Tweet
Investors are doing what the voters refuse to do--bring sanity back to government.
"Lockyer obviously is trying to issue some reassurance to bond markets. The bond market recently demanded almost a half percent risk premium to sell California’s general obligation bonds and could only sell about 60 percent of the bonds put on the market compared to 75 percent last year in November. There were no buyers for the other one third of the bonds even with the rate kicker added.
Rumors in the bond markets were that the Federal Reserve was going to snap up the un-bought bonds. You can lead a horse to water but you can’t make him drink. Investors are gradually losing confidence in California’s bond issues."
Thanks to the investors that refuse to buy corrupt and worthless California bonds, we might be able to return sanity to the economics of the State. The bad news is that it is too late. By the end of 2011 we will see close to 100 American cities declare bankruptcy--and California might have more than its share.
The good news is that investors are acting rationally. Too bad voters in California don't.
More...
"Lockyer obviously is trying to issue some reassurance to bond markets. The bond market recently demanded almost a half percent risk premium to sell California’s general obligation bonds and could only sell about 60 percent of the bonds put on the market compared to 75 percent last year in November. There were no buyers for the other one third of the bonds even with the rate kicker added.
Rumors in the bond markets were that the Federal Reserve was going to snap up the un-bought bonds. You can lead a horse to water but you can’t make him drink. Investors are gradually losing confidence in California’s bond issues."
Thanks to the investors that refuse to buy corrupt and worthless California bonds, we might be able to return sanity to the economics of the State. The bad news is that it is too late. By the end of 2011 we will see close to 100 American cities declare bankruptcy--and California might have more than its share.
The good news is that investors are acting rationally. Too bad voters in California don't.
More...