This past week, California started the process of offering $14 Billion of bonds.
It didn’t go well.
Bond yields had to rise, a lot, to move the inventory in the first tranche, and even then it didn’t all move. But the State Employees hawking this credit card load are trying to put a smiley face on it.
we find that of $4.5 Billion they set out to sell in the first batch, they only got $4.138 Billion placed. Though I do have to agree with them that getting even that much placed, and at very high prices, was quite an accomplishment…
California Treasurer Bill Lockyer’s office said on Thursday it priced a total of $4.138 billion of general obligation bonds in its sale of the debt this week, less than the $4.5 billion it had put up for sale.
Despite falling short, Lockyer said in a statement the sale’s total was a “significant accomplishment” in what he termed a “cold and inhospitable market” this week.
Gee, trouble getting the old Credit Card Limit lifted when you are bankrupt… Who knew…
Yields ranged from 3.75 percent to 7.23 percent for the taxable debt and from 2.95 percent to 5.0 percent for the tax-exempt bonds.
Why the range? Some bonds are “revenue bonds”. If the thing that is supposed to pay them off goes under, you get nothing. Others are ‘general obligation’. As long as the State has a dime (and not in bankruptcy), you get paid. And, of course, the tax exempt bonds typically have more demand as you get to dodge the 11% State Income Tax on them.
That we’ve got State bonds running at 7%+ and tax exempt up to 5%+ when Treasuries are down in the ‘near nothing’ range is, er, startling.
Perhaps Grass Can Save Us
Recently, the voters turned down a proposition to legalize and tax marijuana. The “scuttlebutt” was that as it was already “legal” for “medical use” (say, oh, “poor appetite…”) why “legalize it”? It’s just a tax bill…
That was at the State level. At the local level, plans roll on undeterred…
Oakland, California, (Currently under the ‘leadership’ of “Governor Moonbeam” – at least until he takes over the state) can’t pay its cops. So it has a plan. Grow “industrial scale Marijuana” and use that to generate revenue. To, er, pay the cops? To, um, I suppose, guard the grass?
Oakland’s City Council July 20 approved regulations permitting what the San Francisco Chronicle called “industrial-scale” cannabis farms—over the protests of small growers who fear they will be squeezed out of the industry they helped build. To address such concerns, the council pledged to create regulations for small and medium-size grow operations later this year.
“It’s really important for Oakland to be a vital part of that growth and development for licensed facilities,” said council member and mayoral candidate Rebecca Kaplan.
Why? Perhaps what comes a bit lower in the article is a clue:
The regulations will award permits to four indoor cannabis farms. There will be no size limit, but there have been proposals for farms as large as 100,000 square feet—about the size of two football fields. The regulations require applicants to have a minimum of $3 million worth of insurance, hire security and pay a $211,000 annual permit fee. The city will start issuing permits in January.
Hmmm… Buckets of Money from “fees”…. Yup, that’s a California Government…
But Steve DeAngelo, owner of Oakland’s Harborside Health Center, the largest medical marijuana dispensary in the nation, bitterly opposed the measure. His dispensary buys from some 500 different growers—meaning Harborside offers some 100 varieties at any time. Permitting only industrial operations would reduce variety, he said.
“Government should not choose the winners and losers but create a level playing field,” he said. “Some people might prefer mass production, assembly-line cannabis that costs less. Others might prefer cannabis grown by a master gardener in a smaller plot. “Let the market sort it out,” he said.
Only in California would you hear Free Market Conservative arguments from a Pot Merchant…
Ah, well. At least California is entertaining. It’s not like the Government will use its power to enforce an oligopoly for its own benefit and punish folks who don’t play along with the power structure.
While regulating approved growers, Oakland also plans to crack down on illegal grows, Arturo Sanchez, an assistant to the city administrator, told the City Counil—comments that prompted hissing and booing in the crowd.
Oh, sorry, my mistake… At least now we know what the police will be for. Tax collectors in blue…
I’m so glad I don’t live in Oakland.
I’m so sad Governor Moonbeam is going to do for the State what he’s done for Oakland…
I think I need to rent a room from my Uncle in Texas…
I just can’t see why anyone would think California is going to recover from the present path prior to a high velocity impact with the gutter.
(Sidebar on Governor Moonbeam: During his first term as Governor, Jerry Brown had some very wacky ideas. Things like shutting down all freeway construction. For this, he was christened “Governor Moonbeam”. In the end, he resulted in a conservative backlash that lasted for a decade or two. One can only hope…)