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Puerto Rico announced a historic restructuring of its public debt on Wednesday, touching off what may be the biggest bankruptcy ever in the $3.8 trillion U.S. municipal bond market.
While it was not immediately clear just how much of Puerto Rico's $70 billion of debt would be included in the bankruptcy filing, the case is sure to dwarf Detroit's insolvency in 2013. The move comes a day after several major creditors sued Puerto Rico over defaults its bonds.
Bankruptcy may not immediately change the day-to-day lives of Puerto Rico's people, 45 percent of whom live in poverty, but it may lead to future cuts in pensions and worker benefits, and possibly a reduction in health and education services. The island's economy has been in recession for nearly 10 years, with an unemployment rate of about 11.0 percent, and the population has fallen by about 10 percent in the past decade.
The bankruptcy process will also give Puerto Rico the legal ability to impose drastic discounts on creditor recoveries, but could also spook investors and prolong the island's lack of access to debt markets.
The debt restructuring petition was filed by Puerto Rico's financial oversight board in the U.S. District Court in Puerto Rico on Wednesday, and was made under Title III of last year's U.S. Congressional rescue law known as PROMESA.
The Title III provision allows for a court debt restructuring process akin to U.S. bankruptcy protection. Puerto Rico is barred from a traditional municipal bankruptcy protection under Chapter 9 of the U.S. code.
The filing includes only Puerto Rico's central government, which owes some $18 billion in debt backed by the island's constitution. On paper, it does not include $17 billion of sales tax-backed debt, known as COFINA debt, or debt from other agencies.
But those debts are likely to be pulled into the bankruptcy, or included in separate bankruptcy proceedings in coming days, Elias Sanchez, an adviser to Governor Ricardo Rossello, told Reuters on Wednesday. Puerto Rico's massive pension debts will also likely get restructured in the bankruptcy. "Title III was especially compelled by the commonwealth's need to restructure $49 billion of pension liabilities," the oversight board said in Wednesday's filing.
-- submitted from IRC
(Score: 1, Funny) by Anonymous Coward on Sunday May 07 2017, @04:46AM (1 child)
Puerto Ricans are half black and half latino so they are brown enough to have super elite tech skills. Import the next imperial ton of tech workers from Puerto Rico and the island economy will be magically fixed as soon as the techs sent half of their Silicon Valley pay back home to abuela. No. Wait. Puerto Ricans are American citizens. Americans have absolutely no place in the tech industry. Forget it!
(Score: -1, Troll) by Ethanol-fueled on Sunday May 07 2017, @06:14AM
Tax those puto rican mayates ruidos.
(Score: 3, Informative) by Runaway1956 on Sunday May 07 2017, @04:55AM (11 children)
"the case is sure to dwarf Detroit's insolvency in 2013"
Detroit is just one shitty little city, on a lakefront. Puerto Rico is a state sized island. Detroit, 142.9 mi² vs Puerto Rico, 3,515 mi². Population of Detroit, 680,000 (in 2014, probably less now, LMAO) population of Puerto Rico, 3.474 million.
It seems presumptuous to compare Detroit to Puerto Rico.
(Score: 0) by Anonymous Coward on Sunday May 07 2017, @05:20AM (7 children)
Detroit, then Peurto Rico, then? The US? Seems "they" are testing larger entities. "Foil hats on!" "Sir, yessir!"
(Score: 0) by Anonymous Coward on Sunday May 07 2017, @05:56AM (1 child)
Won't work.
*We* can print money. They can't.
(Score: 0) by Anonymous Coward on Sunday May 07 2017, @01:39PM
Neither can Ireland, the Puerto Rico of Europe.
(Score: 2, Interesting) by khallow on Sunday May 07 2017, @07:31AM (4 children)
(Score: 1) by anubi on Sunday May 07 2017, @07:40AM
They will just pass a bond issue or another gas tax, then raid the tax. You know, something that they can tax but not have it placed on the ballot.
"Prove all things; hold fast that which is good." [KJV: I Thessalonians 5:21]
(Score: 0) by Anonymous Coward on Sunday May 07 2017, @01:44PM
Illinois in financial trouble? Why would that be? Surely it's not the fact that they haven't had a proper state budget since June 30, 2015?
(Score: 3, Informative) by Thexalon on Sunday May 07 2017, @01:46PM (1 child)
I'm unclear why you think California is headed towards bankruptcy, seeing as how their debt burden has been going down [statedatalab.org] over the last few years.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 1) by khallow on Sunday May 07 2017, @09:33PM
I'm unclear why you think California is headed towards bankruptcy, seeing as how their debt burden has been going down over the last few years.
