California Asks Feds to Back its IOUs

April 16th, 2009

Add it to the list.

Via: Sacramento Bee:

Facing what could be the largest cash flow problem in state history, California officials are asking the federal government to back billions of dollars in short-term loans the state must seek in July.

“We’re going to need cash-flow borrowing the likes of which California has never seen, at a time when market and economic forces are stacked against us,” said Tom Dresslar, spokesman for state Treasurer Bill Lockyer. “That’s a recipe for calamity.”

While the state routinely borrows money at the start of fiscal years on July 1 by issuing interest-bearing Revenue Anticipation Notes, or RANs, a combination of factors have conspired to form a mountainous hurdle this time around.

Those factors include the sheer size of the amount needed ā€“ at least $13 billion ā€“ the state’s woeful credit rating and the generally sorry state of the nation’s financial markets.

Posted in Economy | Top Of Page

One Response to “California Asks Feds to Back its IOUs”

  1. erth2karin Says:

    Here’s where the real picture will begin to be seen –
    After declaring financial institutions “too big to fail”, letting entire states founder and sink will show clearly where Their priorities lie, no matter what They would have us believe.

    Compared to the $multi-hundred-billion$ bailout of the Fed’s money-laundering entities, if the state of California meets Their criteria for “small enough to fail”, then the rest of us will have a pretty good idea where we stand in America’s Big Picture.

    Just in case we didn’t already get it…

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