Cash4IOUs

San Francisco Chronicle – Investors eye IOUs:

The California IOU has become the prey of so-called vulture investors who hope to profit by buying them on the cheap and redeeming them later. State IOUs, issued starting Thursday, are payable Oct. 2.The first batches of the State of California IOUs.

The idea is that “distressed asset investors” (their nicer name) will pay less than face value to mom-and-pop businesses that receive IOUs but need cash immediately to meet payroll or other expenses. Once the IOUs mature on Oct. 2, the investors will cash them in for their full value plus the 3.75 percent interest the state is offering.

As jwz would say, welcome to the grim meat hook future of bankrupt government.