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    California and Cyprus

    California and Cyprus

    State auditor: California’s net worth at negative $127.2 billion (h/t @patrickmcgleason):

    Were California’s state government a business, it would be a candidate for insolvency with a negative net worth of $127.2 billion, according to an annual financial report issued by State Auditor Elaine Howle and the Bureau of State Audits.The report, which covers the fiscal year ending June 30, 2012, says that the state’s negative status — all of its assets minus all of its liabilities — increased that year, largely because it spent more than it received in revenue….

    The list of long-term obligations did not include the much-disputed unfunded liabilities for state employees’ future pensions, nor the $60-plus billion in unfunded liabilities for retiree health care. The Governmental Accounting Standards Board and Moody’s, a major bond credit rating house, have been pushing states and localities to include unfunded retiree obligations in their balance sheets and were they to be added to California’s, it could push its negative net worth down by several hundred billion dollars.

    Bank of Cyprus Customers May Lose as Much as 60% on Deposits:

    Cyprus may imposes losses of as much as 60 percent on Bank of Cyprus Plc accounts exceeding 100,000 euros ($128,000) as part of an aid deal to stop the country from going bankrupt.

    Customers will have 37.5 percent of their deposits above this amount converted into shares with full voting rights and access to any future Bank of Cyprus dividend, the Nicosia-based central bank said in an e-mailed statement. A further 22.5 percent will be temporarily withheld to ensure the lender meets the terms of its recapitalization, as agreed under Cyprus’s loan agreement with international creditors, the central bank said.

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    Estragon | April 1, 2013 at 12:46 am

    Odd, isn’t it? California, as a State in our Union, has more effective sovereignty than the putatively “independent” nations with membership in the EU.

    No one can tell California they have to pay their debts. Even though the deficits are a clear violation of the state constitution, there is no provision in the US Constitution that would allow the federal government to force California to obey its own laws.

    Only the people who buy their bonds can stop their insanity. When bond funds and pension funds start divesting themselves of California paper, combined with the exodus of businesses, higher-income individuals, and private equity, then perhaps the state will face reality.

    But as federal taxpayers we must also draw a line in the sand: not one penny of federal aid to save any state from the consequences of their own mismanagement.

    To California, we say: hey, you must have had a plan when you spent all the money you didn’t have. Hope it works out for you.


     
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    Henry Hawkins | April 1, 2013 at 11:36 am

    I will absolutely laugh my ass off if California decides to pull a ‘cypriotomy’ on their wealthiest citizens, especially taking 60% of the bank accounts of all those Hollywood libiots.


       
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      Subotai Bahadur in reply to Henry Hawkins. | April 1, 2013 at 12:44 pm

      As would I. However, we both know that any such Cypri-fornian legislation, Executive Order, or ukase would have an exemption for the entertainment industry and Leftist NGO’s. It is the California way.

      Subotai Bahadur


     
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    Tparty | April 1, 2013 at 1:13 pm

    You California muppets can’t handle the truth! Bitchez,we live a world that has printing presses,and those printers have to be guarded by men with guns,who’s gonna do it? You? You Jerry Brown? I have a greater responsibility than you can possibly fathom. You weep for the citizens of California,and you curse the Federal Reserve. You have that luxury,you have that luxury of not knowing what I know. That the dollar’s slow death made a few old white men wealthy,and it’s unbacked existence and imaginary value,grotesque and incomprehensible to you,enables bankers to live large while providing nothing of value to our society. You don’t want the truth because deep down in places you don’t talk about at parties,you want me on that printer,you need me on that printer. We use words like greed, power,ego-stroking domination. We use these words as a backbone of a life spent defending something,you use them as a punch line. I have neither the time,nor the inclination to explain myself to a man that rises and sleeps under the blanket of the very fiat dollars that I provide and then questions the manner in which I provide them. I’d rather you just said thank you,and went on your way. Otherwise I suggest you pick up an ink cartridge and man a press,either way,I don’t give a damn what you think you are entitled to.


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