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California is in more trouble than anyone in Sacramento is willing to admit.
"Tom Dalpiaz, who helps Advisors Asset Management oversee $3.3 billion in Melville, New York, said California and its bankers had flooded a glutted municipal bond market with too much supply."
Worse, we did NOT bid out for the newest bonds. "If California was willing to forgo competitive bidding for a $4.5 billion bond offering, the banks promised more orders from individuals and a lower bill to the taxpayers. The firms insisted that by negotiating with them, the state would benefit from its special relationship with the Wall Street troika and wind up with what two underwriters called a salutary buzz to boost demand for the debt.
When the October offering failed to sell as planned, California was forced to accept 8 percent less money than it needed and to pay as much as $123 million more in interest than the banks said was sufficient for the market. "
Three groups made money off of this no bid effort. "The firms insisted that by negotiating with them, the state would benefit from its special relationship with the Wall Street troika and wind up with what two underwriters called a salutary buzz to boost demand for the debt."
They made $12.4 million for making a couple of phone calls and pushing some paper--now you know why California is in such trouble. When even George Skelton of the LA Times thinks we need to stop borrowing, you know the State has problems.
This is another example of government being out of control.
More...
"Tom Dalpiaz, who helps Advisors Asset Management oversee $3.3 billion in Melville, New York, said California and its bankers had flooded a glutted municipal bond market with too much supply."
Worse, we did NOT bid out for the newest bonds. "If California was willing to forgo competitive bidding for a $4.5 billion bond offering, the banks promised more orders from individuals and a lower bill to the taxpayers. The firms insisted that by negotiating with them, the state would benefit from its special relationship with the Wall Street troika and wind up with what two underwriters called a salutary buzz to boost demand for the debt.
When the October offering failed to sell as planned, California was forced to accept 8 percent less money than it needed and to pay as much as $123 million more in interest than the banks said was sufficient for the market. "
Three groups made money off of this no bid effort. "The firms insisted that by negotiating with them, the state would benefit from its special relationship with the Wall Street troika and wind up with what two underwriters called a salutary buzz to boost demand for the debt."
They made $12.4 million for making a couple of phone calls and pushing some paper--now you know why California is in such trouble. When even George Skelton of the LA Times thinks we need to stop borrowing, you know the State has problems.
This is another example of government being out of control.
More...