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Puerto Rico Warns Of Imminent Government Shutdown Due To "Liquidity Crisis"
Two months ago, when Puerto Rico’s third largest bank failed costing US taxpayers some $750 million in the process, we noted that Doral Bank wasn’t alone in the world when it comes to having an NPL ratio bordering on 40%:
“It appears that at least in some ways, "Puerto Rico is indeed Greece,” we said.
Less than 60 days later it appears that Puerto Rico is indeed Greece in a lot of ways because as Reuters reports, the U.S. territory faces a looming government shutdown thanks to “the absence of liquidity to operate.”
Puerto Rico's top finance officials said the government of the U.S. territory will likely shutdown in three months because of a looming liquidity crisis and warned of a devastating impact on the island's economy.
In a letter to leading lawmakers, including Governor Alejandro Padilla, the officials said a financing deal that could potentially salvage the government's finances currently looked unlikely to succeed. It warned of laying off government employees and reducing public services
"A government shutdown is very probable in the next three months due to the absence of liquidity to operate," the officials said. "The likelihood of completing a market transaction to finance the government's operations and keep the government open is currently remote."
The letter, dated April 21, was also sent to the heads of Puerto Rico's Senate and House as well as the governor. It was signed by the government's fiscal team, including the head of the Government Development Bank and the Treasury Secretary.
Puerto Rico, which has a total debt of more than $70 billion, is trying to raise $2.95 billion in financing, while pushing through unpopular tax reforms such as a higher value-added tax and increasing a levy on crude oil to help pay for it.
Essentially, tax overhauls are needed in order for hedge funds (who took down a sizeable chunk of a $3.5 billion deal the commonwealth floated last year) to feel comfortable supporting the new bond issue. The letter from the GDB is apparently an effort to shock lawmakers into action before time runs out. As a reminder, here’s a concise summary of the situation via FT:
Even with tax-free yields now just shy of 10 per cent, the Mom-and-Pop savers who bought most of Puerto Rico’s now junk-rated debt, will no longer touch new issues. Instead, the government is reduced to negotiating ever-stricter terms for one-off deals with syndicates of hedge funds.
The commonwealth’s financing arm, the Government Development Bank, is on track to run out of cash by the autumn unless it is able to sell a proposed $2.9bn bond that will be supported by a new tax on crude oil imports. The legislature is holding hearings on the tax, which the governor and investment establishment hope will be enacted by next month.
That’s from February. If the GDB’s timetable proves accurate, we could see “PRimbo” right around the same time Europe witnesses “Grimbo.”
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Puerto Rico should join the European Union and live off of low intrest Euro loans for the next 6 years.
Liars...they wont shut down..they will tax more.
RIPS
This is Putin's big chance.
"...we are also expecting a large asteroid to strike in the Atlantic not far from here in the near future. Thanks to Uncle Sam for all the body bags."
Puerto Rico faces government shut down; liquidity crisis looms large
Puerto Rico is neither fish nor fowl or good red meat. They've gamed the system for decades but have rolled the dice poorly and wound up with "do not pass go, do not collect 200 dollars" and now they've decided they want to petition for statehood...if they can talk their voters into it....
ANITA
Puerto Rico
My heart's devotion
Let it sink back in the ocean
Always the hurricanes blowing
Always the population growing
And the money owing
And the sunlight streaming
And the natives steaming
I like the island Manhattan
Smoke on your pipe
And put that in
GIRLS
I like to be in America
Okay by me in America
Everything free in America
BERNARDO
For a small fee in America
ANITA
Buying on credit is so nice
BERNARDO
One look at us and they charge twice
-WEST SIDE STORY
pr go 20 year bid/ask is approx 10% yield to clarify the chart above that is just showing price (and inferring a 20% haircut based on a price just above 80).
PR is to USSA as GR is to EU. A welfare state, cut it fucking loose. NO MORE!
good lookin out there rainman, whose on first?
