So when Arnie came, hat in hand, begging for like $8 billion dollars to repair the disaster that is California, we snickered a little. Yes, we admit it, we snickered. Ok, ok, municipal bankruptcy is not funny at all. We know. (Sheesh, you guys have a bunch of Munis or what?)
All that as background should tell you exactly why we say “What the fuck, Arnie,” when we see something like this:

California sold $5 billion in short-term municipal notes Thursday in a deal that helps the state meet its cash needs and one that was upsized twice in the final 24 hours because of strong investor demand.
The state will return to the market at a later date to raise the additional $2 billion toward its $7 billion total cash-flow borrowing needs for fiscal 2008-09, Bill Lockyer, California’s state treasurer, said in a statement.
To woo enough investors to take on such a large block of debt, California set the initial yield ranges to relatively high levels for short-term paper. Demand for the offering was sufficient that the final yields were at the low end of ranges first quoted to individual investors.

This really sucked because we were so revved up making fun of California that any success on their part totally killed our schadenfreunde buzz. Weak, man. Seriously. Weak.
I guess Cramer’s totally generic and borderline irresponsible “Go Munis” message the other day managed somehow to hit home.
California Increases Offering Twice to Meet Demand for Munis [WSJ]

Comments (19)

  1. Posted by guest | October 17, 2008 at 9:36 AM

    East cost is the best coast, bitches.

  2. Posted by guest | October 17, 2008 at 9:39 AM

    when is the gov. going to investigate goldman for there ridiculous call that crude would be trading 150 bux a barrel by years end. Were they selling all the way up??Does anyone else feel that there was blatant recklessness on there behalf?.

  3. Posted by guest | October 17, 2008 at 9:43 AM

    @2 Umm, no.

  4. Posted by guest | October 17, 2008 at 9:52 AM

    I was at a conference about CA employment law yesterday, and I can honestly say I have no idea how CA has achieved any economic prominence whatsoever. It’s unbelievable.
    I can only hypothesize that the entire state’s economy is really being supported by weed production, sales of cameras and racing fuel to the paparazzi, and the porn industry.

  5. Posted by guest | October 17, 2008 at 9:56 AM

    @4, yes, and Citrus, celebutard and reality TV and websites, shitty Hollywood movies and petroleum. In that order, ‘cept that porno is #1.

  6. Posted by diablo | October 17, 2008 at 10:24 AM

    Better insight from the pros in the bond market, not EP. Here:
    “So are these California bonds worth the risk? Perhaps California will have more budget difficulties than other states, but ultimately the state’s budget will come down to tough political decisions rather than an inability to finance their debts. Put another way, I’d rather own 9-month state of California paper at 6.5% taxable equivalent levels than most corporate bonds. And its [sic] investors thinking along those lines that will wind up buying up these bonds.”
    http://accruedint.blogspot.com/2008/10/managing-californias-cash-aint-like.html

  7. Posted by guest | October 17, 2008 at 10:49 AM

    bang bros. v. LEH bros, you tell me?
    ep is a big bb fan, yes?
    uh, GOOG, AAPL, CVX, DNA, SPWR, DIS, etc.
    that’s a truncated list, but i just woke up.
    enjoy your conference.
    -retail

  8. Posted by guest | October 17, 2008 at 10:59 AM

    @4 Huge immigrant labor force. As soon as the blue collar homebuilding sector went south so did most of the cheap labor.

  9. Posted by guest | October 17, 2008 at 11:17 AM

    8: We also learned about ICE raids. So much for CA’s economic eminence.
    Those fuckers are scary.

  10. Posted by guest | October 17, 2008 at 11:51 AM

    Have you noticed that the tax incentives that NYC is giving to the entertainment industry are working for NY?

  11. Posted by guest | October 17, 2008 at 12:42 PM

    people who do not think that the fundamentals of the economy are sound are economic girly men
    - Gov. Conan 2004

  12. Posted by guest | October 17, 2008 at 12:51 PM

    California is a pony that has more tricks than you can count – biotech, agriculture, software, chip design, defense, film and television, apparel, logistics and two ports that bring in 40 per cent of US exports.
    But some people seem to have a tough time getting over their Stanford GSB rejection letter.

  13. Posted by guest | October 17, 2008 at 12:54 PM

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    But some people seem to have a tough time getting over their Stanford GSB rejection letter.

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