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Puerto Rico now belongs to Wall Street [Governor Admits Debts Cannot be Paid]
Business Insider ^ | 06/29/2015 | LINETTE LOPEZ AND SHANE FERRO

Posted on 06/29/2015 9:27:01 AM PDT by SeekAndFind

The governor of Puerto Rico has admitted that it can't keep paying down the over $72 billion worth of public debt obligations.

As a result, it finds itself in a uniquely awful position.

It can't go into bankruptcy according to its own laws, so now it has to deal exclusively with its creditors to restructure its debt.

That means it has to deal with Wall Street.

"I think the surprise was that it happened this quickly," said Brian Kelly, CEO of Connecticut-based fund Brian Kelly Capital. "We thought it would take 6 months to a year... the solution is a debt restructuring."

Of course, when you restructure an economy that's already in tatters, its ability to pay is reduced as it struggles to fulfill its obligations. It can be a vicious cycle.

And once you're in the cycle, Kelly said, "the question is: 'Is this the first domino to fall?'"

Here's the situation: Puerto Rico's economy is in recession with a 14% unemployment rate. With little money coming in, legislators were already debating major cuts to its $10 billion budget.

“My administration is doing everything not to default,” Governor Alejandro García Padilla said. “But we have to make the economy grow,” he added. “If not, we will be in a death spiral.”

But growing out of this is not an option.

(Excerpt) Read more at businessinsider.com ...


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events; US: Connecticut
KEYWORDS: bankruptcy; briankelly; briankellycapita; briankellycapital; connecticut; debt; garciapadilla; puertorico; puertoricocrisis
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1 posted on 06/29/2015 9:27:01 AM PDT by SeekAndFind
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To: SeekAndFind

The perfect storm. Debt-busted Governors having to negotiate with Wall Street bankers, resulting in “austerity” cuts to programs and higher taxes. Allowing politicians like Liz Warren who rail against EEEEEEEVIL Wall Street Bankers to find even more of an audience.


2 posted on 06/29/2015 9:29:08 AM PDT by Buckeye McFrog
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To: SeekAndFind

Yikes, those PR bonds are part of a lot of “tax-free” portfolios.


3 posted on 06/29/2015 9:31:07 AM PDT by Fido969
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To: SeekAndFind

How bad does the mismanagement have to be for a territory smaller than Connecticut to get $72 BILLION in debt?


4 posted on 06/29/2015 9:31:49 AM PDT by Blood of Tyrants (A free society cannot let the parameters of its speech be set by murderous Islamists.)
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To: SeekAndFind

[“If not, we will be in a death spiral.”]

Welcome to the party, pal.


5 posted on 06/29/2015 9:33:01 AM PDT by SaveFerris (Be a blessing to a stranger today for some have entertained angels unaware)
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To: Buckeye McFrog

But at least we can forget about ANY thought of statehood for PR


6 posted on 06/29/2015 9:34:18 AM PDT by ken5050
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To: Blood of Tyrants

A fully owned and operated subsidiary of the Democratic Party


7 posted on 06/29/2015 9:35:15 AM PDT by Kozak (Walker / Cruz 2016 or Cruz/ Walker 2016 Either one is good...)
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To: SeekAndFind

Democrat Party Vote buyin’ costs MONEY...

They never said it was THEIR money they were using.


8 posted on 06/29/2015 9:37:44 AM PDT by tcrlaf (They told me it could never happen in America. And then it did....)
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To: Blood of Tyrants

RE: How bad does the mismanagement have to be for a territory smaller than Connecticut to get $72 BILLION in debt?

Puerto Rico’s GDP is $103 Billion. See here:

https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=wHAT+IS+THE+GDP+OF+PUERTO+RICO%3F

Their debt is $72 Billion Over $30 Billion LESS than their GDP and they can’t pay.

Now think about the USA.

The GDP of the USA is $17 Trillion.

Our Debt is $18 Trillion as of June 2015 ( and counting ). HIGHER than our GDP!

The difference is we can PRINT money.

But then, What makes people think we won’t eventually go the way of Puerto Rico whose debt is SMALLER that its GDP?


