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Puerto Rico Restructure

Gladiator

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"The legislation establishes a seven-member control board to oversee negotiations with creditors and the courts over reducing some debt. It does not provide any federal taxpayer funds to reduce that debt.

The PROMESA bill would also require the territory to create a fiscal plan to bring the island back from its current financial situation. Among other requirements, the plan would have to provide "adequate" funds for public pensions, which the government has underfunded by more than $40 billion. "


Congress Passes PROMESA Act for Puerto Rico Debt Crisis - NBC News



//
 
"The legislation establishes a seven-member control board to oversee negotiations with creditors and the courts over reducing some debt. It does not provide any federal taxpayer funds to reduce that debt.

The PROMESA bill would also require the territory to create a fiscal plan to bring the island back from its current financial situation. Among other requirements, the plan would have to provide "adequate" funds for public pensions, which the government has underfunded by more than $40 billion. "


Congress Passes PROMESA Act for Puerto Rico Debt Crisis - NBC News



//

Sounds like a bailout, what is the gourd against Puerto Rico doing the same thing after we get them fixed. Not that they can even get fixed as thier whole economy was based on a big ponzi scheme.
 
They got themselves into trouble...let them get themselves out of it.

When you bail out people, they often just get themselves even deeper.

You don't give money to people who are awful at having it. You give them sympathy and humanitarian aid...but you NEVER give them cash.
 
"The legislation establishes a seven-member control board to oversee negotiations with creditors and the courts over reducing some debt. It does not provide any federal taxpayer funds to reduce that debt.

The PROMESA bill would also require the territory to create a fiscal plan to bring the island back from its current financial situation. Among other requirements, the plan would have to provide "adequate" funds for public pensions, which the government has underfunded by more than $40 billion. "


Congress Passes PROMESA Act for Puerto Rico Debt Crisis - NBC News



//

It would be a good point to get rid of social spending and switch to a minimum income system.
 
So what was the $70 billion spent on anyway?
 
So what was the $70 billion spent on anyway?

"The Puerto Rican government failed to pay almost half of $2 billion in bond payments due Friday, marking the commonwealth’s first-ever default on its constitutionally guaranteed debt.

Gov. Alejandro García Padilla defended the historic decision by highlighting the island’s tense relationship with Wall Street firms that own its debt.

Some of these firms stand to lose money as a result of Friday’s nonpayment. Major insurers backing Puerto Rico’s debt could also be forced to pay out as much as hundreds of millions of dollars to bondholders."


"President Barack Obama signed legislation Thursday that addressed the island’s debt crisis but didn’t provide any mechanism to avoid Friday’s default. Instead, the law gives the island a stay against creditor litigation."


"One creditor affected by Friday’s actions is Eaton Vance Management, which holds a few million dollars in general obligation debt. But “for us it’s a non-event,” said Craig Brandon, Eaton Vance ’s co-director of municipal investments, because the firm expects to receive full principal and interest payments from insurers."


"Assured Guaranty said in a statement that it is well prepared to handle defaults in Puerto Rico. “Our liquidity and capital position are very strong,” the statement said. National Public Finance Guarantee, a unit of MBIA, declined to comment.

The island has been in a recession for most of the past decade and has seen a large drop in its population as residents, who are U.S. citizens, leave for the mainland."






Puerto Rico Defaults on Constitutionally Guaranteed Debt - WSJ



//
 
So what was the $70 billion spent on anyway?

That is my question as well. Perhaps it is classifed as a loan (to let PR pay what is now due) since PR is going to be in such wonderful shape after the restructire committee of gurus fixes everything. ;)
 
"The Puerto Rican government failed to pay almost half of $2 billion in bond payments due Friday, marking the commonwealth’s first-ever default on its constitutionally guaranteed debt.

Gov. Alejandro García Padilla defended the historic decision by highlighting the island’s tense relationship with Wall Street firms that own its debt.

Some of these firms stand to lose money as a result of Friday’s nonpayment. Major insurers backing Puerto Rico’s debt could also be forced to pay out as much as hundreds of millions of dollars to bondholders."


"President Barack Obama signed legislation Thursday that addressed the island’s debt crisis but didn’t provide any mechanism to avoid Friday’s default. Instead, the law gives the island a stay against creditor litigation."


