Via Spike from the #GBC, this mess.
A school district north of San Diego, Poway Unified, borrowed $105 million over 40 years by selling a bond so unusual that the State of Michigan outlawed it years ago. Taxpayers in the area will end up with a nearly $1 billion bill at the end of this deal….The underwriters for the nearly $1 billion Poway bond deal, Stone & Youngberg, a unit of Stifel Nicolaus, and financial advisor Dolinka Group of Irvine, Calif., will get a sweet $1.4 million in total fees, says FOX News analyst James Farrell.
Citigroup (C: 28.86, -0.03, -0.10%), Goldman Sachs (GS: 102.50, -0.74, -0.72%), Bank of America/Merrill Lynch (BAC: 7.67, 0.00, 0.00%), among others, will split a cool $2.1 million on San Diego’s $164 million bond where taxpayers will eventually pay a billion dollars, Farrell notes.
What a Mess! California has been losing money in a rapid fashion for decades, they’re only doing worse, not better. When the bond comes due they’re going to be even MORE in debt than they are today, I fail to see any other possibility but default. Can you say “Too Big To Fail”? This will simply dip into the FEDERAL debt, which of course is a bottomless pit, as the Nation won’t declare bankruptcy, it just doesn’t pay its bills….
The fools!
“This will simply dip into the FEDERAL debt, which of course is a bottomless pit, as the Nation won’t declare bankruptcy, it just doesn’t pay its bills….”
This means FED bailout which means more money. Zimbabwe currency value at some point. We learned NOTHING in the bullshit ’80’s S&L bailout.
It’s coming; see you on the other side!
Yeah, but ‘they’ won’t have to pay for it… sigh
I think that’s the whole point! I had a buddy in High School who was HORRIBLE with money, he’d always be a few dollars short to get something he MUST have, and promised to pay me back. After his tab started adding up to about $20-$30 I just wrote it off as a total loss, and just stopped lending him money.
I know a buddy who he bilked for over $100. People lending to California are just as stupid!
The people buying this bond are suckers.
They will never be repaid. The rapacious interest rate may not even guarantee they get their initial investment back.
Seriously … unless the state of CA transfers some state lands to an escrow service to guarantee this, just dont.
C’mon. Do you really think that the Comrades in the People’s Republik Of Kalifornia gives a shit on whether they can pay the Bond off? All they are concerned with is making sure the Union Thugs keep skimming off the Teachers Paychecks, TODAY. Screw the Future.