New Jersey had to pull a bond auction yesterday….. that’s an unusual thing.
(Bloomberg) – New Jersey Gov. Chris Christie has learned that talking about state insolvency may have a cost.
About 20 minutes after Mr. Christie, 48, told a town-hall meeting in Paramus, N.J., today that health care costs “will bankrupt” the state, the New Jersey Economic Development Authority cut its tax-exempt school-related bond offering by more than half to $712.3 million.
Oh, you mean we should just not talk about state insolvency?
The solution to being insolvent is to lie about being insolvent?
There’s a principle in the law called theft by conversion. There’s also quite a bit of black-letter law that makes it illegal to lie on a loan application.
When you sell bonds, you’re borrowing money. If you intentionally and falsely misrepresent your solvency, either by omission or commission, what is that, exactly, in reference to existing law?
Not only is it securities fraud, it’s a clear lie on a loan application, right?
Well, yeah. And while the law is drawn only to count written loan documents, one can certainly argue that an offering of a bond is a “written” document and further, a bond offering is an explicit attempt to borrow money.
“Mr. Christie made a rookie mistake,” Mr. Pietronico said. “The market is very sensitive to the word ‘bankrupt.’”
Oh really? Mr. Christie told the truth and this is a “rookie mistake”?
No, this is what lawful behavior is, unlike the rest of the bankster class who are more than happy to steal your money – or help someone else steal your money – by deceiving you as to the economic conditions of the borrower.
Remember, we have these very same sorts of people who, during the housing bubble, appear to have not only helped borrowers lie about incomes (that is, their economic conditions) they actually did the lying and then asked the borrowers to sign for it, insisting that this was perfectly ok despite the fact that they knew any material misrepresentation on a loan application is a federal offense!
In times of universal deceit, telling the truth will be a revolutionary act.