Why are these fuckers always "warning" that they "may have to lay off government employees"?
Pick up a telephone book, thumb through the govt pages in the front. Page after page. City, county, state, fed. Page after page, single spaced. Every phone number is at least one paycheck, pension, and health care bill. Every single number on every page.
God forbid one or two of those phone numbers disappear.
This is Putin's big chance, go in with cookies and molotovs, pay the "demonstrators" $50 a day, overthrow the Government then claim and "color revolution" had taken place. Then start building a fence around the island to keep Americans out. Oh, and try to throw the Americans out of their bases there and then claim they "invaded" when they push back. Ukraine West version.
Bravo! Excellent comparison...
You know the drill pefectly, now you can work for the dept of state.
Twenty minutes well spent in understanding Puerto Rico would go in listening to Democracy Now from April 21. It truly is a horror story never told but so believeable and consistent with what we know about bringing American Freedom & Democracy© to countries around the world.
http://www.democracynow.org/2015/4/21/war_against_all_puerto_ricans_inside
If you find that first broadcast piece interesting, there is a continuation of the discussion here:
http://www.democracynow.org/blog/2015/4/21/part_2_nelson_denis_on_the
Moar zirpy/nirpy e-money for all the land. Problem solved. Please let this nightmare end. I'll live with the consequences on the other side.
Is PR the prophecy of things to come for the USA.
...or Detroit, Chicago, then some other US cities.
https://www.youtube.com/watch?v=Rf0fmqWS-kI
He looked a lot like Che Guevara, drove a diesel van
Kept his gun in quiet seclusion, such a humble man
The only survivor of the national people's gang
Panic in Detroit
I freelance over th? internet and earn about 80-85$ an hour. I was without a job for 7 months but last month my paycheck with big fat bonus was $15000 just working on my computer from my home for 5-6 hours. Here's what i have been doing... www.globe-report.com
Government shut down? We could only be so lucky.
indeed, Doc ... any goobermint shutdown is a good thing.
We did an exercise last weekend in which the scenario was that Washington,D.C. and the entire Federal government had been neutered in a nuclear attack. For some reason, the creators of the exercise assumed there would be rioting in the streets. I claimed there would be non-stop celebrations. For purposes of the exercise, we stayed with the riots.
Who did this exercise?
So, a nuclear attack inside the beltway is a problem. But wait . . .instead of rioting, those fuckers are out there celebrating! all hands on deck!
It's insane that a lack of government interference would result negatively on the economy.
Um, same as It ever was?
But, if you are indebted due to your cost of higher education and it seems as if there is no federal assitance or aid to help you effectively pay of that which you owe, then come on down to Austin, Texas! The city will service that debt for you as long as you "tutor" some ill-behaved (and probably disproportionately loved at home) students at two of the lower performing (who's counting? and why?) high schools!
Apply here:
http://austin.craigslist.org/edu/4994030092.html
Love,
The Austin City Council, approved by Gregg Abbott
$5,7300
Uh Oh educating peeps in public schools! We the dems gonna have to bring in the Supreme Court in this unfair matter! Where is deblasio to ensure the criminal economy has its channels stuffed with the future of this country?
"The absence of liquidity to operate" We done broke!
PR should ask California how to do some creative accounting and make all of their debt disappear.
Liquidity, righhht.
"I got caught short of cash, can you spot me some liquidity?" > A good way to get pissed on.
Jeni's recalling entire product line, closing all stores in listeria scarehttp://www.bizjournals.com/columbus/news/2015/04/23/jenis-recalling-enti...
Jeni's got Listeria?
Damn, she was cute too.
pods
I've got it, I've got it.
I've got her number on the wall.
Oh no the chaos of those addicted to her chocolate ice cream..... damn that stuff is delightful! Expect junkies to be out of control~ might need Marshall law!