"One creditor affected by Friday’s actions is Eaton Vance Management, which holds a few million dollars in general obligation debt. But “for us it’s a non-event,” said Craig Brandon, Eaton Vance ’s co-director of municipal investments, because the firm expects to receive full principal and interest payments from insurers."


"Assured Guaranty said in a statement that it is well prepared to handle defaults in Puerto Rico. “Our liquidity and capital position are very strong,” the statement said. National Public Finance Guarantee, a unit of MBIA, declined to comment.

The island has been in a recession for most of the past decade and has seen a large drop in its population as residents, who are U.S. citizens, leave for the mainland."






Puerto Rico Defaults on Constitutionally Guaranteed Debt - WSJ



//

Plenty of information that does a lot but doesn't answer my question. What was the $70 billion spent on? Is there a highway, port, airport, building, etc. that was purchased? I noticed nothing like that during my last visit.
 
It would be a good point to get rid of social spending and switch to a minimum income system.

Our gov't will bail out the Big Banks. Austerity in PR will follow. Same ol' crap, different day. The banks made bad investment decisions, let the banks suffer.
 
Our gov't will bail out the Big Banks. Austerity in PR will follow. Same ol' crap, different day. The banks made bad investment decisions, let the banks suffer.

Bailing out large banks is fine, if the top managers lose their jobs and assets and shareholders lose their money.
 
Plenty of information that does a lot but doesn't answer my question. What was the $70 billion spent on? Is there a highway, port, airport, building, etc. that was purchased? I noticed nothing like that during my last visit.

"Puerto Rico's governor announced a $1.4 billion cut in public spending on Tuesday as the commonwealth government agencies braced for measures that will be taken to produce the first balanced budget in years.

Governor Alejandro Garcia Padilla unveiled his $9.64 billion budget proposal for 2015 in an address to the legislature that included a $775 million payment for Puerto Rico's long-term debt.

The current general fund budget is $9.835 billion for fiscal year 2014, which runs through June 30.

"We are beginning to pay for today's expenses with today's earnings. This balanced budget complies with my commitment to prepare a budget without deficit financing nor refinancing of debt," the governor said."

UPDATE 1-Puerto Rico governor announces $1.4 billion budget cut | Reuters

https://www.google.com/?#q=Puerto+Rico+cuts+Government+spending



"The spending cuts are being accomplished through an across-the-board-cut that averages about 8 percent for most government agencies, except for the Police Department and University of Puerto Rico. The plan includes $775 million for debt service.

While claiming to be the first balanced budget in two decades, the government will rely on $269 million in debt financing from a $3.5 billion March bond issue for interest payments due this year. Another bill approved as part of the budget would allow agencies to postpone payments due to the Government Development Bank, which will save $75 million this year.

An analysis by the Center for a New Economy, a local think tank, has identified $300 million in projected savings and revenue that it believes the government will not be able to realize."

Puerto Rico governor signs $9.56 bln budget for 2015 | Reuters


https://www.google.com/?#q=Puerto+Rico+2014+Budget


Under-employment 40% looking

https://www.google.com/?#q=crime+rates+puerto+rico


"The House opposed the Governor's proposed rate of the sales tax, suggesting a lower rate. While Governor Acevedo Vilá proposed a global 7% rate, the House instead proposed a global 5.5% rate. The House also proposed a 5% corporation tax, but the Governor has argued that this would violate a number of tax incentive contracts with American corporations,[citation needed] and that it may even violate the Constitution of Puerto Rico.[citation needed]

In a televised address on 27 April, Governor Acevedo Vilá announced that most of the government agencies would be shut down beginning 1 May, and would remain closed unless the House approved the economic plan. Government activities relating to health and security (including hospitals and police stations) would remain open, although medical professionals questioned whether hospitals would function if staff went unpaid and also raised the issue of government-funded prescriptions, whilst private security firms on contract to the government said they might cease work if the government did not pay what it owes them.[1]

Senate President Kenneth McClintock said that the shutdown was unnecessary since the government had enough funds to continue paying public workers until the first week of June and that under no circumstance should public schools be shut down.[2] NPP President Pedro Rosselló said he did not think Governor "

https://en.wikipedia.org/wiki/2006_Puerto_Rico_budget_crisis

https://www.google.com/?#q=Police+Budget+Puerto+Rico





//
 
"The legislation establishes a seven-member control board to oversee negotiations with creditors and the courts over reducing some debt. It does not provide any federal taxpayer funds to reduce that debt.

