Posted on 01/15/2016 9:05:20 AM PST by Kaslin
Dunnit tho...
the infowarrior
I have friends from Puerto Rico. One keeps trying to sell us her house there!
It is a whole bunch of Moneychangers with their tit in a ringer over Puerto Rico, They deserve to LOSE all of it and go Bankrupt, because that’s what happens when you Gamble!
unfortunately a Whole lot of Government Pensions are heavily invested in this junk through these forms, so you can bet there will be a Bail Out.
The majority of the funds with exposure are municipal bond funds or high yield bond funds. Puerto Rico's bonds have municipal status, meaning they are tax exempt. That's why a lot of retirees buy them.
In total, bond mutual funds hold about $11.3 billion of the island's debt. Another roughly $15 billion is held by hedge funds. The remainder of the debt is held largely by individuals -- mostly Puerto Ricans and mainland Americans.
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Among the funds that hold Puerto Rican debt, some of the largest are run by OppenheimerFunds and Franklin Templeton. For example, the Franklin Double Tax-Free Income Fund (FPRIX) holds nearly half of its investments in Puerto Rican bonds. The fund is down 4.5% this year and has only a 1-star rating out of 5 by Morningstar.
Numerous Oppenheimer Rochester municipal funds hold 15% or more of the fund in Puerto Rican bonds, including the Oppenheimer Rochester MD Municipal Fund (ORMDX), which is down 5% this year and has a 3-star rating from Morningstar.
Probably not.
Goldman Sachs managed or co-managed most of Puerto Rico's bond sales, which means G.S. was paid upfront with a small percentage of all the money that came in.
I don't know how much Puerto Rican debt G.S. may have bought for its own account, but probably not much, since everyone knew that P.R. debt was high risk (more debt than every state except NY and CA!).
Only a small amount (about 10%) is “guaranteed” by P.R.’s national budget.
And any fools who bought P.R. utility bonds and seriously thought that, after a default, P.R. would willingly turn over its electric power plants to bondholders, are so stupid they deserve to lose their money.
Most of it, FROM YOUR ARTICLE, is their MUTUAL FUND, not their proprietary trading desk
One other point.
If it WERE Goldmans’s trading desk and proprietary holdings, a FULL write-off, of $1.3 billion, is about 25% of their net over the past 12 months.
Hardly something that puts you out of business.
What’s funny is they could get Disability IN Puerto Rico for not being able to speak English. They didn’t have to come here an go back. I assume by this time it’s been changed.
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