California Offers “Build American Bonds” to Unknowns. Their Credit Rating was Just Slashed.

Abstract: California continues to grovel in the political alleyways like a diseased hooker in need of a quick fix with a frantic clarion call for money from anywhere and everywhere. The social and moral composition of California has been dissipated into a sickening puddle of tears, debt and drugs while their skill and reputation for handling finances are the basis for some of the funniest jokes in the universe. Besotted and mired in a drug infested financial inferno with hoards of swarming illegal aliens milking every possible benefit they have hit the very bottom of the Pit.  They now proffer “Build American Bonds” to some unknown investors probably looking for a sweetheart deal. They must continue to probe for co-suckers to partner with them as their noisy public misery surges on, punctuating the atmosphere with a cavalier style resembling Zimbabwe. They glubber forth so they can borrow even more money at even more exorbitant interest rates knowing that they have no way of paying back the loans and all the while shouting out the mandate that  they have no plans to cut spending—the financial disease that initiated this mess. They are busted along many dimensional lines. Only a fiscal earthquake can jolt these lunatics back into financial reality and that will be a general default. That disaster will happen soon because the number of suckers on this planet is fortunately limited and our currency is threatened with massive inflation.

The End of California

We all know that the duly elected Assembly and their wonderful governor ‘agreed’ on a ‘path forward’ to ‘compromise on the budget.[1]’ California[2]descends into oblivion.[3] is finished as a society in moral, social and economic terms.[4][5][6][7]  Polluted with drug-crazed Marxian puppets parading as those who ‘represent the people,’ the Sacramento Legislature cannot seem to find ways to arrest their psychotic spending sprees that will sink the state in massive debt for decades. We know that the Golden State has had some nasty encounters with financial reality in past years, but now they face The Abyss and what is their plan? Beg for money from somewhere else—any where!!

“Nov. 3 (Bloomberg) -- California is responding to investor demand for more of the state’s Build America Bonds by offering about $750 million today after a so-called reverse inquiry that is more common for corporate issues than for municipals”[8]-- California Answers Call for $750 Million in Build America Bonds By Jeremy R. Cooke and Andrew Frye November 3, 2009

But, what and who support this reverse inquiry?? People like Soros or Buffett looking for another sweetheart deal? “Despite all of its credit and supply issues, there’s at least one buyer” with a “sizeable” appetite.  Neither California nor Citigroup, in brief statements yesterday, identified the investor or investors who asked the state to create a new issue of its taxable debt.

“Reverse inquiry is much more common in taxables,” Fabian said in an interview. “It doesn’t happen a lot in munis.”

Is this like dithering with a hooker for a special price?

“Taxable bonds due in April 2039 with a 7.55 percent taxable coupon interest rate traded to customers at prices to yield about 7.2 percent yesterday, Municipal Securities Rulemaking Board trade data show.”-- California Answers Call

This was precipitated, we learn from the ‘experts,’ like Paul Krugman[9] of the Walter Duranty Papers, [10] who advised  us that the constitutional limits to taxation in California are the root problem to their debt and deficits and we need to raise taxes![11]

Wasn’t this predictable?? Higher taxes will bring us prosperity. But, when did this leftist puppet ever suggest anything other than more taxes and bigger government for any problem? Never.

So, the grubby quest for more funds morphs into a sickening spectacle of tears and threats and howls that match many of the elements of the Divine Comedy[12]. We have passed the first two cantos [first was the drug/political culture and the second canto was the uncontrolled social spending] in this epic and, now having passed Purgatorio, we enter the Inferno. We have to acknowledge that Paradiso is lost forever in a social swamp infested with sloth, sodomy and drug addiction. This dismal failure was predictable and is actually a desirable outcome for the elitists of the Left.[13] But, not to suggest that they have no designs on the wealth of others, as the rest of us are their targets, we must study this nonsense in some detail:

Now, let us do some thinking here. Some idiot wants to put out 750 million dollars for some bonds in a state with a lowered credit rating that mature in 2039—a mere 30 years at 7.2% and taxable to boot?? Who can this be and since Citi[14] was fixed up by TARP we wonder if there is an end-run play here and the ‘inquirer’ is attached to or cohabitating with the federal government. Here is the phony co-signer theory advanced by someone. 

Previous pleas:

“California is not asking for cash, like the tens of billions given to AIG, General Motors or Morgan Stanley. (MS) Instead, the state with the worst credit rating in the nation is asking that Washington act as a sort of co-signer on the state's borrowing, to be backed up with money from the Troubled Asset Relief Program.”[15]-- Judy Lin [Emphasis is mine in all quotes. All quotes in this blog reference the Judy Lin article unless stated otherwise.]

This is like “sort of “selling your little sister into slavery so you can keep your sick mother fixed up with the latest in designer drugs and living in the trendy new  green ambience financed with some expensive carbon cap receipts and weekly trips to Mexicali. 

And an echo from L. A.:

“"We are not asking for a bailout," said state Assembly Speaker Karen Bass, a Los Angeles Democrat.”We're asking for the federal government to step in where commercial banks can't this year because of the crisis within the financial industry.””—quote from Assembly Speaker Karen Bass

Now, you have a commercial loan or one that is disguised to look like one.

“"I think if the federal government can go to the aid of major financial institutions, particularly when state and local governments face short-term liquidity issues, I think helping them out is very relevant," Frank said.”-- Barney Frank [Backside Barney[16]]

Short-term?? Liquidity?

Here are the major problems with this:

[1] California is a dead beat and frantically scrounging for more and more loans and cannot avoid a default.

[2] 750 million is peanuts in their 15 billion dollar deficit—soon to balloon to 30 billions and beyond.  This cannot help much.  California will default anyway. 30 years is so far out that 750 million might not buy even one lid of grass in the not-s0-far future.

[3] California’s credit rating is poop grade now as of today just a few hours ago: “Moody's Investors Service downgraded California's general-obligation bonds to A2 from A1, the New York-based agency announced Friday.”[17]

[4] There is no hint that the union-dominated state Assembly, a maudlin parade of Marxian stooges, will cut spending especially on their phony ejukashon where 40% of tax revenues are destined to be spent.

[5] People are wildly fleeing the state as debt soars and the ‘fees’ increase in lieu of taxes and control by the Green Weenies[18][19][20][21][22][23][24][25][26][27][28] now known as EcoNazis because of their dictatorial and psychotic conduct and thus  becomes intolerable. Tax revenues will crash and, of course, they will have to raise more money. What they really want is to get their claws into property taxes.

[6] We generally don’t find suckers of this base cognitive level unless we look to the federal government. Something is phony here.

California will soon have matched Somalia’s social structure and Zimbabwe’s financial success. Evabody gonna get well from cheap grass and rich.

This is hopeless. Move out!

rycK [a 5^th generation Californian in exile]

Comments to: ryckki@gmail.com