Monday, June 29, 2015

time to repo puerto rico....,

NYTimes |  Puerto Rico’s governor, saying he needs to pull the island out of a “death spiral,” has concluded that the commonwealth cannot pay its roughly $72 billion in debts, an admission that will probably have wide-reaching financial repercussions.

The governor, Alejandro García Padilla, and senior members of his staff said in an interview last week that they would probably seek significant concessions from as many as all of the island’s creditors, which could include deferring some debt payments for as long as five years or extending the timetable for repayment.

“The debt is not payable,” Mr. García Padilla said. “There is no other option. I would love to have an easier option. This is not politics, this is math.”

It is a startling admission from the governor of an island of 3.6 million people, which has piled on more municipal bond debt per capita than any American state.
A broad restructuring by Puerto Rico sets the stage for an unprecedented test of the United States municipal bond market, which cities and states rely on to pay for their most basic needs, like road construction and public hospitals.

That market has already been shaken by municipal bankruptcies in Detroit; Stockton, Calif.; and elsewhere, which undercut assumptions that local governments in the United States would always pay back their debt.

Puerto Rico’s bonds have a face value roughly eight times that of Detroit’s bonds. Its call for debt relief on such a vast scale could raise borrowing costs for other local governments as investors become more wary of lending.

Perhaps more important, much of Puerto Rico’s debt is widely held by individual investors on the United States mainland, in mutual funds or other investment accounts, and they may not be aware of it.

Puerto Rico, as a commonwealth, does not have the option of bankruptcy. A default on its debts would most likely leave the island, its creditors and its residents in a legal and financial limbo that, like the debt crisis in Greece, could take years to sort out.


Constructive_Feedback said...

Government Of Greece Close Banks For 6 Days To Prevent A Run On Banking Deposits

THE ONLY REASON WHY The UNITED STATES EMPIRE (Domestically) Is Not Experiencing The Very Same Thing (Per Their Present Condition Of Having [Almost] More Debt Amassed Than All Other Nations Combined) IS BECAUSE The US FEDERAL RESERVE [Private Bankers] Are Able To Extend Credit To The Nation That IS The Core Of The World's Financial System's Skyscraper

(NOTE - I DID NOT blame the USA/Federal Reserve nor did I put forth a conspiracy theory. I ONLY spoke of how American citizens are abstracted from what we see going on around the world. Step off of this ship and you too will drown. )

CNu said...

Since no one has the political will to collect or evict, it's all just meaningless conversation....,

BigDonOne said...

You don't suppose the debt problem in Puerto Rico could have anything to do with..... "*lectronic *enefits *ransfer (E*T) is an electronic system that allows a recipient to authorize transfer of their government benefits from a Federal account to a retailer account to pay for products received. EBT is used in all 50 States, the District of Columbia, Puerto Rico, the Virgin Islands, and Guam. [E*T] has been implemented in all States since June of 2004."

Constructive_Feedback said...

The video is informative and should be spread as a cautionary tale about the relation between your "Standard Of Living" being tied to the condition of your nation/state VERSUS how certain promises that you had your hopes vested in could change based on future conditions.

The only thing I disagree with NBR upon is that Tyler M said "Investors wonder if the debt will ever be paid back".

This is not accurate.
It is more accurate to focus on the INTEREST DEBT being paid in a timely manner.

The US bonds, by comparison IS NEVER going to be paid back. ($17 trillion).
The only thing keeping the US floating is the INVESTOR CONFIDENCE of the relative safety that they will receive their interest payments AND that any "US Treasury bonds" that they hold can be exchanged with a willing buyer.

BigDonOne said...

Parásitos con transferencia electrónica de beneficios....