Massachusetts Asks About Federal Loan Amid Market Worries

[DeepModem Mom]

Source: NYT/AP

BOSTON (AP) -- The treasurer of Massachusetts has asked the federal government about lending Massachusetts money under the same favorable terms it has given banks and firms during the financial crisis.

Treasurer Timothy Cahill's requests to the U.S. Treasury and Federal Reserve Bank of Boston this week were prompted by the state's inability to borrow from the short-term debt markets, The Boston Globe reported Saturday. The financial turmoil has caused credit markets to stop lending, or to charge prohibitive rates.

California has made a similar request, saying it would run out of money by the end of the month if the short-term debt markets do not ease. The state asked whether it could not obtain loans from the Fed.

Massachusetts has enough money to cover its expenses for the coming weeks, Cahill said. But a low-rate loan would ease a cash shortfall if the credit problems persist.

''That's all we would ask them to do: Treat us like the investment banks,'' Cahill said. Federal officials have not responded to his request, Cahill said Friday....

Read more: http://www.nytimes.com/aponline/us/AP-Credit-Concerns.html

[Tutonic]

1. Floodgates are now open for business. Every state in the union

will be submitting requests for money. Can Haiti be far behind?

[live love laugh]

2. I'd rather your state get it than a corporation. n/t

[Tutonic]

3. Does it matter? We're stuck with the bill.

[Davis_X_Machina]

4. You're lending it to yourself.

State governments aren't 'them', they're 'us'.

[Alcibiades]

5. No money for you, states!

$700 billion for Wall Street, but the states can just go fuck themselves!

[roamer65]

6. Open the Fed discount window to state governments.

That will solve the problem real quick.

[hay rick]

7. California next in line.

NYT story:
http://www.nytimes.com/2008/10/04/us/04calif.html?em

LOS ANGELES — California, the nation’s most populous state and the world’s sixth-biggest economy, has warned the Treasury Department that it may need a $7 billion emergency loan from the federal government because it is running out of cash and has not been able to borrow more.

State officials said they hoped that the $700 billion federal bailout of the financial system approved by the House of Representatives on Friday would help open credit markets that have balked at providing the kind of short-term financing California and other states and local governments routinely rely on to keep operating.

But Gov. Arnold Schwarzenegger, a Republican, said at a news conference on Friday that the state “is not out of the woods yet” and in a few weeks could run out of cash to pay for basic services.

Mr. Schwarzenegger had sent a letter on Thursday night to Treasury Secretary Henry M. Paulson Jr., warning that the state might be forced to seek the emergency loan...

[Earth_First]

Where.Does.This.End? n/t

[Earth_First]

8. Where.Does.This.End? n/t

[Poseidan]

9. it's a loan

Meaning, you get your money back with interest. You have to know states are good for loans. They cannot collapse like corporations.

[Ghost Dog]

10. And it's a matter of lending who's money?

Does the money the banks are refusing to loan out, to move around, thus "lubricating" the system, belong to the banks?

No. It's not their money. Banks are employed to provide a service to society. If they have decided they can no longer provide that service, well, clearly they are no longer in business and need to be replaced.