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First Default By U.S. Commonwealth In History: Puerto Rico Fails To Make Required Debt Payment
Over the weekend Puerto Rico was supposed to make a modest principal and interest payment of some $58 million due on Public Finance Corp. bonds, which however few expected would be satisfied. As a reminder, on Friday, Victor Suarez, the chief of staff for Governor Alejandro Garcia Padilla, said during a press conference in San Juan that the government simply does not have the money.
Moments ago Melba Acosta, president of the Government Development Bank, confirmed as much, when he announced that only $628,000 of the $58 million payment, or just about 1%, had been paid.
Below is the full statement from Acosta on the service of PFC Bonds:
Today, Government Development Bank for Puerto Rico ("GDR") President Melba Acosta Febo issued the following statement on the service of Public Finance Corporation (PFC) bonds:
Due to the lack of appropriated funds for this fiscal year the entirety of the PFC payment was not made today. This was a decision that reflects the serious concerns about the Commonwealth's liquidity in combination with the balance of obligations to our creditors and the equally important obligations to the people of Puerto Rico to ensure the essential services they deserve are maintained.
"PFC did make a partial payment of Interest in respect of its outstanding bonds. The partial payment was made from funds remaining from prior legislative appropriations in respect of the outstanding promissory notes securing the PFC bonds. In accordance with the terms of these bonds, which stipulate that these obligations are payable solely from funds specifically appropriated by the Legislature, PFC applied these funds—totaling approximately $628.000—to the August 1 payment."
WSJ adds that the payment to bondholders is the first skipped since Governor Alejandro Garcia Padilla in June said the island’s debts were unsustainable and urged negotiations with creditors in an effort to restructure about $72 billion. "Still, analysts said it isn’t likely to provoke an acute market wide reaction from investors, many of whom have been inching away for the commonwealth for years."
Except for those hedge funds who haven't, and have been BTFD in hopes of another bailout of course.
And confirming that making just 1% of the contractual payment is not the same as making 100% of it, moments ago Moody's confirmed what most had already known:
- MOODY'S VIEWS PUERTO RICO IN DEFAULT
More via CNBC:
"Moody's views this event as a default," Emily Raimes, vice president at Moody's Investors Service, said in a statement, adding that payment of "debt service on these bonds is subject to appropriation, and the lack of appropriation means there is not a legal requirement to pay the debt, nor any legal recourse for bondholders.
"This event is consistent with our belief that Puerto Rico does not have the resources to make all of its forthcoming debt payments. This is a first in what we believe will be broad defaults on commonwealth debt," she added.
In other words, small or not, PR has failed a mandatory principal repayment and is now in default under the PFC bonds. Up next, as per Bloomberg's preview "the default promises to escalate the debt crisis racking the island, where officials are pushing for what may be the biggest restructuring ever in the municipal market."
“An event like this is significant enough that it could hurt prices for Puerto Rico bonds,” said Richard Larkin, director of credit analysis at Herbert J Sims & Co. in Boca Raton, Florida. “I can’t believe a default on debt with Puerto Rico’s name will go unnoticed.”
It is unclear if creditors will now threaten the commonwealth with a "temporary" expulsion from the dollarzone as part of their hardball negotiating tactics. Nor is it clear if Schauble is still willing to trade Puerto Rico for Greece.
What is clear is that the first default by a US commonwealth is now in the history books.
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Always thought the Ricans were really Greeks.
If you got what you deserved; you would be in hell...be glad God is patient, but do not try His patience, for if you die in your sin, then you will be separated from all that was ever good.
Must we put up with this every day? I'll gladly never mention religion again if everyone else does the same, otherwise I'm tired of taking it and biting my tongue as if I'm pissing on some sacred ghost.
This is a test case for the Banking Cabal; watch those boys buy up the assets and watch the average Puerto-Ricans suffer. Human depravity in a nutshell. Kill the person who killed the Lion, the protestors all say, the very ones who killed their child while in their womb..again human depravity in full view.
You know, if everyone let go all at once, the reset wouldn't be as difficult as everyone is afraid of. This economy could be ratcheted downward fairly quickly, if everyone takes the hit at the same time. Most would see a balance between what they are owed, and what they pay to service their own debts to others.