I disagree that their debt burden is going down. They are nowhere near the state they were in prior to the recent recession. Even in 2009, they had a quarter smaller debt burden than they do now. The nature of the liabilities they have, massive, underfunded public pensions, results in huge increases in liabilities whenever a recession happens. So when the next recession hits, they'll see another sudden increase in debt burden. I bet that will swamp the tepid improvements since 2011.
The trick here is to recover enough between recessions to cover those dives. I don't see that happening. And if things get bad enough, they'll have trouble keeping people in the state. They already have a huge emigration rate. All that is needed is for immigration to collapse and that debt burden (which is per taxpayer) goes up.
(Score: 1, Touché) by Anonymous Coward on Sunday May 07 2017, @05:21AM (1 child)
> It seems presumptuous to compare Detroit to Puerto Rico.
And yet. you just did and in far greater detail than the submitter who accurately used the term "dwarf."
(Score: 0) by Anonymous Coward on Sunday May 07 2017, @08:23PM
Isn't the correct term vertically challenged?
(Score: 2) by JoeMerchant on Sunday May 07 2017, @04:22PM
Yes, but Vermont (or any similar sized entity) hasn't defaulted on the US Municipal Bond market, yet.
Didn't Los Angeles come close once?
🌻🌻 [google.com]
(Score: 1, Insightful) by Anonymous Coward on Sunday May 07 2017, @04:59AM (10 children)
Ten years of recession coincides with the Great Recession which so many of us deny is still happening today. Actually it's just the lucky fuckers with jobs who are recession deniers and they have their stubborn heads firmly lodged up their rich asses. One wonders how much the unemployment rate of 11% has been fudged and how bad unemployment really is.
(Score: 5, Informative) by Runaway1956 on Sunday May 07 2017, @05:39AM (9 children)
"lucky fuckers with jobs"
I've got a job. It isn't a bad job, it isn't a good job - it's a job. It pays the bills, with some left over. I compare my pay to my pay in the middle 1990's, and it sucks. I actually make less money than I did then. Many, but not all, grocery items have increased in price. Gasoline is back down near 1990's levels. Electricity has gone up - at least three times since then. (Overall, I think the price has increased by slightly less than 20%, but I'm not digging for numbers.) Household items - pots, pans, small appliances, etc - have probably decreased in price, by a small amount, but everything is made in China. Frivolities (those things no one really needs, but everyone wants) have maybe gone up in price a little. Well - cellphones. My extended family seems to spend a small fortune on phones. None of that shit is "needed". One of my stepsons bought a phone recently, for about ~$180. He came in the house today to tell his mother that he broke the damned thing. Yes, he'll spend the money to get another real soon, and probably bum the money from the wife. (Mothers are so gullible!)
You really don't have to be jobless to understand that the economists are blowing smoke up our asses.
There MAY BE some light at the end of the tunnel. My employer has recently cut loose with some small raises. More raises are promised. If a major international manufacturer is promising money, then MAYBE there is hope for the economy.
On the other hand, that same employer is going to eliminate almost 200 jobs in the region. Closing up two warehouses, and building a new automated warehouse accounts for most of those 200. Automation is going to get a few production jobs, as well. So, if there is light up ahead, it's a rather dim light. They're going to pay ~800 people a little bit more, but put ~200 out of work.
(Score: 2) by drussell on Sunday May 07 2017, @09:21AM (6 children)
You really don't have to be jobless to understand that the economists are blowing smoke up our asses.
Dude, You're confused... It's not the economists that are screwing things up!
:facepalm:
(Score: 5, Insightful) by Runaway1956 on Sunday May 07 2017, @09:52AM (5 children)
Yes, and no. Few if any economists actually have the means to screw up the economy. But, they do come up with some crazy ideas about what a "healthy" economy is. They also lend credibility to the various politicos and/or rich bastards who do have the means to screw with the economy. And, then, they make excuses, when they aren't outright lying to you about the state of the economy. So, yeah, they are blowing smoke up our asses. If the economists were honest with us, we would probably have revolted long ago. Maybe late in the '50's, or early in the '60's? "The economy is screwed up, people, but government is relying on the Military Industrial Complex to keep that economy afloat. Currently, the US makes more money from killing people, than from personal income taxes, or from corporate income taxes."
