[Plainsman]

The pigs smell the slop from congress. Like pigs to a trough the failing states and failing business will line up for rescue from their poor management. Look at California the most liberal state we have, then the other liberal states. Liberalism has them all in trouble just like the Washington democrats got lending agencies in trouble with sub-prime lending rates. The poor, the poor, everyone is entitled to a home. Sure they are, but work for it.

Schwarzenegger to U.S.: State may need $7-billion loan
In a letter obtained by The Times, the governor warns that tight credit has dried up funds California routinely relies on and it may have to seek emergency aid within weeks.
By Marc Lifsher and Evan Halper, Los Angeles Times Staff Writers
October 3, 2008
SACRAMENTO -- California Gov. Arnold Schwarzenegger, alarmed by the ongoing national financial crisis, warned Treasury Secretary Henry M. Paulson on Thursday that the state might need an emergency loan of as much as $7 billion from the federal government within weeks.

The warning comes as California is close to running out of cash to fund day-to-day government operations and is unable to access routine short-term loans that it typically relies on to remain solvent.

 

[hunter9494]

oh yeah, you knew damn well this was only the beginning......the government will have to print money like there is no tomorrow....soon, very soon our dollars will be worthless.......smart investors ran the mint out of gold last week........i wonder what they know??

 

[omegax]

From what I hear Ahnold is just saying that they can't get anyone to buy bonds, which is the path they would ordinarily go down. Apparently, it's not unusual for them to need to borrow some cash until they get the end-of-year sales-tax payments (they must collect quarterly or something). This time they can't get anyone to lend it to them because of the liquidity crunch. I know it's easy to hate on California, but there isn't much to see here.... though the fact that the credit crunch is bad enough that even a short-term bond from a state isn't secure enough for the big banks to buy is a bit disconcerting.

 

[Bobm]

the fact that California cannot continue its defict spending for left wing give away programs is the real problem.

Just like much of the spending with the Feds.

 

[cbas]

With regards to the subprime issue. I would not be surprised if some people used the line that "all people should get a home for nothing" to rationalize the sub prime market. But this is not the cause of the subprime failure.

Loans were made on no collatoral, or to high risk borrowers because lenders found a way, through deregulation of the financial system, to pass the risk they normally would have had to bare on to other banks and institutions etc.. in the form of ABCP and related financial instruments triple A securities.

So I think this thing goes beyond partisan politics or the belief that all should have a home or a piece of the American dream as being part of the problem. That may have been the spin to rationalize the orgy of borrowing but it was not the root of the problem.

Actually deregulation and greed is but whatever