The rich would still be the wealthiest guys in the room, the poor would still be poor, and everyone else will still be somewhere in between. Just at a lower, more manageable level.
The issue of SCALE has a lot to do with wealth disparity and economic balance. What is possible at a lower level becomes impossible at higher, more inflated levels. Leverage at inflated levels can have too much influence, be destabilizing to the entire system.
A ripped bandaid always heals faster than neglecting a wound to fester.....
All automatons, including economic systems, have reset functions. All that's required is someone to push the button. Real, physical capital would remain after a writedown, and the speculators chastened. I agree, what's not to like about a writeoff? Should have happened in 2008 as well, but didn't. Now I hear that AIG is well enough to repurchase its own stock. They didn't learn a fucking thing. As a US taxpayer, I'm forced to say "you're welcome", anytime.
Um, Hello. Print moar money and pay the dang bill! How hard is that?
Just as there are more Greece’s in the EU- Portugal, Italy, Spain, France, there are more PR’s in the US- starting with California.
There is a growing consensus all around the world and even here in Blighty which houses the worst criminals known to man to withdraw your total consent.
Let the child molesting criminals that continually ruin you pay for the mistakes they themselves caused, and give the cunts the middle finger. None of you caused this bankruptcy come robbery, so dont fucking comply.
Its not hard. You wont loose any sleep, and you can be rest assured when a 'Debt Collector' calls, you really do have the passage of righteousness on your side, and tell the idiot cunts to fuck off seeing as they be breaching the peace, and the idiots 'Will', get nicked for it.
Take back what was always yours and join me my ZHedgtastic friends, be free...
There is a 'Common Law', and you can live by it. Cause no harm, cause no loss. It shouldnt be like this my friends, lets change it.
Aint that right NSA, GCHQ?
;-)
'None of you caused this bankruptcy come robbery, so dont fucking comply. '
It's good to see you posting ITM96.
Since election season has kicked off the place is swarming with shills and 'bots of every flavor.
...& there just hasn't been enough swearing around here lately for my tastes.
Give me a shout Throxx mate if you see these cunts knocking about and I will teach them something their mother damn well fucking should of.
Just like the bits of human detriment that are now looking to make your fucking vote count eh? We Aint fucked mate, they just tell you, you are. Humans when in the right frame of mind are incredible, in fact they are unstoppable, including you.
Take care fella
;-)
Obama will soon be visiting 58 states.
Obama Claims He's Visited 57 States - YouTube
The "1" on my cellphone/teleprompter looks like a "7" too.
Another Bush legacy, PR got slammed mostly from energy debt, massive spikes caused by the Bush war machine and china coal/steel market manipulation and prolific energy finance fraud and that lil 80-90-110-120-....140 barrel price spike generated entirely to fund the Iraq war that was the nail in the PR coffin.
Dicks
Jeb! gonna be OK with PR stiffing the energy bond holders?
I am, but advocating bankruptcy has consequences, most likely the primary investors of those bonds were US and PR public employees, PR is going to stiff themselves.
Then there are the legal issues, you can't changhe the bond rules after the bonds were issued and money spent, that's flatly unconstitutional, theoretically even if Congress revises the US federal bankruptcy code to relieve Puerto Rico, it wouldn't effect the bonds already issued.
I think what Jeb! is proposing is the federal govt buy up the bonds and make them good, a bailout of PR with American taxpayers.
I propose a Puerto Rican ethnicity tax be applied to all Puerto Ricans until they learn to "vote correctly".
MOAR BULLISH SHIT!!!
"Put Isla Verde in a trust your government cannot access and we'll loan you another 5 billion to get you by until next year."
-Bankers
Oh yeah, it's Bush's fault. Jeezus H Cricket give it a rest Obam licker.
Extend and pretend that's the standard MO for any local, state or federal entity for a while now. While the market can stay irrational longer than you can stay solvent what can't be paid back won't be paid back so it's just a matter of time. The big question is will we go down via death by a thousand cuts or are we going to get a mushroom cloud situation ala Lehman this go round?
