California To Go A Boom-Boom? Making That Independent Analyst From Last Year Look A Lot Better
From BoomBustBlog December 22, 2012 - 4:35pm
I recently recieved this email and thought it may spark conversation if I posted it to the general site.
I had some general finance questions about CA's massive debt.
I read that CA issued 55 billion in new debt in the 10-11 year, I'm assuming much of this new debt are CABs (capital appreciation bonds) as CA can't really spend a dime more on any new debt as we're not paying our existing debt.
Who is buying this "unserviced" debt and are they taking a 20-30 year "call bet" on the assets and collecting NO interest? Or are investors & funds booking "fictional interest gains" from CA's unpaid debt? (later to be written off)
If the "investors" of CA's CAB debt are getting interest, from whom are they getting the interest?
And do the payers of that interest get preference in claims over the bond holders? Other CA debt, CALPERS & the City of San Bernardino s...