
Big Banks Don't Want California's IOUs - gasull
http://online.wsj.com/article/SB124692354575702881.html
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jswinghammer
Under normal circumstances I'd be applauding the banks for refusing these IOUs
but the banks took bailout money and they do owe something to the people of
California morally if not legally. People in California helped bail them out
and if they're asking for your help it seems only fair to give it to them. I
seriously doubt that Obama would allow these IOUs to actually be worthless so
what's the risk exactly?

I didn't think the banks could get less popular but apparently they're trying
to surprise us all on that front. California is a mess and this latest
development certainly hasn't helped.

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anamax
> but the banks took bailout money

"took" suggests that they all wanted it. We know that some of them were
"encouraged". The feds basically destroyed BofA with the forced merger.

> People in California helped bail them out

Actually, most of the bail out money came from outside CA. Do you really think
that those folks want their "investment" pissed away in CA?

> if they're asking for your help it seems only fair to give it to them.

Actually, "the people of CA" aren't doing any such thing. The state govt is
passing out script while it flails around, hoping that the money unicorn will
poop some golden bricks.

> I seriously doubt that Obama would allow these IOUs to actually be worthless
> so what's the risk exactly?

I'm sure that folks outside CA are happy to read that.

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jswinghammer
Most of it did come from outside of CA but a decent amount of it did come from
CA. I'm not saying this is a great idea under normal circumstances-just these
circumstances.

~~~
anamax
> I'm not saying this is a great idea under normal circumstances-just these
> circumstances.

What, exactly, is this "great idea", what are the circumstances that make that
idea "great", and "great" for whom?

I think that loaning money to the state of CA is like giving booze to a drunk.
That would be bad (for the drunk) if Bill Gates did it, but taking money from
folks who are hard pressed (general taxpayers and folks dependent on govt) is
even worse.

However, you clearly disagree, so let's see the details.

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russell
Schwarzenegger should follow Palin's lead. He's had any number of chances to
fix this and has failed. He doesn't want to raise taxes, but the state is in
such dire straits that we need revenue. I don't like higher auto registration
fees, but I'm willing to pitch in. His latest objection is that the budget
doesn't address welfare fraud. Good grief!

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grellas
A fair point but the problem is multi-dimensional - 40%+ in spending increases
during the past four years or so plus severely reduced revenues owing to the
recession = lethal mix for fiscal responsibility.

The thing is a horrible mess right now. I don't blame banks for not wanting to
be paid in funny money, though.

~~~
anamax
> severely reduced revenues owing to the recession

They're only "severely reduced" from a spike in 07. They're well ahead of just
a couple of years ago.

CA Govt behaves like a stupid lottery winner. When it has a great year, it
acts as if all years will be better.

You know how this story ends. "Ex-millionare now homeless, bankrupt, sued by
three ex-wives, collecting cans and dodging bill collectors."

