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Here Comes "Prexit": Puerto Rico In "Death Spiral", Debts Are "Not Payable", Governor Refuses To "Kick The Can"
As we noted last night, for a whole lot of time nothing at all can happen under the guise of "containment"... and then everything happens all at once. Because not even two full days after Greece activated the "Grexit" emergency protocol, leading to capital controls, and a frozen banking system and stock market, moments ago the NYT reported that the default wave has jumped the Atlantic and has hit Puerto Rico whose governor Alejandro García Padilla, saying he needs to pull the island out of a “death spiral,” has concluded that the commonwealth cannot pay its roughly $72 billion in debts, an admission that will probably have wide-reaching financial repercussions.
In other words, first Greece, and now Puerto Rico may be in a state of Schrodingerian default. Why the ambiguity? Because while Greece is not technically in default until July 1, Puerto Rico does not even have an option to declare outright default. But that doesn't mean that the commonwealth will service it. Quoted by the NYT, García Padilla said "The debt is not payable." He added that "there is no other option. I would love to have an easier option. This is not politics, this is math.”
Funny: math went out the window in 2009 when central bank "faith" took over. The problem is that faith has run out, as has the "political capital" to keep an insolvent global system running, and first Greece now Puerto Rico are finally realizing it.
As the NYT adds, this is "a startling admission from the governor of an island of 3.6 million people, which has piled on more municipal bond debt per capita than any American state."
More:
A broad restructuring by Puerto Rico sets the stage for an unprecedented test of the United States municipal bond market, which cities and states rely on to pay for their most basic needs, like road construction and public hospitals.
That market has already been shaken by municipal bankruptcies in Detroit; Stockton, Calif.; and elsewhere, which undercut assumptions that local governments in the United States would always pay back their debt.
The immediate implication, as accurately presented by the NYT, is that Puerto Rico's call for debt relief on such a vast scale could raise borrowing costs for other local governments as investors become more wary of lending. Indicatively, Puerto Rico’s bonds have a face value roughly eight times that of Detroit’s bonds.
What is worse for the illusions that is US "capital markets" is that virtually all the same hedge funds who are long Greece on hopes of some central bank bailout, are also long Puerto Rico. As such, while tomorrow most will be spared...
... some of the most "respected" US hedge funds will suffer a gruesome bloodbath.
What happens next is unclear: "Puerto Rico, as a commonwealth, does not have the option of bankruptcy. A default on its debts would most likely leave the island, its creditors and its residents in a legal and financial limbo that, like the debt crisis in Greece, could take years to sort out."
So without the "luxury" of default, what is PR to do? Why petition to be allowed to file Chapter 9 naturally: after all everyone is doing it.
In Washington, the García Padilla administration has been pushing for a bill that would allow the island’s public corporations, like its electrical power authority and water agency, to declare bankruptcy. Of Puerto Rico’s $72 billion in bonds, roughly $25 billion were issued by the public corporations.
Some officials and advisers say Congress needs to go further and permit Puerto Rico’s central government to file for bankruptcy — or risk chaos.
“There are way too many creditors and way too many kinds of debt,” Mr. Rhodes said in an interview. “They need Chapter 9 for the whole commonwealth.”
García Padilla said that his government could not continue to borrow money to address budget deficits while asking its residents, already struggling with high rates of poverty and crime, to shoulder most of the burden through tax increases and pension cuts. Where have we heard that before...
He said creditors must now “share the sacrifices” that he has imposed on the island’s residents.
“If they don’t come to the table, it will be bad for them,” said Mr. García Padilla, who plans to speak about the fiscal crisis in a televised address to Puerto Rico residents on Monday evening. “What will happen is that our economy will get into a worse situation and we’ll have less money to pay them. They will be shooting themselves in the foot.”
And the punchline:
“My administration is doing everything not to default,” Mr. García Padilla said. “But we have to make the economy grow,” he added. “If not, we will be in a death spiral.”
And this one: any deal with hedge funds, who are desperate to inject more capital in PR so they can avoid writing down their bond exposure in case of a default, "would only postpone Puerto Rico’s inevitable reckoning. “It will kick the can,” Mr. García Padilla said. “I am not kicking the can.”
