Tim Cahill

" Steve's -- from the Boston Globe is -- in the studio with me for the duration of the show this is just fabulous stuff because we have some great great guests who going to be joining us and he's been -- some fabulous practically nonstop reports that you get any -- practically nonstop I thought I was in the -- pretty late last -- my normally I'm calling it in the morning -- you know I'm close to the Senate and our daily -- disease well -- he's -- said he doesn't look like the typical talk radio scrub that we get around here let me tell -- that. So Steve it is great to have it and you know a front page story -- idea that we're gonna go to right now. The state treasurer Tim K though right on the front page are covered by your colleagues at the globe -- Gavin Casey ross'. Tim Tim Kay -- and never seen anything like this what's web logo rectitude -- Good morning mister treasurer. We doing fine and you know -- the Steve's -- Iraq the you know at the worst things get the better it is for attack radio gives us lots to talk about but you know seriously -- treasury where were you this is grim grim stuff. Tell tell our listeners what happened what what you were trying to do yesterday you know as part of your official duties and what you read into."

" We were run over to the process the far more money make local late payment today and the markets froze. We get about a third of the way into what we had hoped to be able to bar yesterday and then to stop and so. That it before the vote."

" And it before the vote in the -- the borrowing just -- listeners know the borrowing that you do to make this big local late payment off big a couple of billion dollars. Going out to the cities and towns at the end of September September 30 the first payment -- the borrowing is fairly routine and you never run into a situation in which. In -- window is closed basically a close of business commonwealth of Massachusetts. They have a good credit rating tax free debt and that -- you know are any other city town a commonwealth as a state can go out give credit."

" Yet about from what I was -- yesterday's about ten billion dollars nationwide it is is tied up right now that. That the Palestinians and they have not -- last couple weeks. A lot of money that -- with the system not paying bills. I mean it is. It is you know the people America you -- that the focus has been that last week and yet they on the stock market but it capital markets that are. They're tied up in just not functioning and causing. That it they're the ripple effect and mean they're going to be more banks going out of business today things though it's error."

" That's -- credit markets and across the board were either the Sloan to almost nonexistent pace or or shut down entirely whether it's. A short term commercial paper dead or even. I was certain to a a bond fund manager that buys and sells corporate bonds and that market was open for work part of the day and once you don't know what's the bill fail that just they stop. Dealing -- traded anymore and it certainly in a situation like you thank you don't. You without winning in into the market and borrow some money at a short time ago on which had to pay up dramatically your interest rates were higher but at least you can get the money. -- an -- you went out yesterday and it at some point doesn't it. -- fortunately it didn't matter which were prepared to pay it just wasn't there."

" That's correct and and forcibly brought to the state if it isn't as we started out barring a month ago. If we hadn't started aren't we that we would normally get which would go up to date or borrow the money. We we would have you know we would be on the air to not be able is that in the that we have about a hundred million dollar in the bank at the end of the day we have not -- money."

" In the treasury you and I both know you can't run the stayed on that not that show what a margin if you only have a hundred million left with the given the scope of operations. -- the governor's people the legislative leadership aware of how closely run this thing was yesterday."

" what are the let the growing yesterday. And told her what we would say. You know is liquidity banks that are shutting down -- downgrade yesterday that's going to -- to -- a couple of week. We have borrowing that we were anticipating doing in our -- which is the revenue which is a note that. You know I I'm not sure what that -- what this all means with a were in -- that having whether or not they insist he is up or. What that the congress that's something on Thursday it's it's it's really in their court at this point an idea. And I was disappointed if that was -- I don't know how you felt but I was shocked that the building happened in I think the markets were shocked and."

" Tim I was just tell us Steve -- is that and office downtown I had a couple of appointments and calls to make and Donna my wife called me of right in the middle of while wanted to appointments and she said did you hear about the vote so. In all of puzzle like furrow my browser and it now know what happened she said congress just voted it down you could've. Knocked me oh -- with a -- I was absolutely stunned by that. -- into he had that what you -- into yesterday. Preceded. The vote. So you are already running into a road block -- closed credit window we essentially. Before congress fumbled this and -- I'm not backing away from my description of this is an incredible. Blonde around by you on behalf of congress they don't have much time to to figure this out before this action begins to to cascade on itself to."

" Yeah and I agree review I have I'm disappointed in in the leadership and in in the members and mean it was just. I know it's tough vote in and it was maybe that's up to vote -- never ever have to take the public that like this they'll like the bailout aspect. But the right thing to do with the vote for it in straight -- they now and we nicknames and the people until later figure this whole thing out who's to blame but is -- does a lot of people who watched with thousands with the party and the country -- Countries suffering that we it was more value lost in the stock market if they'd been almost twice what the 700 billion dollar clock that the fellow."

" Timmy you mentioned that you have here hoping to raise other kinds of -- in the next month or so and and that the state is seemingly almost constantly out raising. Some money for -- barring money for one thing or another. At the beginning of this month you raised over 600 million dollars in general obligation bonds and you were fortunate to get that through -- and ended up. Reaching out to individual investors for much greater. Portion of of that kind of financing than you normally did it it if you had to go button and then raise the money for those general obligations now I mean that would be close as well with net."