Send them an EBT card, most PR"s in liberal strongholds are receiving government and local benefits , might as well spread the wealth .
"Send them an EBT card"
Are you kidding? The whole island's economy runs on EBT cards.
Puerto Rico is a U.S. taxpayers black hole.
Wake up Americans!
Puerto Ricans are taking you for SUCKERS!!!!!!
Great, now we can look forward to 3.5 million spics legally invading the US. I hope they confine themselves to Fla and NYC.
Aren't you a ray of sunshine? The mainland could do worse than these "spics" I found in my travels to PR the people to be polite, bilingual, hardworking, and industrious. Not to mention the women are extremely hot. Oh, and there is that pesky legal status they have of already being Americans and all...
We have enough in Florida, thank you. Send them ALL to NYC since Manhattan Joos are responsible for this mess (and most others of course!).
Don`t worry...The Joos won`t let anything big happen....it will get papered over and its back to business!
Puerto Grico (pwerto Greeko) !
Altogether now, all 3.5 million PRs, "I want to live in America. Life is so fine in America." Prepare for the invasion.
IMF is ringing Puerto Rico door bell. How did fucking Atomizer get around our new webpage sitemap.htm? We blocked old links to make you type into the field. It's our new transparency Terms and conditions guidelines. Fuck off IMF!
http://www.imf.org/external/ns/search.aspx?NewQuery=puerto%20rico&col=SITENG&filter_val=N&lan=eng
Silent Revolution: The IMF 1979-1989, October 1, 2001, Chapter 4 - Policy Cooperation: The Fund and the Group of Seven
O/T: Yahoo buys a fashion site for 200+ million. WTF? How does Mayer still have a job?!?!?!
They are simply short just 2 Zeroes. Nothing to see here. Move along now.
Bonds carry risk - that's what interest is for. If you got paid back every penny plus interest - you didn't incur any risk at all. OK - so PR defaulted - WHAT'S THE BIG FUCKING DEAL?!?!? Maybe the bond holder (investor) needs to exercise better fiduciary scrutiny next time...or change fucking professions.
Is that really you, Rip Van Winkle?
Just like General Motors screwing over the Bond holders to save too big to fail.
How's the St.Petersburg plant churning out Cadillac automobile's. Opel has barely saved your ass
Spoof GM Commercial Claims They Repaid Loan ....
GM Reinvention Commercial (SPOOF) - YouTube
so bullish Puertogreeco?
Si se puede!
Will Putin come to the rescue or does he hold out for California... California would be much easier to assimilate. Then again Russia and China have probably already agreed that China gets California.
Alaska.
Russians actually have a claim to California. They were here before the US was. There is a place in nothern California called Fort Ross (Russia). Putin could claim California like he claimed Crimea.
I hope Putin makes good on his claim. I'd love to see those San Fran pole smokers try to defend themselves!
They'd have to get disconnected from their "partners" ass before they could defend.
With all of these defaults aren't CDSs ever going to trigger or are they simply worthless to those who bought them? Yes it's a rhetorical question.
Ohhh COME ON ... they will make it up with summer sales from coconut tanning oil, margaritas, and hot-pink lipstick.
You people have no faith.
Fuck....I'm headed to Puerto Rico on Friday. This should be interesting.....
Don't forget to bring toilet paper, you might want to get a backpack for that.
Who needs to stay behind? They can all come to Merika!
US Plans To Issue Millions Of Green CardsA report of the U.S. Senate’s Subcommittee on Immigration and the National Interest shows immigration officials by 2025 could approve an estimated 10.5 million visas, which allow immigrant workers and foreign students to live and work in the country temporarily. That's more than the total populations of the Iowa, New Hampshire and South Carolina, according to the right-wing site Breitbert News, which exclusively obtained the Senate report.
Federal policy allows officials to grant approximately 1 million new Legal Permanent Residents status cards every year.
http://www.msn.com/en-us/news/us/us-plans-to-issue-millions-of-green-car...
But I thought Bill DeBlasio demanded The Fed bail the Ricans out! No worries it'll happen. How about all those bond holders, how are they going to recover their principal? NP-print a few more billion, done.