We wonder how long before Tsipras, who earlier was quoting FDR, steals this line too.
And speaking of Prexit, how long before Puerto Rico exits the Dollarzone... and will there be a Preferendum first or will the governor, in his can kick-less stampede, just make a unilateral decision to join Greece, Ukraine, Venezuela and countless other soon to be broke countries in the twilight zone of Keynesian sovereign failures?
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LMAO @ the NWO "elites" watching shit crumble.
OK "Rich Port", if you don't want to play there will be an "asteroid" headed your way.
Perhaps Puerto Rico can align itself with a financially sound country that has a robust economy. Oh, wait. Oops.
"Kick those worthless Puerto Ricans out of the Union!"
I just wanted to get that in before somebody else stole it.
Hot boogers! MOAR Good News!
Now, I ask you, just how much will Obie-won throw at the PR vote?
Huh huh huh huh huh?
So comforting that everything's A-OK Hunkie Dorrey!
NoDebt: You left off the "Bitchez"
Puerto Rico has one of the highest AIDS rates in the world. Now they have one of the highest debt to population ratios. What will they go for next?
"What will they go for next? "
Largest ethnic group representation on waiting lists for rent controlled apartments in NYC.
A LOT of people in the US own Puerto Rican bonds.
A LOT.
Do they know it?
Just another canary in the cornhole.
Detroit had 18 billion in liabilities when it declared municipal bankruptcy.
Puerto Rico is Detroit x 4, and no, they are no more able to print their own currency than Detroit or Greece in an effort to technically pay creditors in debased currency (since they use the Fed Reserve Fiat Paper).
We're going to see China, Spain, Greece, Portugal, Japan, Italy, France, possibly South Korea and some smaller players all tip into deep recession or even depression this year, with China + Japan kickstarting the next global economic crisis in a massively leveraged, collateralized by increasingly meaningless fiat paper and derivatives thereof, world.
I booked airline tix last night for PR in August.
Why did i not know this earlier? I'm not a stranger to ZH.
So...PR gets their bankrupt financed before Greece.
Will there be a race to the Xexits, like Portugal, Spain, Italy ?
Which country will next go Bankrupt ?
Look for a RUN on the PHYSICAL Precious Metal's Market, that will be the run that matters.
The FED's put out a terror alert for the US for the coming July 4th Holiday. They should know for they will be the ones who will be the one's who are doing the dirty deed.
last week got news from all my friends working in IT departments for financial institutions all over the world that they got directives to prepare to be able to face a shitstorm of epical proportions. it was expected and if you think it wasn't u r just a plain ignorant retarted ass.
The shitstorm of epical proportions is simply the switch to real assets and the rule of law, as the Network of Global Corporate Control
http://arxiv.org/PS_cache/arxiv/pdf/1107/1107.5728v2.pdf
comes under receivership in the Global Debt Facility. The coalition for the rule of law is now in charge. The dirty deed is Zerohedge and you trying to scare everybody. We know who is in charge, and it's us, not the 1% ers.
I thought those were gerbils
I'm going to start to use the "...canary in the cornhole" line. Good one.
CORNHOLIO!
I think some stagehands I know are going to get a big surprise when they open their Mass Mutual annuity packet next month...
Talk about "hoovering up dollars."
Plus the Fed is still on track to raise rates this fall.
This could start slamming into all sorts of muni classes of debt inside the USA itself.
Yet again...
The Feds are NOT gonna raise rates this Fall, September, October, fucking never.
Get over it. It is total sound bite bullshit.
The Feds CAN NOT RAISE RATES. Period.
Ain'[t gonna happen. Political theater only.
We're entering the 4th Quadrant.
Is that the lower-left corner of the "Swirly-gram?"
Did you know that EVERY American has a Corporation registered in Puerto Rico. Well you most likely did not if you had you would of taken possestion of it.
"Did you know that EVERY American has a Corporation registered in Puerto Rico. "
An interesting assertion. Link to information, please.
Is that like everyone having a cousin in Miami?
Oh wait, wrong bankrupt island.
WGAFUCK
exactly...obama will send ships down there and bring all 3 million of them into the country. We already pay for everything they have and they pay no income taxes to the feds...he'll make them the 51st state and register every single one of them to vote for the fucking D's. They'll think they hit the fucking lottery jackpot, but they'll just be added to the slave pool just like all the rest.