9 posted on 06/29/2015 9:39:10 AM PDT by SeekAndFind
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To: Blood of Tyrants

Part of it is because they have a bizarre system that puts them partly between independent and US state. And of course, another part is leftwing politics, since the Dems have been romping around PR for ages now.

They had a very good GOP governor a couple of terms ago who did a lot to stabilize their finances and start working on making it a productive place. It has everything it needs: not only is it a beautiful vacation spot, full of history, but most of its residents speak English and Spanish, and it also has the potential for small manufacturing, production of certain tropical crops (vanilla, coffee, etc.) and even perhaps being a Caribbean financial hub.

The thing that defeated the good governor, btw, was the presence of the civil service unions (yes, SEIU), since he wanted to reduce government employment and in fact make government jobs and benefits just like any other jobs, paying on the basis of skills and promoting on the basis of merit. The Dems don’t like that because probably about 50% of their constituency is composed of government employees or lives from government income.


10 posted on 06/29/2015 9:42:28 AM PDT by livius
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To: ken5050

Except that PR doesn’t want to be a state (all the benefits, no responsibilities)...and becoming a state could be a condition for the feds paying that debt off. The Obama might be happy to write a $72,000,000,000 check (bounce? nah, he’ll just borrow $72B from the Federal Reserve) if PR residents vote for statehood, boosting the voter base just before November 2016.

If the Obama is lucky, Texas will secede (taking a comparable chunk of the opposition’s voter base with it), obviating the problem of deciding how to cram 51 stars on the flag.

Democratic candidate wins, Wall Street sighs with relief, the Left is happy, the Right is diminished...sounds like a plan if you’re so inclined (which I’m not).


11 posted on 06/29/2015 9:45:50 AM PDT by ctdonath2 (The world map will be quite different come 20 January 2017.)
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To: SeekAndFind

Actually, the USA belongs to Wall St.


12 posted on 06/29/2015 9:46:21 AM PDT by expat2
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To: AdmSmith; AnonymousConservative; Berosus; bigheadfred; Bockscar; cardinal4; ColdOne; ...

The Obama Recession


to go with

The Obama Tax Hikes


13 posted on 06/29/2015 9:48:41 AM PDT by SunkenCiv (What do we want? REGIME CHANGE! When do we want it? NOW)
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To: SeekAndFind

Bad news for Wall Street


14 posted on 06/29/2015 9:48:44 AM PDT by BenLurkin (The above is not a statement of fact. It is either satire or opinion. Or both.)
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To: SeekAndFind

YEs, but who cares? The Supreme Court said Same Sex Marriages are legal in all 50 States including PR! That’s what’s realy important (sarc)....


15 posted on 06/29/2015 9:48:47 AM PDT by freddy005
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To: SeekAndFind
Politicians continue to kick the can down the street.

Democrats tax and spend and blame Republicans.

When Republicans try to address the problem, they are accused of starving babies, hating women and beating up old people.

16 posted on 06/29/2015 9:51:46 AM PDT by SamAdams76
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To: SeekAndFind

It’s just a matter of time, now.

Somebody should put those numbers side-by side in a bar chart. Maybe a pie chart too.

Might help serve as a wake-up call.

Not that a citizen can do much except try to brace themselves.


17 posted on 06/29/2015 9:53:37 AM PDT by SaveFerris (Be a blessing to a stranger today for some have entertained angels unaware)
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To: livius

Over half the population is on public assistance and the median IQ is 85. The only thing that could help PR is to deport its current inhabitants to the Dominican Republic and repopulate the island with Germans.


18 posted on 06/29/2015 9:55:23 AM PDT by Clemenza (Lurking)
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To: Clemenza

No, not really. I know a lot of Puerto Ricans and have spent time there. The place could be great if they broke the connection with the Democratic Party.

Incidentally, many Puerto Ricans actually are of German descent. There was a big migration there in the 19th century.


19 posted on 06/29/2015 10:02:09 AM PDT by livius
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To: SeekAndFind

Puerto Rico doesn’t “belong” to Wall Street. It belongs to all the special interests and government hand out constituencies who demanded more and more spending beyond the tax revenue that was coming in. It still belongs to these constituencies.


20 posted on 06/29/2015 10:04:27 AM PDT by Opinionated Blowhard ("When the people find they can vote themselves money, that will herald the end of the republic.")
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