The PROMESA bill would also require the territory to create a fiscal plan to bring the island back from its current financial situation. Among other requirements, the plan would have to provide "adequate" funds for public pensions, which the government has underfunded by more than $40 billion. "


Congress Passes PROMESA Act for Puerto Rico Debt Crisis - NBC News



//

So, I borrow a bunch of money for stuff I can't afford, and when the creditor comes looking for his money I say, "I'm declaring myself free from the shackles you have placed on me." What a bunch of crap. What a bunch of trash these people are.

Bond holders and the firms who insure them will take it in the pants. One way to guarantee that Puerto Rico never borrows money again.
 
They got themselves into trouble...let them get themselves out of it. When you bail out people, they often just get themselves even deeper.
You don't give money to people who are awful at having it. You give them sympathy and humanitarian aid...but you NEVER give them cash.
A government is not an individual person with thoughts and ability to self-reflect and learn. Who exactly are you trying to teach a "lesson" to? The politicians culpable for the mess have long since been kicked out of office. The only punishment you'd be meting out to now would be on schools, the police, retirees and the poor. People who had no responsibility for bad decisions.
 
Last edited:


This fellow imputes all sorts of implications for this default, such as all "US Corporate Treasury Bonds are now absolutely worthless". I'm finding no confirmation of this. Rather, the implications are restricted to the bond holders, mainly large firms like Franklin Templeton and Oppenheimer, and those who insure them.

These Puerto Rican bonds were not backed by any guarantees from the US government even if they were issued by the US State Department. As far as I can tell, everyone understood that they were backed by Puerto Rico's faith and credit albeit the risk was thought to be less because bankruptcy isn't possible in a US territory for this kind of debt. The risk from Puerto Rico does not extend to other US territories, either, as this fellow seems to imply. The bonds from each of these territories are backed by the respective territories, so what they are worth depends entirely on the faith and credit of the territory in question.

Here's a summary from the WSJ. No mention of any risk to the US government or to other US territories is contained therein:

Puerto Rico Defaults on Constitutionally Guaranteed Debt - WSJ

This fellow needs to invest in some video software, too. ;)
 
"Puerto Rico's governor announced a $1.4 billion cut in public spending on Tuesday as the commonwealth government agencies braced for measures that will be taken to produce the first balanced budget in years.

Governor Alejandro Garcia Padilla unveiled his $9.64 billion budget proposal for 2015 in an address to the legislature that included a $775 million payment for Puerto Rico's long-term debt.

The current general fund budget is $9.835 billion for fiscal year 2014, which runs through June 30.

"We are beginning to pay for today's expenses with today's earnings. This balanced budget complies with my commitment to prepare a budget without deficit financing nor refinancing of debt," the governor said."

UPDATE 1-Puerto Rico governor announces $1.4 billion budget cut | Reuters

https://www.google.com/?#q=Puerto+Rico+cuts+Government+spending



"The spending cuts are being accomplished through an across-the-board-cut that averages about 8 percent for most government agencies, except for the Police Department and University of Puerto Rico. The plan includes $775 million for debt service.

While claiming to be the first balanced budget in two decades, the government will rely on $269 million in debt financing from a $3.5 billion March bond issue for interest payments due this year. Another bill approved as part of the budget would allow agencies to postpone payments due to the Government Development Bank, which will save $75 million this year.

An analysis by the Center for a New Economy, a local think tank, has identified $300 million in projected savings and revenue that it believes the government will not be able to realize."

Puerto Rico governor signs $9.56 bln budget for 2015 | Reuters


https://www.google.com/?#q=Puerto+Rico+2014+Budget


Under-employment 40% looking

https://www.google.com/?#q=crime+rates+puerto+rico


"The House opposed the Governor's proposed rate of the sales tax, suggesting a lower rate. While Governor Acevedo Vilá proposed a global 7% rate, the House instead proposed a global 5.5% rate. The House also proposed a 5% corporation tax, but the Governor has argued that this would violate a number of tax incentive contracts with American corporations,[citation needed] and that it may even violate the Constitution of Puerto Rico.[citation needed]

In a televised address on 27 April, Governor Acevedo Vilá announced that most of the government agencies would be shut down beginning 1 May, and would remain closed unless the House approved the economic plan. Government activities relating to health and security (including hospitals and police stations) would remain open, although medical professionals questioned whether hospitals would function if staff went unpaid and also raised the issue of government-funded prescriptions, whilst private security firms on contract to the government said they might cease work if the government did not pay what it owes them.[1]