Make that the 52nd state. Israel is the 51st.
I thought it was the UK
Make that the 52nd state. Israel is the 1st.
TFTFY
Re: Obama's saving ships ..........with Captain Boehner at the ship's wheel and 1st mate Roberts hoisting the Rainbow flag!??! Yes, it will be glorious. However, given both suffering from navigation and sense of political direction disability, it'll be a hard left out of the PR ports and across the Atlantic blue to safe havens of the Middle East!! Bon voyage El Capitan!!!
Cockroaches. Never ever visit or be in Manhattan on the first weekend of June. Ever.
The June PR parade is a skin fest of the highest order.
I didn't know people working in Public Relations went on parade. That seems a bit - radical - for that sort of person.
maybe gay marriage will slow down these promiscuous homos. Probably not, but it will be a boon for divorce lawyers. They'll get rich.
As long as they have gay mariage they'll be a l l right.....
Oh, but it's Bush's fault my friend, Bush's fault.
Everybody in government and every government lover's fault.
I hope the dupes of the world are on the short list for extinction.
Which Bush,... Hue Due or Lue (I never trusted Lue)
"Kick those worthless Puerto Ricans out of the Union!"
I just wanted to get that in before somebody else stole it. "
SHUT UP Wolfnodebtl !
( hee hee hee hee )
It does sort of make you wonder if PR is more a part of the US than Greece is a part of the Euro/EU.
If you see the US government smashing PR over the head with "cash for reforms" demands, you know there is no such thing as the United States. Which would be sad. Except for Texas, which should have given the middle finger to the rest of the union quite some time ago (and might see such a situation as the perfect reason to do so).
How can a bailout be spun as saving the pensions of our beloved hard working IRS and TSA employees?
Or, maybe they've been watching and learning from the Greek drama and are talking to the Russians about a deep water port or ng pipeline to Cuba?
I believe TX tried to leave in 1861 and it didn't turn out too well
We didn't want to leave. We just like to fight.
Yep, Texas and the rest of the South is still occupied territory.
Jennifer Lopez has on of the finest asses I've ever laid eyes upon.
Does THAT count for anything?
You didn't oggle that.
Might have to double-ly seasonally adjust that ass.
Might have to double-ly seasonally adjust that ass.
nothing says, there is no true market for debt...like the revelation that someone loaned PUERTO RICO SEVENTY TWO DAMN BILLION US DOLLARS!!
NO SHIT, are these assholes responsible for any due diligence whatsoever?? Why is it just hang it on the taxpayer, corrupt bastards in Washignton, weeping cheetoh bastard flying on AF1 last week, sucking Barrys or Moochelles dick no doubt....
Luxembourg, Switzerland, or Vatican City?
The dream its getting over folks!!!!
Here we go
Hhttps://www.youtube.com/channel/UC24i0-R52E-Y4PHhsjLUbYg
This has negative implications for the muni bond market.
It's all interconnected... Now we get to see how resilient the system is to handle two major sovereign defaults.
PR is not soveriegn. They are a territory of the US. The Spanish gave it to us after we beat the stuffing out of them in the S/A war. I think they were glad to be rid of it, to be honest.
Who cares? Gay marriage is now the Law of the Land. All is well.
Correct RBG and don't forget the banning of the Confederate Flag, our politicians are prioritizing by least important issues. Don't worry about unemployment, destruction of the middle class, police basically on work slowdowns and ZIRP creating massive financial bubbles in equity and fixed income "markets". Anybody know who's left in dancing with the stars?
http://www.zerohedge.com/news/2015-02-11/small-grexit-dominoes-global-crises-grow
From Small 'Grexit' Dominoes, Global Crises Grow
Domino Chain Reaction (1:10 YouTube video)
Everyone with anything to lose has had a stake in not starting the dominoes falling. However, that meant the layout of dominoes was able to get even BIGGER, and thus, even more unstable, and so, more subject to some out-of-control series of catastrophic collapses ... There are indeed a wide and wider variety of relatively tiny dominoes, such as Grexit and/or Prexit, that could start the smash up:
http://www.youtube.com/watch?v=8yYWILv91YU
Skip to the 2 minute mark, to watch Largest Toppling Dominoes, as metaphor ??? Financial weapons of mass destruction are as unprecedented as physical weapons of mass destruction ...