(Score: 0) by Anonymous Coward on Sunday May 07 2017, @10:28AM (4 children)
We must be patient with Runaway. He still thinks that Republicans support his interests. So not unusual that he blame economists, proctologists, SJWs and Hillary for his own economic, um, shortcomings. But he will start to understand, once Trump really gets going. But then it will be much too late. Poor Runaway! Poor, poor, poor Runaway!
(Score: 2, Interesting) by Runaway1956 on Sunday May 07 2017, @11:34AM (3 children)
No, it's you who people have to be patient with. Runaway is no Republican, he doesn't trust Republicans, he doesn't vote Republican by choice. In your own tiny little mind, there is only room for "us and them", "Democrat or Republican". I hate to be the one to disillusion you, but there is a vast spectrum of political positions. It isn't all "left or right". If you dare to explore, you might check out some of these pages:
http://www.gotoquiz.com/politics/political-spectrum-quiz.html [gotoquiz.com] Appears to be pretty damned simplistic - the choices on the front page refer to left, neocon, and moderate. Typical American type of quiz.
https://www.politicalcompass.org/test [politicalcompass.org] That is a much more meaningful test, with far more meaningful results, and some definition given to the spectrum. Take the test, you may be surprised at yourself.
https://buildquorum.com/political_spectrum [buildquorum.com] Looks American-centric, but somewhat better than that first over simplistic pile of shit. That one tells me that I'm a "populist leaning liberal". Doesn't THAT blow your mind? I didn't promise that it would be good, or that it would be accurate, I only promised that it's better than the first pile of shit.
Feel invited: LEARN ABOUT THE POLITICAL SPECTRUM BEFORE RUNNING YOUR MOUTH ABOUT WHAT YOU THINK I MIGHT BE!!
For 43 years now, I've possessed a card that proclaims me to be "Independent". Never once have I possessed a similar card with either "Republican" or "Democrat" on it. Never once. Please stop referring to be as a Republican.
(Score: 0) by Anonymous Coward on Sunday May 07 2017, @03:42PM (2 children)
he doesn't vote Republican by choice
But if they still get your vote, then what does it matter if you say you're not a republican?
(Score: 3, Informative) by Runaway1956 on Sunday May 07 2017, @03:53PM (1 child)
*SOMETIMES* the best choice for an office is a Democrat - so I have voted for democrats sometimes. *SOMETIMES* the best choice is a Republican - so I have voted for some Republicans. *SOMETIMES* the best choice is third party - so I have often voted third party. And, *SOMETIMES* the best choice for an office is *NOFUCKINGBODY* and/or a writein - so I have left boxes on the ballot blank, or I have filled them in with an underdog's name, and I have even written in cartoon characters to show my contempt for the choices available.
I don't vote party line. This last election is as near as I have ever voted a party line. There was a runner for president from the Libertarian party, I had a Libertarian choice for the Senate, and there were a couple Libertarians running in state and local offices. I voted ONE candidate in a minor office from the two major parties, and it doesn't even matter which party that was. I voted AGAINST every single incumbent who was uncontested.
Now, do you get the idea? I'm not a Republican. If you care to accuse me of being conservative, I'll accept that accusation graciously. You may accuse me of being somewhat authoritarian - that would be accurate. You MAY NOT affiliate me with either of the shit parties that play musical chairs in our capitals every couple of years. I detest them both, but I detest the "progressive" party more. The R's are only slightly the lesser evil, in comparison to the D's.
(Score: 0) by Anonymous Coward on Sunday May 07 2017, @09:23PM
Poor, poor, poor, even more poor Runaway. He thinks he's an independent, but just look as his usual sources for news. Brietbarf? Washing the Bacon? Yep, Republican. The first step, Runaway, is admitting you are the problem.
(Score: 2) by JoeMerchant on Sunday May 07 2017, @04:34PM (1 child)
If management didn't lower overall expenses while growing the top-line income numbers, they wouldn't be doing their jobs... it's what was promised in the acquisition (your situation may vary, slightly, but the sentiments are universal.)
About the cost of cell-phones ~ 20 years ago, I got a Ham license and a couple of handheld tri-bands so I could hit the local 2m and 70cm repeater towers - no monthly fees, handsets were a little pricey, but within a year they were cheaper than two cellular contracts' payments. Theoretically, they could patch into the POTS - a blind guy at University had that setup for his and nobody bothered him about it, but it was clearly outside the rules.
