Wanna buy an IOU?
With the first IOUs born of California’s fiscal gridlock in the mail, the open market for them has already formed on Craigslist.
“Will pay cash for California/IOUs” reads one Daly City posting on the online classified service. “I pay $$$ for California registered warrants – $9999,” reads another.
The Financial Times also reports that Second-Market, a company that specializes in trading illiquid assets such as private company stock and bankruptcy claims, is getting ready for a piece of the action. “We have a whole team working on it,” it quotes the firm’s CEO, Barry Silbert, as saying.
Wall Street hedge funds, municipal bond investors and other institutions are all expected to be interested in the bonds, as well, which have a 3.75 percent interest rate that matures Oct. 2.
State Controller John Chiang has said he plans to issue almost $3.4 billion in IOUs.
Isn’t the Conservative Republican form of limited (as is bathtub size) government wonderful? I see a whole new bunch of securitized financial derivative products coming to a Goldman Sachs near you. The economy is saved again!