I don't feel as confident as you do about this. You set dominoes up to fall according to a plan so that they can put on a show for the viewers.
The Elites may be applauding.
That's what I'm starting to fear: 1. Create crisis 2. Make people desperate for a solution 3. Present solution (total subjugation sold as liberation)
We've seen this before. Thesis, Antithesis, Synthesis.
Thought experiment: If one presumes that any crisis (purposeful or not) is just the means by which the next step in some central plan is sold/activated by something or someone, what does it look like when the that something/someone loses control? At what point does the loss of control by the become recognizable or even actionable?
How can it be helped along?
Good questions!
For the answer to that you'd have to ask the Reptillian Overlords. And you can't get an appointment.
How can it be helped along?
By formulating and presenting a viable, better alternative. Never let a crisis go to waste.
Greece should go back to the Drachma.
Banks could have currencies that compete based on perceived risk.
What else?
Democracy needs to appear in the media. The stranglehold that the overlords have on the media has to end. Competing news brands?
Blue sky this thing.
You are fully awake!
shoulda repealed O'Care last week
Puerto Rican Peso anybody?
Before the dollar, they used the Spanish Peseda.
Strike both of them out of ag and you can call them whatever you want.
They're the ones laffing.
IIRC Schiff moved & operates there.
I went to Puerto Rico once. Got off the plane, had a look around, got back on
the plane and came back home. Hell, the whole damn place was overrun with
Puerto Ricans.
Puerto Rico would be great if it wasn't full of Puerto Ricans.
Seriously, most of them are good people. They're typical islanders. You can get much work out of them. The island would be much worse if the scum didn't all go to New York.
LMAO @ the NWO "elites" watching shit crumble.
I wouldn't break out the party hats just yet - the psychopaths are evil, arrogant and sick as Hell, but they're NOT stupid. While the coat-tail riders and feckless cheerleaders will be stripped naked, wire-washed and punted onto the street peniless, wondering stupidly at WTF just happened, the Deep State knows what they're doing - they're gambling on the doctrine of "Order out of Chaos"
The trick is for the people to see it for what it is: a big game being played on them .... before the noose is tightened even more. Hopefully, humanity will recognize the rot at it's source, track it down, and burn it to it's roots.
that is precisely their plan. ALL economies crash, everyone become debt slaves, order out of chaos. problem-reaction-solution. after the starvation and riots worldwide, depopulation ensues, they have all the assets, we have worthless paper, they bring in the new solution - one world govt, one world currency. NWO is right on track
Here we go....all those been waiting for reset may be getting your wish...oh oh domino...Van Morrison
the commonwealth cannot pay its roughly $72 billion in debts
But $18 Trillion is nothing to worry about? Hedge accordingly.
Don't worry, they 'identify' with solvency.
Best
Rachel Dolezar
You know the old saying;
" owe the bank $72 billion, the bank owns YOU. Owe the bank $18 trillion, and you own the BANK!"
Heard that somewhere.
janet will buy them
planet shmanet janet [/frank n furter]
It's just a Jump to the Left ...
Then a Jump to the Right
Pelvic Thrust, pelvic thrust, pelvic thrust Oops
<<<<<< You do the hokey pokey and you turn yourself around?
<<<<<< Let's do the time warp again?
Inconsequential.
The immaterial has become... immaterial. [/Lord Cutler Beckett]
Looks like another Skyscraper in Lower Manhattan has just spilled onto the open market again.
Opening bid: one dollar.
Don't you mean "inconceivable"?
Hey how's your weekend so far? Did anything exciting? It's morning where I am and the weather is great.
Oh, i'm straight. Always been.
Exceptional!
Who cares! We have hot babes! Gimmie MOAR babes Tyler! MOAR pictures of the babes Tyler!
Go to the website GoodShit.
Anyone know of a PR etf or stock? Anything that tracks PR?
http://www.dubwheels.com/
Nothing that tracks PR or its bonds, but you can look at companies (mostly banks) based on the Island: BPOP, OFG, FBP, GTS & EVTC.
