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California Taking $1.5bn Load From Jp Morgan Chase!

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http://www.cnbc.com/id/32584157

California Turns to JPMorgan for $1.5 Billion Loan

Published: Thursday, 27 Aug 2009 | 2:01 PM ET

By: Reuters

California will pay no fees and 3 percent interest on a $1.5 billion loan from JPMorgan Chase that will provide the state with money to pay its recently issued IOUs, State Treasurer Bill Lockyer's office said on Thursday.

The government of the most populous U.S. state issued the IOUs, which carry a 3.75 percent interest rate, to conserve dwindling cash during its recent budget crisis.

California is scheduled to begin redeeming the IOUs, issued to taxpayers owed refunds and vendors, on Sept. 4.

The state through Tuesday had issued 414,000 of the IOUs, technically registered warrants promising payment, worth $2.26 billion, according to the state controller's office.

California will repay the loan from JPMorgan Chase [JPM 43.45 0.15 (+0.35%) ] after its planned sale of revenue anticipation notes next month, Lockyer's office said in a statement.

Lockyer's office is planning to sell $10.5 billion of the short-term debt to raise proceeds for the state's government's cash-flow purposes.

But it is prepared for a smaller sale of $7.8 billion of the notes if Gov. Arnold Schwarzenegger and lawmakers approve measures to defer some payments, the treasurer's office said in its statement.

A date for the note sale has not been set yet but Lockyer has said he is planning to hold the sale in mid-September.

The whole US economy is a f*cking scam! Didn't the Fed extend swap lines and open up the discount window to JP Morgan Chase??? And now they're bailing out California??? Je5u5 H - the sooner they audit the fed, the better.

Edited by AvidFan

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Let's face it, the entire US economy is "short" solvency on an expected growth rate of 3% in nominal terms, to the tune of around $1.8 trillion according to Roubini - $3.6 trillion losses minus $1.8 trillion in reserves.

You know how naked short selling works in the states - just before reg show kicks in, you sell the darn things to someone else who never expects delivery and you keep the fake-money ball in the air.

Looks like they're trying to do it with a missing $1.8 trillion this time.

Edited by AvidFan

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