So California is going to start paying certain vendors (including citizens awaiting their tax refunds) with IOU's. Nice.
Also, last night, the FDIC set a weekly record for this credit crisis by closing 7 banks in one day (6 in Illinois). Of course, they closed many more during the S&L crisis, but banks were smaller then and didn't have multiple branches. Dollar-for-dollar, including after adjusting for inflation, we've already outstripped the S&L, and we've only really just begun.
The stuff about the economy "stabilizing" is pretty funny/grim: the analogy is that we are no longer crashing into the ground at 300 mph, but instead only crashing into the ground at 100 mph. But in the end, we're still going to be smashed to bits.
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I was just reading an news article about how this latest job slump is really hitting the 55 and older crowd really hard. Not only are they having trouble finding a job at their old salary but they're having trouble finding any job because companies don't want to train people that they think will only work for a few more years.
ReplyDeleteYes, and most major banks just announced they will no longer accept Cali IOUs--this after Fitch downgraded their debt substantially (the "grade" reflecting analysts' estimates of how likely the debt-issuer is to default).
ReplyDeleteThis is truly uncharted territory. The last time Cali issued IOUs (sometime in the 90's?) it was because the government couldn't *agree* on a budget, not because they had no *money* for their budget.
I think it's inevitable that Uncle Sugar will be bailing out California--California is truly Too Big To Fail. But then, all the other states will stand in line...
What a mess.