The new Hillary Clinton campaign, leave no Puerto Rico votes behind. Biden will state, we got you into this problem, vote for me to get you out by adding new inflationary tools.
58Mln is app. the amount, which B. Madoff has stolen. He got a lot of time in prison.
What if Puerto Rico send every one of their citizens for 1 day behind the bars?
And the Basurds knew it was coming, and waited till the market closed on the funds, etc. so while you sleep the tribe can sell after hours.
Bring it on!
No wise Latinas to the rescue?
Latin->Rome->Pope = illiterate slaves of the empire
After the crusades, the Templar knights focused on saving Spain from the Saracen kikes. They lost. From this failure rose the Inquisition. The Spanish Inquisition, and the New World slave tade.
Just look. Latinos are as clueless of their true history and thus as easy to program and sacrifice as whiggers. No idea.
To save ourselves we have to enlighten them. Not charity. Survival.
The television is a remarkable tool for education, or disinformation. Its only disinformation. Feed them the truth.
A few years ago I stepped into a pub. Everyone was watching the gnews on tv. I walked to the next pub. And the next. And the next. And the next.By this time, I needed a drink.
Civilization is dying before our eyes.
you sure are a dumb fucker, Monad.
fucking public schools....
I learned more walking the habitable continents than I did memorizing the lies you hold as truth.
The work I did invest in has come to fruit. The design of your relationship to me is sealed. If you violate my property, I am free to kill you.
I held back my best. This is more than enough. You'll get more than you deserve, so STFU.
There you are. Use the gift, or lose it. BTW I now have the right to punish you if you beat your children, or your wife. Anywhere on the planet.
The deserving will clean the table.
You're all going to school. Under me.
You already who I am. I AM THE BEST
You're a dick. Please come visit me and if you're worthy, take the tour.
I changed the world. You didn't even notice it. Good.
Bird
Government defaults are when it starts really getting serious. It will start or continue to erode the perception that these entities provide towards security and stability within their respective countries, regions or globally. If you can't trust a government to pay then it isn't too hard to imagine they eventually won't be trusted and will need to be bailed-out or bailed-in or default and likely fail. All these are bad for almost everyone.
The future financial path will lay waste to the fortunes, dreams and futures of almost everyone. And can also have unexpected consequences for those that seek to benefit the most in the end. The current benefactors of the calamity will attempt to ride the crashing wave to vast new heights of wealth and power on the backs of all their intended victims and their loyal supporters at all levels as well. It is likely they too will fail to achieve their goal. Today I will skip the practical experience analogy. The current loyal supporters, who unbeknown to them are being used now as pawns, will eventually find out they too were lied to and also be complicit in the crimes as well as bankrupt. And as an added unexpected bonus the former supporters will also become ideal scapegoats (i.e. See LIBOR).
So, I commend those of you that considered or took my suggestion last week and are working together. If you choose to work together you increase the chances of ending the current disastrous planned financial path. And you are already contributing to the potential for a smooth, successful and peaceful transition to a brighter financial future for everyone. There may be old business disputes, individual rivalries or other barriers to productive teamwork. Do your best to work through those and not let those become barriers to success in the larger financial goal. Further you may want to consider taking advantage of opportunities now to improve cohesion. Each of you have already shown the visionary leadership skills it takes to make the right call strategically, tactically and financially.
Note: I work every day of the week. There were 2 opportunities that arose over the weekend. These could at the very least be used to facilitate team building exercises or strengthen cohesion. These were also clear signs that the current financial course is not proceeding as planned or on schedule. However, that doesn't mean the final time frame and eventual outcome are different. So these opportunities should be taken advantage of whenever available and to the fullest extent possible.
Idioms:
he early bird catches the worm
There is no honor among thieves
The first mouse gets caught in the trap, the second mouse gets the cheese.
Rats live off humans. They follow us around. Research shows that after the second rat is poisoned by the cheese, it pisses on the remaining cheese so that no other rats will eat it.
Thats better than any two-legged rat.
We have fighter jets worth more than that shit hole. Cut'em lose..