U I'm sure know how that dark deep chocolate of hers is like one only needs a spoonful or two for satisfaction..... and I'm sure some folks r like yea u can take this chocolate ice cream out of my cold dead hands before I will ever throw this stuff away..... what's one spoonful of listeria gonna do ... Kill me? Or is it gonna kill me to throw this ice cream out without someone to make sure it is pre listeria batch... Cause who knows when I will ever get more!! Suicide by ice cream!
Sad. I've had a couple of patients die from L. Monocytogenes. Both were chronically ill and were immunosuppressed. One woman lost her baby which can occur.
I wish this country would consider cleaning up the dairy industry. Cows living in filth and relying on pasturization to keep products safe simply is Russian roulette. A pathogen getting into a sterilize product with no competition from beneficial microbes can grow exponentially. But, yes, that would mean more expensive food people would be unable or unwilling to pay. It's just hopeless.
Miffed
Hard to do, Miffed, as long as we keep feeding dairy cows corn. Cows are not designed to eat corn, which makes them sick, and makes their feces toxic. As you noted, it just takes a tiny amount of this to get into the milk and it becomes hopelessly infected. You can't keep the operation clean enough.
Cows should be fed grass, it makes for healthier animals, and cleaner milk.
Dow _ _ _,000....
"turn out the lights....the party's over"
Dead Don Meredith
Gundlach Buys $20 Million of Junk-Rated Puerto Rico Bonds
http://www.bloomberg.com/news/articles/2015-04-22/gundlach-s-fund-buys-20-million-of-junk-rated-puerto-rico-bondslach
weekend home on the cheap...he gets 1/3 of the island when they default
Puerto RIcan bonds are very popular in public and priavte accounts. Retirement is heavily counting on these bonds for hundreds of thousands of Americans right now.
I've seen patients dying in hospitals with doctors hovering. Drug after drug is administered to help. Finally one doctor says, "Just take the patient off all the medications." Patient almost immediately improves.
When people have to work in order to eat, they do. Take the patient off the medications and watch what happens.
http://www.rawstory.com/2015/04/20-cash-starved-public-colleges-drafting...
Wow thanks for sharing this story I don't care about at all. No really appreciate it.
Good for Bobby. Three cheers, in fact.
You cannot escape this trap so long as the current educrats continue churning out their armies of brain-dead socialists.
They are the ones who truly pave the way for the bankers and politicians everyone complains about-- yet they take none of the blame for things going south. Without their brainwashing and deliberate effort to indoctrinate youth with European philosophy rather than American philosophy, the tyrannical door would have remained firmly bolted shut.
Weird, I didn't see the blame being placed on Republicans. Do they have republicans in PR?
\s
Very bullish for stocks..
All of Puerto Rico's money went to New York. Same with 49 States. Everybody's broke but Wall Street bankers.
Ouch. I wouldn't want to be stuck on that island in good times !!!
Do we need Puerto Rico?
Nothing more than a bankster trying to get some of my FAFSA. Let them default.
Meanwhile in the U.S E.U. and Japan...print to infinity and beyond....
Puerto Rico, the other Greece.
PR could have been the 51st state... guess they never hired GS.
Without Federation or a central bank, the small countries are getting whacked.
If they weren't part of the US territories they could go so cayman economics.
Whose next California?
If Putin really wants to stick it up Obama's butt he'll offer a bridge loan to PR.
But really, a sound and stable economy can't be achieved without removing the government parasites from the body politic.
"Liquidity Crisis"..what a wonderful, artful term. Sorry, I can't make my next payment, I'm having a liquidity crisis. I'm sure it will pass. "What do you think will happen in the economy next quarter?"..."Well it looks like about a 50% chance of profits but those liquidity crises could always blow in, they do the in this part of the country. You just can't ever predict when those damn things will move in."
"We had the budget all in order. Then out of the blue we got hit with a liquidity crisis....there was just no way to predict it. Came out of nowhere!"
well they screwed up...they should have taken car loans and invested it in the stock market! Or they should have donated to Hillary? Either would have gotten them there. Just annouce they are school loans and OBama will buy them
The Puerto Rican people should be celebrating by dancing in the streets and having parades at the news their gubmint is shutting down.
