Comments on: Fed Debt Default Imperils CA Budget

By: David from Oceanside

David from Oceanside — Sat, 16 Jul 2011 17:27:30 +0000

So the banks borrow fiat currency at near zero rates from the Federal Reserve and invest that borrowed money in risky municipal loans. The depositors at the banks could care less where the bank lends because their deposits are government insured. The banks don’t care because they own congress and the white house and will be made whole during the next great municipal crisis.

By: Christopher Green

Christopher Green — Sat, 16 Jul 2011 02:06:48 +0000

“Bank loans are attractive to states and local governments because there is less documentation required.” That is like borrowing money from the Mafia, hardly any paperwork is required. But it is very painful if you don’t pay it back.

By: John Gardner

John Gardner — Fri, 15 Jul 2011 04:56:36 +0000

Shouldn’t you have a diagram of the Inferno rather than Purgatorio? After all, most of the legislature, the Governor and other elected officials and many of the bureaucrats will end up there rather than on the path to Paradiso …

By: Bc

Bc — Fri, 15 Jul 2011 04:20:45 +0000

For all we know these loans are secured by a lien on Yosemity. Miss a payment or exceed a ratio and Half Dome becomes B of A Dome with a toll booth in front. The Greeks are finding out banks want their money back and they will take public assets if they must.

By: Susan

Susan — Thu, 14 Jul 2011 23:00:55 +0000

Here is what leapt off the page at me as I was reading this article:

“How would you like to know as a bank depositor that your money is now
being invested in the California state budget or your city’s budget with unmet pension obligations?”

This is an absurd state of affairs, beyond the pale. Just as the Feds have to wake up to the situation we are in, so do the geniuses in Sacramento. But of course as we know from the daily barrage of bad news about how California is being run there is absolutely no indication that this will happen.

Why not just rename the state “Purgatorio” and be done with it?