Bad idea, Puerto Rico is a great tax haven for Americans.
you understand nothing
the "country" (colony) is occupied, the Puerto Ricans are serfs, parasites raping them
it's more like get the F out of there Imperialist parasites, and take your minions with you
I understand it quite well. We don't like them and they love to have all the benefits of the fed gov and none of the bad. I could give a rats ass about that place after seeing many of its human exports where a rare few are worth anything as a decent human.
Wow, they can't even pay 1 million?
SH
Israeli private jets descending like locusts into PR. Seeking natural treasures and resources to steal for pennies on the dollar debt.
Chicago is next
Chicago's using federal funds to ensure the gangbangers have the lastest gear and ammo to fuel the south side chaos.
Guerrilla bands are rolling numbers
In the next block of green vine
Gear up JFDI before you get too old.
Don't worry! It's contained in subprime (countries/commonwealths)!
NH Forum live
http://www.iheart.com/live/wgir-am-610-2752/?autoplay=true&pname=1149&ca...
Officially called a “Free Associated State or Commonwealth,” Puerto Rico has been exploited as a US colony since 1898. Its elected governor is powerless – little more than a potted plant ruled by Congress with America’s president its head of state.
Washington never granted islanders control of their lives, welfare and destiny. They have no say over foreign relations, commerce and trade, their air space, land and offshore waters, immigration and emigration, nationality and citizenship, currency, maritime laws, military service, US bases on its territory, constitutionality of its laws, jurisdictions and legal procedures, treaties, radio and television, communications, agriculture, its natural resources and more.
Independence supporters aren’t tolerated – men like Oscar Lopez Rivera, a decorated Vietnam War veteran, wrongfully imprisoned for wanting Puerto Ricans to live free, behind bars for over three decades.
Washington wants to continue exploiting its Caribbean colony for profit – raping and pillaging it at the public’s expense, much like what’s happening to Greece.
Athens is trapped in the euro straightjacket – Puerto Rico in America’s claws. Nominally, islanders handle their own local affairs, much like how Washington DC residents have home rule under full federal control.
The Constitution grants Congress exclusive jurisdiction over the District in “all cases whatsoever.” Its elected government exists at its pleasure. Local laws can be overturned.
District residents have no voting representation in Congress. They’re disenfranchised in federal elections. They’re colonial subjects like Puerto Ricans.
The Caribbean island is bankrupt – but can’t declare it under US law, making it harder to gain concessions from creditors. It’s debt entrapped, forced to pay bankers and other large creditors at the expense of providing vital social services. Its $73 billion debt is impossible to repay.
In late June, Governor Alejandro Garcia Padilla said it needs restructuring. It’s approaching 100% of its GDP – its current fiscal year $4.5 billion servicing obligation is too great a burden to bear.
It’s a wasteland of high unemployment, poverty and deprivation. Force-fed austerity exacerbates dire economic conditions. Islanders are US citizens without enfranchisement on the mainland. They pay federal taxes. They get back pathetically little in return.
In June, the UN Committee of 24 (Special Committee on Decolonization) heard testimonies from 30 island petitioners. Puerto Rico is locked in a destructive cycle of poverty, unemployment, brain drain and economic decline because of US imperial control, they explained.
Petitioners urged UN intervention to initiate a decolonization process – to “stand on the right side of history” helping Puerto Ricans regain their sovereign rights.
Washington calls activist islanders “domestic terrorists.” Oscar Lopez Rivera is one of thousands wrongfully imprisoned for their political beliefs since 1898.
Puerto Rico’s 3.5 million people live in an open-air prison – exploited under imperial rule, heading toward hardening by greater forced austerity, hitting its majority impoverished population hardest.
Puerto Ricans suffer from internal government mismanagement, political greed and dereliction of duty, widespread corruption, deplorable social services, rich and powerful monied interests exploiting ordinary islanders, and police brutality like US citizens and residents face.
One local observer describes two Puerto Rico cultures. On the one hand, its “language, music, art, history and affection.” On the other, its “crime, corruption, deceit and entitlement.”