'Government Shutdown' ............ it has a nice ring to it!
All it means is they get a paid sabbatical and the common folk can't go to the parks.
The parallels with Greece are closer than you think. One very viable option for Puerto Rico is to declare itself an independent country free of the US. If things really get rough watch the "Independentistas" re-gain momentum (which they have been steadily losing the last 50 years or so - they were once a pretty powerful group and are still very influencial amongst the Puerto Rican upper class).
Hardy-har-har. The entire island runs on transfer payments from the US. Guess what happens to the monthly check after La Dia de la Independencia?
Highest death rate from firearms in the West. Just flush PR and forget about it.
Puerto shutting down would have the same affect on the rest of the world as Greece shutting down. NONE
Teach me more!
PR should be given its independence.
whether they want it or not.
An NPL is still an asset, until it is formally defaulted on.
Another part to the scripted Kabuki Theatre.
The SDR Basket (not Gold backed) has been part of the US plan for a long time. It allows the US to kick the can to another FIAT financial system. Each time the US does this it avoids the need to declare itself insolvent.
Which begs the question will those fine Puerto Rican whore's give credit on the "come line" ? ;-/
The stoopid it burns....
Over 30% waste in any government at any level,is what Kevin has said is a proven statistic.Listen to Shark Tank's Kevin O'Leary.He has said in the past on BNN that all levels of government especially Federal is like a cancerous tumour that needs the blood life line cut-off from it.It's evil,and it's what's wrong with our system and why it is decaying.Government today is disfunctional.It's rotting our society.
https://www.youtube.com/watch?v=igHlPTII4ak
The whole fucking island is government dependent. The only export is government dependency . It's a damn shame what politics do to families that buy the bullshit. An iWatch in every pot if you vote for me mother fuckers.
Here is a little fiscal disaster that has been in the shadows. In the end, the American Tax Payer is liable for all their bad debts. Just as the American Tax Payer is liable for Bad Banks. The list of Tax Payer liabilites would make a Greek turn red with rage. The last 6-7 years has been an exercise in putting every private liability on to American Taxpayers balance sheet. Do any of you wonder at the Militarization of Police, of total awareness spying, of American armed forces training on the streets of American cities for unknown reasons? The elite are buying into New York apartment complexes that feature luxuries of unheard of levels, they plan to watch the show behind an army of cops, national guard and army battalions. That is their plan, they will come down fro their towers when the dust clears. Go watch the old movie from the 70's "Soylent Green" notice first how a tiny elite lives in towers of luxury, protected by killer police, that is our future.
... and then we kill the oceans ...
I hope they have a lot of greenhouses in those buildings, or else they'll be dining on Soylent White pretty quick.
The "protectors" will also start to wonder why they have to sleep in the barracks and eat MREs rather than dining on Cordon Bleu and Dom.
No comment.
I had some friends go there recently for vacation. It is falling apart and has deterioated.
Vacation elsewhere
Ding! It must be feeding time for the banksters Vampire Octopus of debt!
Goodbye Puerto Rico, you like the others, will be carved up and served to the evil and criminal Vampire banksters. The People can either serve the Vampire Octopus or be eaten: preferable they all die except for the servants and soldiers belonging to the rich Elites.
White Man's burden...I'm not 'white' allegedly, but, I'm still paying...
Such as obvious vestiage of colonialism, yet fcking scum like the GOProg, Orin Hatch, actually pushed a bill to bestow statehood on PR in exchange for an add'l congressional district in Utah. I hate GOProgs, even more than DemProgPervs.
Isn't the chupacabra the PR state bird, or is that mammal, or something?
Why should there be a "devastating impact on the economy" when the government shuts down? Shutting down a consumer of real wealth who produces nothing himself sounds like a form of economic stimulus actually.