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Title: Bill Lockyer, Furious That California Is Riskier Than Kazakhstan, Sends Angry Letters To Goldman et al About State CDS Trades
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Published: Mar 30, 2010
Author: Tyler Durden
Post Date: 2010-03-30 14:11:11 by Nebuchadnezzar
Keywords: None
Views: 94
Comments: 5
Bill Lockyer, Furious That California Is Riskier Than Kazakhstan, Sends Angry Letters To Goldman et al About State CDS Trades; (Or The Greek CDS Scapegoating Campaign - Animal Style) Submitted by Tyler Durden on 03/30/2010 10:25 -0500 Do you see what happens Larry when you sell CDS on California? You get a Greek-style scapegoating campaign. Cali's State Treasurer Bill Lockyer, exasperated at his impotence to sell $2 billion in GO bonds, has resorted to the last option: sending angry missives and trying to make a media circus out of it. It is now all Goldman's fault that California is bankrupt, just because it dares to make a market in Cali CDS. Ring a bell? It worked miracles for Greece, whose bonds are now tumbling a day after everyone said Greek issues were resolved. Also, we can't wait to uncover, just like in the Greek case, that the biggest buyer of Cali CDS is PIMCO, CalPERS, TCW, Western, Oaktree, or some other California-based fund. Now that would be even funnier than Cali considered a more worthless "asset" than Kazakhstan. At least their potassium deposits are best in region. From Bill Lockyer's letter, attached below: Dear Mr. Blankfein: I write to request information about your firm's market activities related to credit default swaps on municipal bonds in general, and State of California general obligation (GO) bonds specifically. The State never has defaulted on a debt service payment in its history. Small wonder. Credit default swaps (CDS) amount to insurance against default. Yet, despite the security-plus backing of California GOs, and our spotless record of paying our debt on time and in full, market participants actively buy and sell credit default swaps (CDS) on our bonds. In fact, my office has information that indicates CDS on the State's GO bonds may rank No.1 in dollar value among all municipal issuers. We also have information that indicates your firm, which sells California GO bonds, may participate in the municipal CDS market. Data reported in the news media and other sources show that the prices, or spreads, on California CDS wrongly brand our bonds as a greater risk than those issued by such nations as Kazakhstan, Croatia, Bulgaria and Thailand. The perception of risk could adversely affect the price of our bonds when we go to market. That makes the CDS market important to our taxpayers. That is why I want to fully understand the municipal CDS market in general, the market for California CDS, and [Goldman's] role in these markets. [and much more ridiculousness] *With apologies to In-N-Out purists. What Lockyer should do, instead of following G-Pap retarded startegy of scapegoating and focusing on what is completely irrelevant even as his state burns, is nationalize the hamburger chain and IPO it (using Goldman of course). That would immediately resolve all budget problems the state has through the year 3000.
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Begin Trace Mode for Comment # 5.
#1. To: All (#0)
DON'T SHOOT, THEY'RE CALIFORNIANS, LET THEM BURN!!!!!!!!!!
OH GOD! THATS GREAT!
I know. I'm loving every minute of the multi-year collapse of that evil state.
Well, I'd rather 30% of the total US economy not collapse...but since the average voter of California keeps voting these idiots back into office, and since Arnuld morphed into a girlie man politically...I gotta agree with you. Let em burn, their Californians.
Whatever would you do if we sent your politicians back to you? I wish we would just secede. With an economy our size we would then issue our own currency, police our own borders and also be free of the Fed tax burden and debt which mostly benefits the east coasters anyway.
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#2. To: Nebuchadnezzar (#1)
#3. To: Badeye (#2)
OH GOD! THATS GREAT!
#4. To: Nebuchadnezzar (#3)
#5. To: Badeye (#4)
Well, I'd rather 30% of the total US economy not collapse...but since the average voter of California keeps voting these idiots back into office, and since Arnuld morphed into a girlie man politically...I gotta agree with you.
Replies to Comment # 5.
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