The latter is killing the former. It’s “dying a slow, painful death.” Puerto Rico is on a downward cycle to oblivion – ordinary people devastated by an uncaring US Congress, its own corrupt government and monied interests demanding tribute, a lethal economic combination.
http://www.globalresearch.ca/puerto-ricos-debt-crisis/5464591
I hate victim cults. You want sympathy? Track the billions in charity individual Americans donated to your earthquake relief.
Tell the fucking truth. Asshole
America is too corrupt for the funds that individual Americans donate to ever arrive
it disappears with the NGOs, charity administration, military (the money Clinton and Bush canvassed for Haiti never arrive to help Haitians, but paid for US military occupation)
Haiti, another sweat shop country that the USA has fucked over to keep the slaves in line
US aid is a back door for arms shipments and military industrial complex profits, nothing gets to the supposed recipients
you are too naive
I am not too naive to see you as you are. Fraud. Poser. Cheat. Liar.
To be here, now, you cut corners. I did not.
You lie. You lie to yourself.
BTW you liar, you sidestepped the 2B question.
Actually Puerto Rico is victim of deficient capital investment. Lending to the Puerto Rican government is tax free, while investment from mainland US into Puerto Rico is not tax free and doesn't even have the benefits of tax cuts that mainland US has.
It's true that Congress has done a lot of damage to Puerto Rico which keeps it in poverty and non-wealth creating island economy.
Puerto Rico has mainland minimum wage, which the income of the Puerto Rico can't sustain very well. (Yeah minimum wage hikes does not create jobs as far as Puerto Rico is concerned)
Jones Act forces Puerto Rico to pay for American Flagged Merchant ships instead of direct delivery from foreigners who can do it cheaper.
Economic policy does not exist to make investment into Puerto Rico attractive and to employ people. Instead you have policy invites government debt to pay for welfare and chronic poverty. Without change of policy, Puerto Rico has no prospects of escaping poverty.
Fuck you, bail me out.
While you're down there, change my diaper.
fuck you, Yankee go home
The same kind of ignoramuses blame the Greeks too.
What part of being colonized and not having any auto determination don't you understand?
You are one of them. You were sold out by your .1%. Not me. Go home while you still can. This place is going to burn.
I'd leave if I had anyplace to go.
Get the fuck out of Puerto Rico, and get the fuck out of Hawaii while you're at it, and Guam, Virgin Islands, Samoa, Marianas, Diego Garcia (from the other Imperialists, the uK)
fucking Imperialists, arrogance as they rape you
I would love to stop paying to prevent you from reverting to your savage history, and send you home. You don't even know the truth about your own history.
Fool
Am I the only one here, that is aware of what corporation resides in PR? We think it not a coincidence that the entire territory of PR is in [fiscal] default? Just what kind of omen could this be? Foreshadowing the fate of another private corporation?
That's OK, they'll probably make the next payment just fine.
Seems like GS sets up the entities to fail, then makes huge profits when it fails.
Look at Greece.
Um,with those PR women,might want to invest in a titanium jockstrap.Get yourself a sound nights sleep....
(google Loreena Bobbitt trial)
Failure to Appropriate, what does it mean?
fucking Politicians, kill them all. "Due to the lack of appropriated funds" = Because we were not able to steal enough money from the citizens, because we just didn't imprison or kill enough of them to persuade them to cough up the money we need to continue our lavish life styles and pay you stupid fucks back the money we stole (borrowed) from you, well, we just can't pay you till next Tuesday.
fuckin politicians hang em all.
Puportedly Loyd Blankfein was just overheard whispering to Jamie Dimon, "Let the looting begin...."
OMG, did it flip over and sink?
No se pueda....pay the bills!
the edge of the empire is getting mouldy. Just break off the bad part and eat the rest.
Puerto Rico, Detroit, California and ....? It looks like little by little the US is falling deeper into the abyss.
Compare Puerto Rico .... with Maduro's Venezuela .... where should we send Dutch Boy ?
Default is only default if it is not a Bankster who is bankrolled by the US FED and their idiot brother the US COngress.
Just so the Vampire Squid got its money "doing the deal" on these now-worthless bonds. At the end of the day, if the pigmen are safe, that's all that counts.