" Yeah yeah we work -- fortunately we that we get the window at the right. Just before this thing really closed up but yeah you're right we couldn't do I don't think we could do long term or short term or. That is absolutely stunning to contemplate going to start you know really and we only did. A quarter or are usually last that we did the whole thing at once with Bartlett one point two billion dollars up. And in August of last year but because the market were so I've -- a -- a -- note that much. We've -- what I need that this fiscal year it will go before -- will be able -- it's unprecedented in. In in it's going to it's going to really filtered electorate that will make it -- and -- But all that's dropped -- number."

" December -- let me ask your question Tim listeners are aware of the commonwealth has a little rainy day fund to stabilization fund. What is left in that funded does is that for all intents and purposes the only operating margin have left to look at."

" We've got about two billion dollar thank you leadership -- We have we're going to appreciate that it more today than maybe we did it to type in a lot of -- to spend that. Back in the media that few years ago. It bought two billion dollars and right now we're gonna be under we're already roaring down 300 and million dollars of that. Make it -- as part of our strategy is actually have enough money in the bank yup so. I don't know where else to turn it means that maybe -- go."

" Bad habits are realistically that the market isn't going to stay close and this is a shocking event yesterday that. -- that the market closed down in reaction to that and that that's a temporary thing going forward. The issue isn't going to be whether or not there's money for you to borrow the question is going to be what price can you borrow that money isn't it."

" Hopefully long term yeah I mean you know but but Steve we've seen things that we just didn't think we're gonna happen -- like banks closing. You know investment banks all lost it and -- it lost -- ethnic -- as usual and plot and and though I mean yeah we would expect that at some point these markets opened up but the clock. If you'll be any will be astronomical and then that at a you know that that takes the waded into doing short term or you're paying thirty year rate. The thirty day that just basically and what would paint right now. It is is that the Knick economics -- his -- money up windows though it is going to be a challenge even if the markets open up. Or when they open up a two day because the clock of boring it makes it I'm an economical though. It you rob Peter to pay quality is all the money is going on interest are."

" Tim there are many dominoes that flow from something from events such as yesterday's any the difficulty I have -- And I know the legislature is out of session I'm wondering however in the midst of all this turbulence. Are you picking up any talk about -- the open a reopening of the debate on casino gambling."

" I'm not. I don't -- in that. -- before. You know next year and next is -- it certainly would help but in this -- budget and and to be perfectly artists for the economic on the only. It's probably the worst with the start negotiating. Because we got back the wall and we -- desperate -- of buddy holly if you'd asked me is that with our it would apps. Probably -- honestly did it you know business now right now like everything else. Which has now to kind of -- mean you know in industry used to be a recession proof. But because it's all tied up in the -- and spending in over business. It's been --"

" I think -- and some of his colleagues at the -- written about it you know firewood -- Malik is down. Where I dig down Las Vegas that everything down and they they really don't know how to handle how to respond to a because it is a a novel event for them will speak in a novel events -- you are on the front page. Good for use that he had the foresight to get into those markets side ideas and there are other treasures and other states that a gnashing their teeth today improbably frantic."

" That the that the the very very difficult situation it but you don't wanna. You know the and -- I don't want to do the actual congress have to realize this is right. They cannot but politics that this that they do it so many more days. They gonna be you know it's going to be so it's got a ticket prices slightly out of it and they'll be real pain in the street. People -- losing it making it what it who happen. You know wouldn't get caught up up art and that's when this thing really that are there are -- it. I'm hopeful that they'll put the country ahead of their own political posturing and it is being done and hopefully it's not too late to get there."

" that'd be huge really one last question Steve before I mean Tim before you go Stephen -- to have been talking a little bit. Offline about the banks in the troubles the banks Wachovia picked up yesterday by city for all intents and purposes. -- news today that sovereign for example. Had an extraordinary plunge yesterday dropping 7075%. Of value. By necessity you have relationships with all those institutions. Any implication is that you know the taxpayers of the legislative leadership by the governor should be aware of as those banks go south."

" Well I mean it get it uncharted water we started a couple weeks ago you know seeking collateral patient for our. -- we weren't able -- or collateralized though is the -- there these banks go under. But this is the real problem sovereign. Is politics. And Barack it Arctic caught up in the upright they're commercial bank it in my mind that everything right. And yet if being and so. Everything is being affected by this the good the bad and ugly and that's it points to not many places to run except the Baptist I think this. And we don't want to encourage people to do that but. You that a lot of money in the bank. You've you you've got to be very very -- About state -- that money and you know we're paying attention to that right now with. With all about bank in like with the artwork in our fault -- back and forth this week. But I want spiral we hear another one comes up over it'll be added one debt situation over here and other bank it downgraded and then where we are concerned and and we have a lot of debt in this state in five I've told the legislature and the governor or back and appeared stern went under that we got a -- we've got to prepare for the worst we've got to start cutting up budget. -- because beat it just keep borrowing money to pay bills we've got to use the money that we bring and we don't have it. We've got to cut -- and -- audio Alcoa has not going to build up financially engineer our way out of this problem. That the market to stock analysts do."

" Well Tim you've given us some some great information. Four voting news that this Italy's stance that kind of sobering -- Boris and to say Italy's. We will let you go Tim Cahill the treasurer has been with us for a last couple of minutes Steve siren myself and what are obviously going to continue to take calls when we come back after a short break."