This page has been archived and commenting is disabled.
Obama Unveils Roadmap To 'Bailout' Puerto Rico: "New" Bankruptcy Rules & Federal Fiscal Oversight
America is not Greece, but judging from the Obama administration's just-unveiled plans to bailout Puerto Rico's disastrous debt situation, the American territory may have to sacrifice a little more sovereignty to get some relief. Obama is pressing for Congress to give Puerto Rico (PR) sweeping powers to reduce its $73 billion debt burden through a form of bankruptcy protection not now available to American territories and will also ask lawmakers to establish an independent body to monitor the island’s fiscal affairs (a la Troika). While the proposals likely face an uphill battle in Congress, as NYTimes reports, both Democrats and Republicans are under pressure to respond because Puerto Ricans are flooding the US, particularly in central Florida, and are becoming an increasingly important voting block in the 2016 presidential race.
Puerto Rico is teetering under debt amassed from years of borrowing as the economy failed to grow and residents left for the U.S. mainland. Governor Alejandro Garcia Padilla is seeking to persuade investors to accept less than they’re owed, saying tax increases and spending cuts alone won’t be sufficient to eliminate the government’s budget shortfalls.
Creditors say that the island’s government has been seeking to portray the fiscal situation in Puerto Rico as beyond repair, hoping to force the administration and Congress to act. As The NY Times reports, on Wednesday, Puerto Rico took the unusual step of announcing that talks over restructuring about $750 milllion of the island’s debt had broken off, a move that some creditors saw as posturing to Washington for help.
It appears to have worked... (as Bloomberg details)
President Barack Obama is pressing for Congress to give Puerto Rico sweeping powers to reduce its $73 billion debt burden through bankruptcy, escalating administration involvement as the Caribbean island’s access to cash dries up.
Puerto Rico would be provided with a form of bankruptcy protection not now available to American territories. Administration officials also called for lawmakers on Wednesday to increase health-care funding for Puerto Rico, extend tax credits to the poor and put independent oversight in place to monitor the government’s budget.
The details of the proposals are sparse as yet, but as The NY Times adds, there is some willingness, particularly among top Senate Republicans, to work out a compromise on the bankruptcy issue, according to a person briefed on the matter.
But the Republican leadership would be willing to grant Puerto Rico access to the bankruptcy courts only on a limited basis, and only with strings attached like the imposition of a federal “control board” to oversee the island’s finances.
Control boards have been used in cases of severe municipal distress to take the power to spend public money out of the hands of elected officials. They do not generally have the powers that bankruptcy judges do to abrogate contracts, such as labor contracts and promises to repay debt.
But any such move faces political headwinds...
These changes “are going to be extremely hard to get through both the U.S. Congress and the Puerto Rican legislature,” said Matt Fabian, a partner at Concord, Massachusetts-based Municipal Market Analytics. “This is a Congress that gets almost nothing done. So to expect them to get something controversial done at the request of the administration right before an election is difficult.
Though, there is a chance...
Both Democrats and Republicans are under pressure to respond to the Puerto Rico crisis. Largely because of the island’s economic problems, Puerto Ricans are flooding the United States, particuarly in central Florida, and are becoming an increasingly important voting block in the 2016 presidential race.
According to Bloomberg, Treasury Secretary Jacob J. Lew, National Economic Council Director Jeff Zients, and Health and Human Services Secretary Sylvia Mathews Burwell said the steps are needed to revive Puerto Rico’s economy.
“The decade-long recession has taken its toll on Puerto Rico’s finances, its economy, and its people,” officials said in the statement. “To reward work and break this vicious cycle, Congress should enact proven, bipartisan tools for stimulating growth and rewarding work to people living in Puerto Rico.”
The situation in Puerto Rico “risks turning into a humanitarian crisis as early as this winter,” one senior administration official said, speaking on condition of anonymity because the person was not authorized to speak publicly.
But, it is not just politicians that will be hard pressed to pass the bailout...
The proposal is likely to meet resistance from many investors in the municipal bond market according to Brandon Barford, a partner at Beacon Policy Advisors LLC in Washington and a former Senate Banking Committee staffer.
“Including ‘super Chapter 9,’ significant new social spending, and demands for respecting Puerto Rican public sector pensions when mainland pension funds would register losses from restructuring are all a bridge too far,” Barford said.
Finally, there is the unintended consequences...
