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Why can't they sell them? http://en.wikipedia.org/wiki/Municipal_bond http://en.wikipedia.org/wiki/Municipal_bond Many other states and munis do. Whether its
by kp212 17y ago
Why can't they sell them?
http://en.wikipedia.org/wiki/Municipal_bond http://en.wikipedia.org/wiki/Municipal_bond
Many other states and munis do.
Whether its a good investment or not is dictated by the risk and interest rate associated to it. You can't not pay your obligations which in this case would be the interest rate to cover today's expenses. Otherwise we are talking about a larger issue which would be bankruptcy.
- bwd2 17y agoI think he meant that they can't afford to sell them. The financial condition of an issuer dictates the yield (i.e. interest rate) that investors will require to buy the bonds. California's condition is so poor that the required yield would be very high, so they have decided to force feed this debt to people who are already their creditors (in short term payable/receivable sense) but were expecting to be paid in currency.