Trading IOU's

Posting ads to craigslist, collectors have already started seeking out California's IOU warrants. Now Wall Street wants in on the action.

FT.com

Wall Street, quick to spot an opportunity, is also gearing up to trade the payment promises.

“We have a whole team working on it,” said Barry Silbert, chief executive of Second­Market, a company that trades illiquid assets such as bankruptcy claims, private company stock and toxic assets.

Mr Silbert said hedge funds, municipal bond investors and other institutions were interested. Trading volume will depend on how many IOUs the state issues and how long banks accept IOUs for deposit at face value.

Depending on how long this budget mess lasts, we could see a whole market of buying & selling IOU's pop up.

Nice to see that so many people are making money off of our states misery.