Commentaries

Calling all banks honoring California IOUs

July 7, 2009

So far, I have Bank of America, Wells Fargo and Chase saying they will honor the California IOUs until Friday.

Fitch comes out swinging on California

July 6, 2009

Fitch Ratings is at it again. The credit rating firm cut California’s general obligation bonds by two notches to BBB, leaving the rating just two notches above junk. Fitch had already cut the state’s full faith and credit bonds one notch on June 25.

Bank of America to accept California IOUs

July 2, 2009

At least one bank has said it will honor California’s IOUs, which the state’s controller will start sending out today. Bank of America said it will accept the warrants from its customers, at least through July 10.

California’s IOUs may be difficult to cash in

July 1, 2009

With the California controller getting ready to send out the first batch of IOUs on Thursday, banks in the state are still trying to figure out if they want to buy the warrants from depositors. If they decide not to, get ready for crunch time and most likely the emergence of some kind of distressed debt market that will scoop up the IOUs – at a price – from those desperate for cash.

What’s the California exchange rate?

July 1, 2009

The prospect of California issuing IOUs¬†raises the intriguing prospect of a new, freely tradeable currency in the middle of the world’s principal single currency block. Clearly, the Cali will trade at a discount to the greenback, but how big should it be? Should there be a new Californian Monetary Authority to control the paper the state issues? And will the IOUs carry redemption dates where they can be converted into the real thing? This could be the start of something big…

California dreams shouldn’t include the federal government

June 30, 2009

Don’t underestimate the power of California, and its ability to suck in a reluctant federal government to bail it out of a fiscal mess of its own making.

It’s not over till it’s over

June 30, 2009

Over at The Big Picture, Jack McHugh makes some interesting comparisons between the calm seen in the markets now as banks and investors wrap and the quarter and a year ago. His takeaway though is don’t expect a repeat of last year’s second half meltdown.

California faces its moment of truth

June 29, 2009

agnes1The California budget impasse comes to a head one way or the other this week, with state¬†lawmakers needing to make nice by June 30 to close a $24 billion budget gap. If they don’t, rating agencies have threatened to downgrade the state’s credit ratings.

California stares at possible ratings downgrade

June 19, 2009

It was only a matter of time before another ratings agency weighed in to warn that California could see its rating slashed if it doesn’t get its fiscal house in order soon. Moody’s Investors Service said that the state’s rating could be put on the chopping block for multiple downgrades.