Federal law allows for cities, counties, special districts and the like to seek bankruptcy protection if their states agree, but the states themselves are excluded. There are concerns that if Puerto Rico gains access to bankruptcy, fiscally troubled states like Illinois might try to follow suit.
* * *
So the bottom line is that Puerto Rico is Greece... laws will be changed to enable the proligate spending of the past to be bruched under the carpet, and Federal oversight of fiscal affairs (i.e. all government in a nation whose finances are so dire) will be handled by an 'independent' body (just like Troika) and that will enable Puerto Rico to borrow more (likely from the US taxpayer via some subsidized router) to fund what officials call "growth initiatives."
Because:
“The situation in Puerto Rico is urgent,” one administration official said. “Without economic growth there is no path out.”
So the same as the rest of the world then?!
* * *
But for now, we celebrate, President Obama will save the day...
»
- 40525 reads
- Printer-friendly version
- Send to friend
- advertisements -
fuck u pay me...........
Obama screwed the GM bond holders. For no other reason than that he COULD DO IT. Now it the turn for idiots holding Puerto Rico bonds.
They will get nothing. I guarantee you. NOTHING.
Article:
“The situation in Puerto Rico is urgent, WITHOUT ECONOMIC GROWTH there is no path out.”
No kidding……., Jose.
.
lemme guess...that's a pic of 4 trans-jenner puerto ricans, right? Well they can keep 'em!
And here's the next guess. O-fuck-tard will ship every fucking PR to America and sign 'em up for EBT, obamycare, and a big fat fucking D card to vote with.
That's the "island that will tip over", folks.
Remember this fuck-tard? https://www.youtube.com/watch?v=mnk0tIqsbYM
Yep, bitchez....they're gonna "tip" Puerto Rico right the fuck over onto the mainland of the U.S. right along with all the other millions of illegal invaders they will bring in from the southern border; tip the scales of voting to destroy what little is left of the Constitution and wage all out civil war against the rest of America as "bigots" and "racists".
MOLON LABE!!!!!!!!!
That's really all we'll have left against the treasonous gov-scum.
They're creaating the beginnings of another American Civil War. If that's what they want...then let's fucking give it to them.
Wait..someone's knocking at my doo.....
FUCK THEM!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
So, bond holders get fucked again, while PR gets on the US government tit, funded by who?
Funded by fiat money printed out of thin air.
Do the math. What percentage of the population holds state or muni bonds? 0.1%? What percentage gains if the debt vanishes? 99.9%?
Obama wants to set a precident for his butt buddy the ballet boy in Chicago. "Super chapter 9" coming soon to your own state too.
I love Puerto Rico; I used to go there alot until it became too dangerous due to poverty + drugs. The people there are great and the food cheap and delicious. They had a fantastic tourist trade there beforehand. I hope they turn that place around.
Good luck PR!
PS: Any of those Chicas get lonely down there give me a call. There's still room for one more.
PR Chicks w/ Dicks who will vote against our Constitution.
way to sell out, DBag.
Simple solution - import some anti-Russian Nazis and ISIS members and you are good to go. The spice will flow.
Oatmeal heads!
Just throw it on the balance sheet! Done before dinner!
Sell the island to China.
Money printing = you and me. It's the perfect scam. Gummint will simply blame their fave straw-men, the Capitalists, for raising prices. The government edewkated dipshit population of the former Untied States of Amerika, will eat it up like a dog licks his own balls.
We are fucked.
so apparently BHO can just make it all up as he goes along , hey ? new BK laws and all ? is something seriously wrong in USSA today or WTF ?
everything this guy has touched has turned into a pile of shit and he is still allowed to fuck up.
Buying bonds is a risk, they took their chances and lost. As a US taxpayer, I should not have to cover a risky investment in bonds just like I should not have bailed out Wall street after the 2008 crash.
I think it's Guam that would tip over. Guam is where balsa wood grows and as such is very unstable. In Puerto Rico everyone could stand on the same side of the island and it would barely move.
Keep your arms close and your powder dry, folks - you're gonna need them real soon
It seems like a ZH politic to come out with Brazil and Puerto Rico news with hot chick pics. BTw i have no problem with it.
91% of Hispanic immigrants are on welfare and remain on most of their lives.
It's forbidden to investigate this but one group did.
As the video author says "If your hands are in my wallet, you have my attention."
Share this forbidden knowledge anywhere and everywhere you can.
https://www.youtube.com/watch?v=4u1J6EEhkyM
They should get nothing. I know moral hazard is such a quaint concept though
Then this is how the bond market dies. Who is going to risk any capital, knowing the contract is broken from the get go. Let the Fed buy them all. Then they can call them "collateral".