Senate President Kenneth McClintock said that the shutdown was unnecessary since the government had enough funds to continue paying public workers until the first week of June and that under no circumstance should public schools be shut down.[2] NPP President Pedro Rosselló said he did not think Governor "

https://en.wikipedia.org/wiki/2006_Puerto_Rico_budget_crisis

https://www.google.com/?#q=Police+Budget+Puerto+Rico





//

Why respond with extraneous information. Here is my question, you can either respond with the answer it I would request that you not respond at all to me:

What was the $70 billion in debt spent on?
 
This fellow imputes all sorts of implications for this default, such as all "US Corporate Treasury Bonds are now absolutely worthless". I'm finding no confirmation of this. Rather, the implications are restricted to the bond holders, mainly large firms like Franklin Templeton and Oppenheimer, and those who insure them.

These Puerto Rican bonds were not backed by any guarantees from the US government even if they were issued by the US State Department. As far as I can tell, everyone understood that they were backed by Puerto Rico's faith and credit albeit the risk was thought to be less because bankruptcy isn't possible in a US territory for this kind of debt. The risk from Puerto Rico does not extend to other US territories, either, as this fellow seems to imply. The bonds from each of these territories are backed by the respective territories, so what they are worth depends entirely on the faith and credit of the territory in question.

Here's a summary from the WSJ. No mention of any risk to the US government or to other US territories is contained therein:

Puerto Rico Defaults on Constitutionally Guaranteed Debt - WSJ

This fellow needs to invest in some video software, too. ;)

I will set time aside to educate myself on how these mechanisms work. As far as video software upgrade, I don't think it will happen, the fellow seems like to keep it kitchen table talk style.
 
Why respond with extraneous information. Here is my question, you can either respond with the answer it I would request that you not respond at all to me:

What was the $70 billion in debt spent on?

The question of what the $70 Billion was spent on, deserves an answer.

Page 125 contains some of the Government expenditures.

http://www.bgfpr.com/documents/CommonwealthReport-October302014.pdf


Basically the money was spent on ordinary governmental services. Police, Fire, Highway, Sewer, Electricity and debt service.

The problem was that the projections of revenue fell short, and each year the expenses surpassed the revenues. There was a real decrease in revenue over the past 15 years.

The information is not easily found on the internet, which may be a problem with PR Budget transparency.


//
 
"The Puerto Rican government failed to pay almost half of $2 billion in bond payments due Friday, marking the commonwealth’s first-ever default on its constitutionally guaranteed debt.

Gov. Alejandro García Padilla defended the historic decision by highlighting the island’s tense relationship with Wall Street firms that own its debt.

Some of these firms stand to lose money as a result of Friday’s nonpayment. Major insurers backing Puerto Rico’s debt could also be forced to pay out as much as hundreds of millions of dollars to bondholders."


"President Barack Obama signed legislation Thursday that addressed the island’s debt crisis but didn’t provide any mechanism to avoid Friday’s default. Instead, the law gives the island a stay against creditor litigation."


"One creditor affected by Friday’s actions is Eaton Vance Management, which holds a few million dollars in general obligation debt. But “for us it’s a non-event,” said Craig Brandon, Eaton Vance ’s co-director of municipal investments, because the firm expects to receive full principal and interest payments from insurers."


"Assured Guaranty said in a statement that it is well prepared to handle defaults in Puerto Rico. “Our liquidity and capital position are very strong,” the statement said. National Public Finance Guarantee, a unit of MBIA, declined to comment.

The island has been in a recession for most of the past decade and has seen a large drop in its population as residents, who are U.S. citizens, leave for the mainland."






Puerto Rico Defaults on Constitutionally Guaranteed Debt - WSJ



//

The answer to this is to sell the things they are building to the u.s.a. or creditors or whomever. this will see them completed, and the country could stand to make some capital. with this capital, they could invest in new buildings, or, pay back the money, but i suggest they have a little more time to build new buildings and then pay the money back slowly while the money is 'being made more.'

Alternatively, they could sell america 'waste goods.' hell, they could sell everybody waste goods! this would see them take all that fruit they make, and, before it perishes, sell it. then they could also do this with excess orders of electronics and motor cars, that will bring in some capital too.
 
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