Hey thanks A LOT man, really appreciate that!!!!! I will look them up and start watching. Might even grab some puts on one tomorrow. Any opinion on which would fall the hardest due to this news out of PR?
FUCK THOSE MOTHERFUCKING MOTHERFUCKERS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
U mean the homomomomos??
Dominoes:
http://raftrecovery.com/wp-content/uploads/2014/09/dominos.jpg
I think Puerto Rico is a US responibility isn't it?
Who's next? Spain.
This may be the little straw that breaks the camel's (USSA) back.
More like the USS Saipan would appear...
More like the USS Saipan would appear...
Chicago is next.
More ricans there than on the whole island.
Clearly Puerto Rico will be let into the Union and become the 58th State.......
Were are all the fucking know it all experts now?!?
on CNBC, they didn't go anywhere
Obviously, they need to elect Steve Liesman as Governor of PR--pronto!
they're all here proclaiming teotwawki (for the 99th time)
Goodbye and Good Riddance. Send over the hot chicks and the really good rum...
Come to the Bronx. Half of them are here already..
I gotta admit some of them are unbelievably stupid hot gravity defying brick house masterpieces even at 16 or 17.
I mean..Daaaayaaaamm...
https://www.youtube.com/watch?v=KuRxXRuAz-I
just dying to meet you
Is that Jenner?
Just print it up and add to the debt no problems
Puerto Rico at least gets mentioned for something finally.
I'm going to my last gig of the season at an educational institution in the Bronx NYC tomorrow.
About 1/4 of the other persons working at this facility are Puerto Ricans by birth, more of Puerto Rican heritage.
I have been telling them since the tax proposals were voted down in April that PR was going to default before Obama leaves office, likely before 2015 ends.
I have also been telling them that a slew of new taxes are going to be rammed through by the bureaucracy to try and save their jobs and pensions as soon as they miss their first major bond payment despite earlier political reluctance.
Tomorrow is going to be very interesting...
And what do they say?
Corruption, man. Fucking crooks.
Why do you think I'm in NYC, bro: the economy there sucks.
It's beautiful there, man! But...
Fucking crooks.
-That is what they say, and not much else.
but they will still vote for the socialist that offers them.... whatever.
Barry will write them a (rubber)check tomorrow.
we're fucked...
This is so fuckin exciting and scary at the same time.
This clearly calls for more Rainbow Skittle Shitting Unicorn flag waving and chanting "USGAY, USGAY, USGAY...."
This is the banksters nightmare scenario. What if countries and corporations and individuals suddenly stop paying on their loans - and turn out better for not paying!
How could they not turn out better off? The rub is, The Squid/Morgue would cash in again on their DC bailout insurance.
Moar awesomeness....
It doesn't look so bad filing for bankruptcy if your sister did it first.
Pretty messed up global monetary system when tiny banana republics can bring down the whole bunch. Anybody seen Goldman Sack lately??
Why can't the IRS lose MY fucking records?
I want to be in America!
Everything free in America!
Be on T.V. in America!
Selfies of ME in A-MER-EEE-KAAA!
Catarina, 15, Fruit Vendor
Finally let's get this government bubble bursting thing started. Enough of this central bank shit show.
Let the fucks eat their math sandwiches. I hope Yellen gets fisted with AIG's dead zombie hands when the derivative bill comes due for this paper fuckfest.
Beautifully put.
A true wordsmith, that one.
Remember, Janet, never let them see you sweat!
Anyone else not worried about peurto Rico officially becoming part of Florida?
They'd never agree to it. Floridians are too ugly.
We need to ban their flag.... or stop them from marrying gerbils or something like that. More distractions....we need MOAR distractions.
Notice the pattern?
"WE MUST MAKE THE ECONOMY GROW".
So says the government of Greece.
So says the government of Puerto Rico.
So says the governments of Italy, Spain, France.
-----
Well, guess what SCUMBAGS... once deep in debt YOU CANNOT GROW.
DUH.
When you're in deep debt, funds that would make growth possible are consumed by debt payments.
The only solution is to NOT BORROW.
The only solution is to NOT PLAY THE GAME.
