posted on 07/26/2011 7:48:25 PM PDT by Steely Tom (Obama goes on long after the thrill of Obama is gone)
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To: blam

Yes but its all for the chilrens....and those dreamy illegals too. “Rat utopia has its price...


14 posted on 07/26/2011 7:54:01 PM PDT by tflabo ( to have been selected)
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To: blam

California’s $500-billion pension time bomb

http://www.latimes.com/news/opinion/la-oe-crane6-2010apr06,0,6247734.story

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.**

http://www.theglobeandmail.com/report-on-business/commentary/californias-sorry-state-a-major-threat-to-us/article1469347/

**Beyond reckless / Sacramento, Washington pile up the debt**

http://www.signonsandiego.com/news/2009/dec/24/beyond-reckless-sacramento-washington-pile-debt/

**What happens when California defaults? **

http://www.newgeography.com/content/001274-what-happens-when-california-defaults

Barry will say they’re too big to fail.


15 posted on 07/26/2011 7:54:40 PM PDT by WOBBLY BOB ( "I don't want the majority if we don't stand for something"- Jim Demint)
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To: blam

Rob Peter to pay Paul


16 posted on 07/26/2011 7:57:15 PM PDT by RckyRaCoCo (I prefer liberty with danger to peace with slavery, IXNAY THE TSA!)
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To: RckyRaCoCo

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!


17 posted on 07/26/2011 8:05:12 PM PDT by tflabo ( to have been selected)
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To: Steely Tom
The California politicians are just like a bunch of drunks that have zeroed out their checking account and are in total denial: “What? I can't be out of money because I still have checks (but a zero balance). Besides, I still have plastic (credit cards). What could go wrong?” Duhh. How dumb are these fools?
18 posted on 07/26/2011 8:07:14 PM PDT by MasterGunner01 (To err is human; to forgive is not our policy. -- SEAL Team SIX)
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To: blam
The so-called "bridge loan" will allow the state to avoid a cash shortfall

The so-called "bridge to nowhere loan" will allow the state to avoid a cash shortfall.

There, fixed it.

19 posted on 07/26/2011 8:10:02 PM PDT by mlocher (Is it time to cash in before I am taxed out?)
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To: MasterGunner01
The Ca. Leftists train to glory.


20 posted on 07/26/2011 8:16:10 PM PDT by tflabo ( to have been selected)
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To: blam
California went through with plans to borrow money from Wall Street today as a 'hedge' against a possible U.S. default.

I betchya they redesignate it later on and find other ways to spend waste it.

21 posted on 07/26/2011 8:31:16 PM PDT by tflabo ( to have been selected)
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To: blam

Somebody stupid enough to lend California money?


22 posted on 07/26/2011 8:47:53 PM PDT by RetiredTexasVet (There's a pill for just about everything ... except stupid!)
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To: Tzimisce

ROFL


23 posted on 07/26/2011 9:08:29 PM PDT by annieokie
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To: Tzimisce

“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.

California Communists.
The Three Stooges.
Same thing.


24 posted on 07/26/2011 9:11:45 PM PDT by EyeGuy (2012: When the Levee Breaks)
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To: blam

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.


25 posted on 07/26/2011 10:11:20 PM PDT by wac3rd (Somewhere in Hell, Ted Kennedy snickers....)
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To: freekitty

It might be interesting to see what happens when the Wall Street fat cats repossess California.


26 posted on 07/26/2011 10:41:37 PM PDT by smokingfrog ( sleep with one eye open ( <o> ---)
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To: blam

Do California counties have to borrow a pantload of cash to tide them over when California defaults?

This is stupid.


27 posted on 07/27/2011 3:07:06 AM PDT by hattend (Its a matter of public record that I did not go to Harvard Law School, but I can add. - Sarah Palin)
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To: freekitty

You’re totally correct. However, more to the point, I wonder what his kick-back take is?


28 posted on 07/27/2011 3:40:57 AM PDT by Justa
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