State of New Jersey gets $2 billion line of credit from JP Morgan

[Slimprofits]

Times have changed. They can't raise the money buy selling bonds anymore.

New Jersey has selected JPMorgan Chase & Co. to provide it as much as $2 billion in a line of credit for use in July and August, as the recession pushes state coffers to the point where its surpluses will be nearly emptied by month's end.

Department of the Treasury spokesman Tom Vincz said the state projects it will spend $18.2 million on both the credit line and the typical short-term borrowing set for late summer -- which, if holds true, would be less than what New Jersey spent to borrow $1.8 billion last year.

Eleven bids were submitted for the contract. Citigroup Global Markets Inc. finished second.

[..]

"The bidder indicated that it would be in position to use their own balance sheet to fully fund the (transaction). The second-rated bidder would offer to investors. It was essentially the only firm that indicated it had the capacity to do that," Vincz said. "This gave a level of confidence to the state that was preferable."

JPMorgan has received $25 billion from the U.S. Treasury Department effort to (bail out Wall Street firms determined by revolving door insiders to be TBTF).

Comment in red is obviously mine, I just couldn't post the end of that sentence, i.e. the party line.

http://www.courierpostonline.com/art...40350/1001/RSS

[Sapiens]

Re: State of New Jersey gets $2 billion line of credit from JP Morgan

Hey FRED, how is this for Nationalization? :rolleyes:

The sovereign State of New Jersey in compact with the other States must seek financing for its operations from a private bank.

No one asks why the states cannot borrow directly from the FED or Treasury…

They (Banksters) are fully in control, they no longer even try to hide it, the Banksters comprehend that the public is too stupid to help themselves.

May Providence help us all.


P.S. My beef with the Banksters is with their exponential fraud (fractional reserve banking), on even footing, they cannot compete with those of us that provide a service, invent or create wealth.

[don]

Re: State of New Jersey gets $2 billion line of credit from JP Morgan

The era we are entering may one day be called The Age of the Golden Circle; The one where America is busy eating its own tail, and leaving the Gilded Age looking like chump change.

[Sapiens]

Re: State of New Jersey gets $2 billion line of credit from JP Morgan

The era we are entering may one day be called The Age of the Golden Circle; The one where America is busy eating its own tail, and leaving the Gilded Age looking like chump change.

It's always been that way; that's where the concept of the Ouroboros comes from:




http://www.spirasolaris.ca/sbb4f.html

[cjppjc]

Re: State of New Jersey gets $2 billion line of credit from JP Morgan

Well you know the Governor of New Jesey is a former investment bankster. The towns in my state must be paying HUGE interest rates. They borrow a lot in the muni market.

[WildspitzE]

Re: State of New Jersey gets $2 billion line of credit from JP Morgan

Hey FRED, how is this for Nationalization? :rolleyes:

The sovereign State of New Jersey in compact with the other States must seek financing for its operations from a private bank.

No one asks why the states cannot borrow directly from the FED or Treasury…

They (Banksters) are fully in control, they no longer even try to hide it, the Banksters comprehend that the public is too stupid to help themselves.

May Providence help us all.


P.S. My beef with the Banksters is with their exponential fraud (fractional reserve banking), on even footing, they cannot compete with those of us that provide a service, invent or create wealth.

IMO this is another version, and more lucrative form, of the Bank-Treasury arb... because the banks can charge the state/muni a higher spread than what they can lock in with Treasuries. The FED/Treasury doesn't want to loan directly, because it would prefer that the banks do so to lock in excess spread and create profits.

Meaning, they prefer that the banks lend out the taxpayer funded zero cost money (that the Fed/Treasury has provided the banks) to the taxpayer funded state (as the source of repayment).

From a credit perspective, the banks understand that they are dealing with one or more notches below US Fed debt, but they are gambling that the states will be supported in the end (as this will further consolidate power with the Federal Govt). I also suspect, that this has something to do with why it's a credit line and not a purchase of newly issued bonds.