JP Morgan has agreed to lend California 1.5 billion to help end the California IOU issue.
I just have to comment on this because I find it very interesting. First of all, a way to exchange the California IOUs popped up. This all, because banks, such as JP Morgan, decided not to accept the California IOUs any longer.
If I had to guess I’d say that JP Morgan figured out that they were missing out on an opportunity with California. If I have my logic right, JP Morgan figured that they find a way to buy more of the debt, with better security and interest rates than what the IOUs were providing. Either that, or they expect that California will recieve some type of federal bailout in the near future that will pay off creditors such as JP Morgan at a premium.
Pretty smart. If this keeps up, we might be able to put JP Morgan right up there with Goldman Sachs.
I just have to comment on this because I find it very interesting. First of all, a way to exchange the California IOUs popped up. This all, because banks, such as JP Morgan, decided not to accept the California IOUs any longer.
If I had to guess I’d say that JP Morgan figured out that they were missing out on an opportunity with California. If I have my logic right, JP Morgan figured that they find a way to buy more of the debt, with better security and interest rates than what the IOUs were providing. Either that, or they expect that California will recieve some type of federal bailout in the near future that will pay off creditors such as JP Morgan at a premium.
Pretty smart. If this keeps up, we might be able to put JP Morgan right up there with Goldman Sachs.
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