Wednesday, November 17, 2010

Extremely Serious: California Cancels Another Bond Sale

On the heels of delaying a $10 billion bond sale that was originally scheduled to close Wednesday, California is cancelling a $267.3 million bond sale it planned to price next week.

"The tax-exempt municipal bond market is a cold, cold world right now for issuers and taxpayers," Tom Dresslar, a spokesman for the California State Treasurer, said late Wednesday, reports WSJ. He added that the state decided to cancel another $267.3 million bond sale it planned to price next week "in light of market conditions."

According to the state of California, the $10 billion bond sale is delayed because of a lawsuit filed Tuesday that challenges the method the state is using to raise $1.2 billion in funds that will be used to pay off part of the $10 billion. But, if you can't raise a piddly, in the scheme of things, $267.3 million, there are serious problems ahead. Keep in mind, the non-partisan California audit committee just reported that California's deficit is going to increase by $25 billion plus, over the next 18 months.

If they can't raise $267.3 million, how the hell are they going to raise upwards of $25 billion?

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