But this will NEVER HAPPEN as long as some humans (politicians) can borrow money that other humans (generations of taxpayers) must pay back.
Even when nobody else is putting humans into debt, most humans put themselves into debt. STUPID. STUPID. STUPID.
But at least SOME humans are wise, prudent and thoughtful enough to refuse to borrow. Almost all growth comes ONLY from these people. Too few remain.
Since these prudent, responsible folks are massively outnumbered and outvoted, game over. Debt stupidity gone wild had 30~40 years to build up to the current level. No way out. Especially as long as any human remains who can borrow in the name of others.
Humans are finished.
Rest in pieces.
"When you're in deep debt, funds that would make growth possible are consumed by debt payments. "
This statement is worthy of repetition.
The Debt Burden is Economic/Monetary Leakage, Velocity is dampened.
In the USA we see Velocity dampen in all measure of Money stock, M1, M2, MZM.
http://research.stlouisfed.org/fred2/series/M1V (Top was 2007 Q4 at 10.7, now down to 6.3)
http://research.stlouisfed.org/fred2/series/M2V (Top was 1997 Q3 at 2.2, now down to 1.5)
http://research.stlouisfed.org/fred2/series/MZMV (Top was 1981 Q1 at 3.5, now down to 1.4)
http://research.stlouisfed.org/fred2/series/Mult (Top was January 1987 at 3.1, now down to .7)
This Economic System has lots of Leakage.
With open borders, open trade, no capital controls, No Tax Jurisdiction in the USA, off-shoring of capital, off-shoring of production, Out-sourcing Services,... but Financial ratings are off-shored to VICHY US Agencies, Auditing is Off Shored to VICHY US Independent Auditors, US Regulators are Off shored to VICHY US Citizens, US Government is Off Shored to VICHY Bankers in Disguise, US Constitution is Off Shored to VICHY US Lawyers...
Well What is left after that?
ANGLO Bankers have groomed people to infiltrate Europe and American Government & Bank Regulating Systems.
But don't expect University Professors and Personnel to protect the US System. Corruption was planned to include all interfaces. That means Press, Universities, Government, Regulatory Agencies, Accounting, Independent Auditing Agencies, Hell You Name It!!!
Did the Jade helm map indicate whether Puerto Rico is a "hostile" territory or not? I forget
I want to know if Puerto Rico's Interstate connects with Hawaii's.
No, but it DOES connect with Wall Street.
Autopistas Metropolitanas de Puerto Rico, LLC (English: Puerto Rico Metropolitan Highways) —better known as Metropistas (English: Metro Highways)— is the public-private partnership, privately held company, and limited liability company that operates Puerto Rico Highway 5 (PR-5) and Puerto Rico Highway 22 (PR-22) on behalf of the Puerto Rico Highways and Transportation Authority. The company is a consortium between Goldman Sachs and abertis where Goldman Sachs initially served as majority owner through its Goldman Sachs Infrastructure Partners II infrastructure fund, while abertis initially served as minority partner and main operator. However, on February 2013 abertis acquired 6% of Goldman Sach's equity, elevating its position as majority owner with 51% ownership.
We need war on banksters and their money. Let them eat it.
Enough is enough. We had it with their murderous greed.
Game Over.
There is a world without bankster's money we just need to open our eyes.
Know your enemy, know what their money is truly for:
https://contrarianopinion.wordpress.com/2015/04/14/plutus-and-the-myth-o...
may take a while, if ever. Too many dumbass sheeple with their heads firmly entrenched up their asses -addicted to the sweet smell of flavor enhanced methane. They think they are smelling roses and dandelions, rather than shit.
Damn, those girls are hot...
If there was some way to wipe out all the PR males and just leave those babes I know where I'd take my next vacation. Hopefully their backs are less hairy than their greek counterparts.
Please do a handjob for me !
Keep your Frank in your pants, please.
http://www.hulu.com/watch/276488
Bummer, I expected a link to Herzog's "Little Dieter Needs to Fly". Highly recommended: http://www.imdb.com/title/tt0145046/
Hmm, Another $72 billion that can't be paid. That's $19,000 per man, woman and child in a ocuntry with nearly 14% unemployment.
$72 billion is a lot of money to the ones who are owed it.