Securities Fraud?

Well, this is interesting.  It seems that the Securities and Exchange Commission has filed suit against New Jersey for securities fraud in marketing its debt.  Their problem was that they neglected to report some pension liabilities.

I doubt that California has made that mistake, but State Treasurer, Bill Lockyer, has been very aggressive in attempting to counter any suggestion that California could possibly default on its credit obligations.  I know this from personal experience.  When I first mentioned the possibility of a California default, his office sent out two press releases, the point of which was to highlight my incompetence stupidity and the impossibility of a California default.  While I enjoy rereading the insults once in a while, I’ll stick the claims of financial infallibility today.  Here’s a sample:

“To be crystal clear: The State faces absolutely no danger of defaulting on its bond payments.

My guess is that if a private company made that claim it could be securities fraud.

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