Baloney.
“So who is going to get left holding the bag?”
The US taxpayers!
What do I win?
“Of course Puerto Rico is just the tip of the iceberg of the coming debt crisis in the western hemisphere, just like Greece is just the tip of the iceberg of the coming debt crisis in Europe.”
There’s about a quadrillion US dollars worth of derivatives out there. Who’s gonna pay all that when the whole system collapses?
Looks to me like it’s time for one of two things: either global depression or hyperinflation (fueled by QEinfinity).
It’s almost like they could benefit from a large military instillation that would bring in millions of dollars a year to their economy...
The problem is not the borrowers not paying. That’s a small problem.
Allowing banks to create money by booking unpayable debt as an asset - that’s a BIG problem.
This article was written by someone who does not understand the first thing about finance.
1. Oppenheimer is not the beneficial owner of the bonds it holds. They belong to investors who bought into the fund, so these investors, and not Oppenheimer, will lose money. If millions of mutual fund investors lose 5% or 10% of their money, it would be bad, but would not be the first time this has happened.
2. Derivatives are generally use to hedge risk, not increase risk. MBIA and Ambac are not stupid. They saw what happened to AIG when they took naked derivative positions, so they have undoubtedly used derivatives to lay off the risk on institutions who have solid balance sheets and can bear the losses.
3. Many Puerto Rican bonds are owned by hedge funds who avowedly take big risks in order to reap big gains. Well, sometimes you lose, too, and they are well aware of this and able to bear the losses.
Puerto Rico is not going to run out of money. They will still collect taxes.
They need to cut their expenses, and they don’t want to do that.
The government treasury is like a lake filled with money. Money flows into the lake (taxes), and money flows out of the lake (expenses).
My guess is that the biggest problem they have is thievery. People are not paying the taxes they should be paying and people are taking money from the treasury when they shouldn’t be.
We all kind of sigh at the rampant thievery in this country, but it’s a huge problem.
If someone is stealing, then the honest people have to pay more for the same product or service.
That leaves honest people with less money which means they have less freedom.
Thieves enslave everyone.
I’m sorry, but we are going to have to start executing thieves in this country. They enslave us and they are not afraid of jail.
Their total debt is less than one month of 4 + years of $85B/month QE.
Puerto Rico is subject to the same minimum wage laws as the rest of the USA.
Disconnecting labor costs from reality causes bad things to happen.
have the puerto ricans started burning all their sh*t down because they’re unhappy? no? hmmmm.
compare the debt per capita between PR and the US.
PR’s debt per capita is half the US.
The government of Puerto Rico has been running a Ponzi Scheme.
The first ones into the scheme do OK.
Coming into the scheme now is just asking for a shellacking.
Since they forced the closing of our naval base down there, what exactly are we getting out of our relationship with them? We already subsidize them to the tune of tens of billions a year. I would tell them to either become a state or bye bye.
If they’re gonna default, they should be put into receivership—and straightened out that way.
It’s not a threat. It’s more of a small distraction. And unfunded liabilities do count (see Greece).
Where is that illusive US Treasury? Can you say Puerto Rico??
http://ppjg.me/2010/04/28/where-is-that-ellusive-us-treasury-can-you-say-puerto-rico/
Note: This article originally appeared 4-28-10. In the brief time that has passed,27 CFR 250.11, cited as the legal definition of the Treasury Secretary has somehow mysteriously and without explanation, been wiped from the Code of Federal Regulations. It has also been wiped from all legal websites carrying copies of CFR and USC. 250.11 was titled definitions and described the Secretary of the Treasury as one in Puerto Rico, and the IRS as an enforcement arm of the IMF>>>>>>>
See also: Treasury Secretary does not work for the United States
THERE IS NO US TREASURY! The US Treasury office, the enforcement agency of the IMF/World Bank, is actually located in Puerto Rico and is not a US agency.
http://ppjg.me/2009/03/24/treasury-secretary-does-not-work-for-the-united-states/
Long ago, I saw a Puerto Rican child in the sixth grade (and very large for that grade) fighting with a much smaller American child. He open his mouth wide and bit the American child in the top of his forehead. The crunch was very audible. He took a large chunk out of that kid’s head and spit it out. I chased him away. Blood squirted for at least a couple of feet from the victim’s head, and he stumbled toward home, only a couple of houses away, crying, shirt, pants and shoes already soaked in blood and leaving a trail.