California: 8 Days Away From Issuing IOUs

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Well, it doesn’t look as though a bailout for California is forthcoming, at least not in the next week, so California will have to go it alone and deal with its own mess.

The first step:

Issuing IOUs.

From Bond Buyer, via Paul Kedrosky:

Unless lawmakers act quickly to solve the state’s budget and cash crises, California is eight days away from issuing IOUs to many of its creditors, state Controller John Chiang announced this morning.

Without such action, Chiang said his office will begin issuing registered warrants on July 2 to private businesses, local governments, and owners of unclaimed property owed money by the state government, as well as taxpayers due income tax refunds.

Now, you know what would be totally awesome? Is if the IOUs were freely tradable.

Question for the audience: How much would you pay for a $100 IOU from California?

$50 bucks? $25?

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