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A $26 Billion Gut-Punch and the Oh-Ohs of IOUs

Just goes to show that there's a market for everything. Those state IOUs -- California calls them ''registered warrants,'' but we all know that they're really the Golden State's markers -- have reportedly been popping up for sale on sites like Craigslist.

Some folks have been trying to buy them the way companies buy annuities, offering half or 60% of the face value in cash now, and then they'll cash in when the IOUS mature later. Well, the SEC has decided that the IOUs are ''securities,'' and unless you're authorized to buy and sell securities, you'd better not let eBay handle your finances.

The vague vastness of what it means to cut $26 billion from the budget is finally becoming clearer. Today we talked about specifics for higher education, from community colleges to UC graduate schools -- everything from faculty furloughs and pay cuts to fewer classes with more students in them, and, for the first time ever, Cal State will not be accepting student applications for the spring 2010 semester. Health care to a million poor children might simply end, along with federal matching bucks, and, according to my guest, who handles Calworks in Los Angeles County, families who can now afford a place to live might get booted off the Calworks rolls and onto the streets.

Right now the state's running on fumes, but whenever Sacramento gets around to gassing up the tank on the vehicle of state, it'll be operating at barely half full. How's that for a money metaphor?

And Comedy Congress convened once more, and what was on the agenda? A new instant classic -- South Carolina Governor Mark Sanford's love life with the love of his life, an Argentinian woman [decades ago, a fling with a stripper stage-named the Argentine Firecracker was the downfall of Ways and Means chairman Wilbur Mills], and the maybe/maybe not swan song from Sarah Palin, whose signoff speech was so obscurely phrased and so confusing that I will be looking to buy a Palin-English/English-Palin dictionary.

Hasta Monday!

-- Patt Morrison