. . . doesn't think important, can't understand, can't explain, and doesn't want you to think about:
Texas got its . . .
. . . lowest rate ever on a sale of $9.8 billion in short-term notes, which carried an average interest rate of 0.225%.
The Lone Star State, which [sells] the notes every year since 1987 to fund schools and meet other cash-flow needs, beat last year's rate of 0.273%.
. . . .
Last week, California sold $10 billion in short-term notes for similar purposes . . . . California, which is rated lower than Texas, paid 0.33% on a nine-month maturity.
Market participants generally welcome bonds from Texas, which carry long-term triple-A ratings -- the highest possible -- from Moody's Investors Service and Fitch Ratings. . . .
. . . .
The ratings firms noted that Texas's economy has outperformed the rest of the nation recently. Texas's nonfarm employment recovered the nearly 428,000 jobs lost during the recession by December 2011, while the nation as a whole has only recovered [read recovered only] 44% of the jobs lost, S&P says. The state's unemployment rate was 7.2% as of July, better than the 8.3% nationally, according to the federal Bureau of Labor Statistics.
"We would agree with the consensus view that from an economic growth perspective, they're doing very well," said Duane McAllister, co-portfolio manager of the BMO Intermediate Tax Free Fund.
(Mike Cherney, "Texas Snags Its Lowest Rate on One-Year Muni," Wall Street Journal, August 22, 2012)
How boring are interest rates? Well, think of it this way: People have legs; so does capital. Both are capable of migrating from states where they are abused to states where they are treated fairly.
Hence California, flirting with insolvency, pays about 50 percent more for its short-term money.
The Houston Chronicle and its owner, California-based Hearst Corporation, wish relatively prudent Texas were more like spendthrift California.
Go figure.
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