San Bernardino is now the third California city to seek bankruptcy protection in recent weeks […]
• Geithner urges end to ‘dumb regulation’ – “Tim Geithner, Treasury secretary, said there was “a lot of dumb regulation in our country” and urged lawmakers to act quickly in spite of resistance from the financial industry and other regulators to the administration’s plan.” [FT.com]
• California Senate Approves Budget Plan – “The California Senate early Friday approved a plan to close a $26 billion budget shortfall through steep spending cuts and a medley of one-time solutions and accounting moves.” Creative accounting, Cali? FTW! [WSJ]
• Buffett: I’m keeping my Goldman Sachs warrants – But thanks for asking. [Reuters]
• Madoff Trustee Battles Israeli Charity Over $4.7 Mln – “A charity for homeless and runaway Israeli children that lost money in Bernard Madoff’s fraud told a U.S. judge that the trustee liquidating the con man’s business wrongfully rejected its $4.72 million claim in the case.” [Bloomberg]
First, some shameless promotion:
• Breaking Media Launches Going Concern [Media Bistro]
• New Finance Blog Aims To ‘Make Accounting Sexy’ [Media Post]
• Site launched to follow accounting industry [Talking Biz News]
And the rest:
• California Budget Deal Reached By Legislators, Schwarzenegger – “The deal, reached by legislative leaders after two months of frequently acrimonious negotiations, would slash spending for schools, public works and welfare programs amid the longest recession since the 1930s. If approved by the full Senate and Assembly, the agreement will also siphon money from municipalities, force companies and individuals to pay income taxes sooner and make it more difficult to receive state aid.” [Bloomberg]
• Swiss Banks Freeze Out U.S. Clients – “In a sign that UBS AG’s high-profile spat with the Internal Revenue Service is chipping away at Switzerland’s private banking industry, some Swiss banks are cutting off or curbing business with American clients for fear of crossing U.S. authorities.” [WSJ]
• ‘Spy scandal’ hits Deutsche Bank – “Deutsche Bank has confirmed it faces a possible criminal investigation into spying allegations.” [BBC]
Last week we told you about Bank of America doing California a solid by taking the busted state’s IOU’s. Well, the banks had the holiday weekend to think about it and after some barbecue, beers, and shooting roman candles at Ken Lewis, they pretty much decided that they weren’t so cool with the idea.
“A group of the biggest U.S. banks said they would stop accepting California’s IOUs on Friday, adding pressure on the state to close its $26.3 billion annual budget gap.”
Included in “biggest U.S. Banks” just happened to be BofA.
Turns out Bank of America had their fingers crossed all along because 1) There must have been talk about Cali’s so called “good word” over the grill; and 2) Ken Lewis was completely serious about getting the interest paid back in bourbon.
Big Banks Don’t Want California’s IOUs [WSJ]
In the spirit of the recessionary season, Bank of America, being no stranger to asking for assistance, has said that it will accept California’s IOU’s.
Here is BofA’s statement, courtesy of FT Alphaville:
Bank of America Announces Limited Acceptance of California State-Issued Registered Warrants for Customers and Clients
SAN FRANCISCO, July 1 /PRNewswire/ — Bank of America today issued the following statement regarding its decision to accept California state-issued registered warrants:
“Bank of America recognizes the State of California budget crisis will impact our clients and customers. To support our customers, while giving the state legislature additional time to pass a budget, we will accept California state-registered warrants – or IOUs – from existing customers and clients. Based on state disbursement estimates, we will accept the registered warrants through July 10.
(Logo: http://www.newscom.com/cgi-bin/prnh/20050720/CLW086LOGO-b )
“As always, we will work with customers who are impacted by the state budget issues on a case-by-case basis to address their short-term needs using our existing products and services.”
An interest rate has not been announced but Ken Lewis is most certainly pulling for something in the nabe of one case of bourbon per $1 million.
BofA to accept Cali IOUs [FT Alphaville]