Finally, we bought a cheap used car and considered a "real" cell-phone as breakdown insurance, cheaper than buying something more confidence inspiring (though, in practice, the car never did break down.) Once the first baby came around, had to get the second line - can't have a husband/father without a leash, can we?
What people are buying today aren't communication devices, they're portable super-computers. It's just that nobody in 1990 realized that they might want to carry one around, it took Facebook and Instagram to market that desire into the mainstream. I won't bother quoting how expensive, bulky and underpowered computers of the 1990s were in comparison to a $199 no-contract Nexus 5x.
So, cell-phones "saved" thousands of dollars by enabling the use of dodgy used cars, and now they're "saving" thousands more by providing stupid amounts of computer power and network connectivity for a low low $39 per month per line. Too bad all that computer power hasn't produced a solution for global warming or overpopulation yet - if it eventually does, it will have been a bargain - the way nuclear weapons were so much better than fighting WWIII without them.
🌻🌻 [google.com]
(Score: 3, Insightful) by HiThere on Sunday May 07 2017, @05:31PM
It may actually be helping with overpopulation. It's hard to be certain, but evidence seems to show that when there are more flashy things to buy people tend to have fewer children.
Javascript is what you use to allow unknown third parties to run software you have no idea about on your computer.
(Score: 3, Informative) by richtopia on Sunday May 07 2017, @06:48AM (1 child)
I understand of being skeptical of comedians providing news, but John did a main segment on Puerto Rico's debt a year ago, which is entertaining and informative.
https://www.youtube.com/watch?v=Tt-mpuR_QHQ [youtube.com]
(Score: 0) by Anonymous Coward on Sunday May 07 2017, @02:56PM
See? It was fake news.
(Score: 3, Disagree) by bradley13 on Sunday May 07 2017, @08:00AM (3 children)
Every government should, at the most fundamental level possible (Constitution, or similar), be required to run a balanced budget. There is just no excuse to allow a government to build up debt - spending "other people's money" is bad enough, but spending money that doesn't even exist? Insane.
Keynesian economics has been debunked so many times that it's not funny. Politicians still want to believe in it, because it gives them an excuse for pork.
Everyone is somebody else's weirdo.
(Score: 0) by Anonymous Coward on Sunday May 07 2017, @09:15AM (1 child)
There is just no excuse to allow a government to build up debt - spending "other people's money" is bad enough, but spending money that doesn't even exist? Insane.
This is what happens when you let business people, business majors, try to deal with government and economics! They cannot get their head out of their own asses far enough to see the big picture! Let me explain it to you: deficits don't matter! Money is not real! Wealth is an illusion and you are chasing a pot at the end of the rainbow because you are so egotistical and self-centered that you probably think khallow is a reasonable fellow! Well, we are coming for you. We are taking all your money. After you are dead, we will fuck your money. Four generations after you die, you money will no longer be identifiable. And you will be forgotten. But seriously, dude, there is no excuse for anyone to be such an asshole. Lighten up, Bradley!
.
(Oh, wait, 13 is your age? God, don't tell me you have read both Fountainhead and Atlas Shrugged? You did? Do you want to grow up to be the asshole Paul Ryan? Or the not quite so much an asshole Rand Paul? You could be Ru Paul, better choice.)
(Score: 2, Insightful) by anubi on Sunday May 07 2017, @10:32AM
Their job, as well as acquisition of insane wealth, depends on them NOT seeing it!
"Prove all things; hold fast that which is good." [KJV: I Thessalonians 5:21]
(Score: 2) by Justin Case on Sunday May 07 2017, @02:03PM
But the way out of bankruptcy is to spend more money! Ask any
Marxist, communist, socialist, leftist, liberalsorry I forgot they don't accept those failed labels any more. Anyway, whatever they're calling themselves today.(Score: -1, Offtopic) by Anonymous Coward on Sunday May 07 2017, @09:15AM
USA!! USA!!!
(Score: 0) by Anonymous Coward on Sunday May 07 2017, @04:48PM (1 child)
We need some more dead-end wasteful projects like the F-35 to keep those military contractors drowning in money. Audit the military budgets, and you will wretch at the waste. The U.S. Territories should be receiving better care, or let them go to be picked up by other countries. They may be happier about that, too.
(Score: 2) by Justin Case on Sunday May 07 2017, @05:30PM
You don't understand. We have not yet pissed off every single non-American by occupying their countries and forcing them to do things our way so they can have Freedom (TM) like we do at home. This is a problem because not-pissed-off people are less likely to become Terrists (TM), which we need as an excuse to crack down further.