Posted on 06/29/2015 6:43:57 AM PDT by SeekAndFind
The governor of Puerto Rico told the New York Times that the island cannot pay back it's $72 billion debt and will seek permission from its creditors to defer payments.
The news precedes an address by Governor Alejandro Garcia to the Puerto Rican legislature, where he will unveil a budget that cuts about $670 million from a $9.8 billion budget, while setting aside another $1.5 billion to pay the debt.
Gov. Alejandro Garcia Padilla's spokesman, Jesus Manuel Ortiz, confirmed that the island's government is seeking to defer payments while negotiating with creditors.
He confirmed comments by Garcia that appeared in a report in The New York Times published late Sunday, less than a day before Garcia is scheduled to deliver a public address amid debate on a $9.8 billion budget that calls for $674 million in cuts and sets aside $1.5 billion to help pay off the debt. The budget has to be approved by Tuesday.
"There is no other option. I would love to have an easier option. This is not politics, this is math," Garcia is quoted as saying in the Times.
The island's debt figure is four times that of Detroit, according to the Washington Post.
Puerto Rico's bonds were popular with U.S. mutual funds because they were tax-free, but hedge funds and distressed-debt buyers have been stepping in to buy up the debt as the island's economy worsened and its credit rating dropped.
Puerto Rico's constitution dictates that the debt has to be paid before any other financial obligation is met. If Garcia seeks to not pay the debt at all, it will require a referendum and a vote on a constitutional amendment, said Rep. Jenniffer Gonzalez, spokeswoman for the main opposition party.
(Excerpt) Read more at americanthinker.com ...
$72 billion? Some folks became very wealthy.
—This is not politics, this is math,” Garcia is quoted as saying in the Times.—
Too bad we don’t have that attitude in DC.
RE: $72 billion? Some folks became very wealthy.
Bill Gates could save Puerto Rico and still remain a billionaire. I’m waiting for some Democrat to suggest that...
$72 billion? How the hell did they run up that much debt? Neither Puerto Rico nor any of the 50 states or DC should have ANY of their debt paid for by the federal government (i.e., the other states). And the federal government should guarantee NO state’s debt.
The dominos are staring to fall quickly.
For your perusal...
“Puerto Rico’s bonds were popular with U.S. mutual funds because they were tax-free, but hedge funds and distressed-debt buyers have been stepping in to buy up the debt as the island’s economy worsened and its credit rating drop”
This means as their credit rating dropped, they had to pay a higher interest rate on their tax free bonds to attract investors. So, if they declare bankruptcy, they do not have to pay the bond holders. Now, let me ask you, based on what we have been reading about PR for the last few years, would you buy their bonds? Heck no. If some of these bonds were sold twenty years ago, maybe.
So their debt is 72 billion with an annual budget of only 10 billion?
Nice job!
If he goes by the constitution, then that means that the debt gets paid, and the welfare payments don't get paid.
This means the constitution is more likely to go.
There are people who spend the whole day thinking about money.
Some do it as a job.
Some do it as a lifestyle.
Puerto Rico has been running a state government Ponzi Scheme.
If you got in on their bonds early, you probably made some good money.
If you get in late, well, not so good.
I think that we should start to take a closer look at the early investors in Ponzi Schemes.
Yes, the person taking in the money is a shirthead, but maybe some of those early investors are in on the con. Maybe they are Shills leading people into the con.
Forget economic education for our children.
What they need is training in how to spot Con Jobs.
Wait too you get a load of the bailout of California or Illinois.
The house of cards is getting ready to fall.
Peter Schiff recently moved his financial company to PR if I’m not mistaken. Not sure if it was only in legal terms or actually physically moved there.
Taxes were the motivator.
Not criticizing; Mr. Schiff is no slouch in the investment world. His record and his bank account will attest to that.
Just wondering if this came as a surprise (doubtful) to him and if he’ll stay in PR.
That’s what concerns me, too.
The most amazing fact here is that anyone would loan PR $72bil.
RE: The most amazing fact here is that anyone would loan PR $72bil.
Triple Tax free, high yield in an age of negligible interest rates?
Temptation is too big to resist... (until it’s too late ).
Once Puerto Rico is bailed out by the federal treasury, Illinois, California, New Jersey, Maryland, Michigan, and Massachusetts are standing in line.
The public pension chickens are coming home to roost.
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