Tuesday, July 26, 2011

Now that is a funny wrinkle.

California gets $5.4 billion bank loan to bypass U.S. debt drama

I am pretty sure no one gives a shit by now. But....

"Eight banks funded the loan: Goldman Sachs, Wells Fargo, Citigroup, Barclays, JPMorgan, Bank of America Merrill Lynch, Morgan Stanley and US Bank."

They did get a really awesome interest rate. Still, what if that revenue anticipation doesn't really play out the way they thought? No big whoop. Just go groveling to President Money Bags who will promptly ask for the banks to hold more capital.

Now for a totally awesome update - Just two short months ago, Moody's was threatening to downgrade Citi,BofA, and Wells Fargo. Read more here. I am completely sure they are all better now. They have tons of money to lend!

"Moody's said the banks' ratings are currently buoyed by "uplift" from government support of the banking system during the financial crisis."

So tell me again what happens if state revenue comes in lower than expected? Looks like the banks have bled the states dry. Now the states will bleed the banks dry.

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