There are openings in the Credit Default Swaps niche I'll betcha.
It only takes words to commoditize an Island paradise like PR.
You're funny, you're a funny guy.
oh yeah?????? Funny how???
https://www.youtube.com/watch?v=yL9rSwrsMHw
More fukn freebie giveaways from the Communist Executive Officer fudgepacker. The turd needs its skin sandpapered off & buried in salt.
It´s way worse than just that. The deriliction of duty by Congress and the executive branch has been for decades absolutely criminal. The only reason Obama is saying anything at all right now is because time ran out for PR. If the can could have been kicked until he left office, he wouldn´t have reacted at all to PR´s crushing debt levels. He would have just continued on in cruise control, and just dumped this problem onto the next administration. They don´t care about us. George Carlin was right.
More fukn freebie giveaways from the Communist Executive Officer fudgepacker. The turd needs its skin sandpapered off & buried in salt.
If you like your Puerto Rico, you can keep your Puerto Rico.
salt of the earth..........
''Capitalism is Usury. Its defining belief is ‘return on investment’. This is an extension of the ‘time value’ of money, which is the central tenet of modern economics. Capitalism is unthinkable without banking and banking is institutionalized Usury.
Usury is Plutocracy. Compound interest makes it unavoidable that the very richest own everything in generations. ''
https://realcurrencies.wordpress.com/2014/06/05/capitalism-is-jewish-usu...
What a load of bollocks. Where the fuck did you dig this shit up from?
WTF is this crap and why are you posting here instead on Huffpo or some such "progressive" lies friendly site?
The replacement & harelquin-Usuary is a huge black cock in your ass as you defend the bankers right to pound you like a gimp. Funny you tell soemone educating you a bit on usuary and you tell them to go to huff post? Glitch? Ironic as you bash a truly core conservative value of usuary being not ok. Usuary is one of the most fucked up math/slavery scemes in the history of the human race. But whatever some dudes like the cock. Good for you. Dick in your ass and shit out your mouth. On zerohedge. Classy.
So who ever said borrowing was good or even prefered? Taking on debts has always been a bad idea, and saving has always been a good idea.
The only time the bankers profit from you is when you borrow. So dont, if you hate them so much.
The real issue here is politicians borrowing money to spend more then they are willing to tax. This is flat out theft from future generations, as evidenced by all the boiling debt bombs out there like Greece, Illinios, California....every where with generations of government debt.
The bankers are greedy and always get paid. The politicians are slimy and always weasel their way into power. The people are stupid and continue to let it happen. The press sits back and promotes the stupidity of it all.
Because for most americans to buy a house one must particiapte in the usuary of manifested fiat money. Pay $250k for a house and its actually $500K after a 30 year loan under the usary system. that is fucked up. There are a great many who have spoken out of the evils of this system. What has been determined is a flat fee for a loan. Without compound interest. Saya flat $50K. 20% or whateever without the compound interest. That is reasonable. Especially when the "Banker" isint loaning the money but owning the rights to the newly manifested "loan."
Puerto Rico is a goner, an advance look at what is going to happen to the rest of the United States as the banksters, the politicians, the Wall Streeters and the druglords (with their cop accomplices) steal everything.
Puerto Rico is like a debt proxy war.
But can we keep the Puerto Ricans in Puerto Rico? Please!
Illinois next in line.
Of course, with such cases, the paste in the tube will not climb.
"through a form of bankruptcy protection not now available to American territories"
PR is the guinea pig for the big massive default by any and all
the muni's are going - they work out the rules on PR and then the deluge - NO pensions -forgetaboutit!
Clearly this is a preemptive move to help ILLINOIS. The media will portray this as a PR issue, but the law change will very quickly and quietly be employed by ILLINOIS. Dem are some smart lil' plotters.
Is that Jenner?
Rican women...... Fine at 18 whales by 30, the men, 90% of them over 45 are on "disability"
I remember back in high school, I was schtupping a fine young rican woman. Saw her again 15 years later and she was a sweathog. Nasty stuff. I was embarrassed for my dick but it was good stuff at 18
I am sure that has never happened with 'Merican women, European women, or any other nationality.
It is true there is nothing hotter than an 18 year old PR girl, usually with 3 kids..
I wasn't aware Puerto Rico had been so thoroughly Westernized.
Was benig pushed as a Tax Haven by Peter Shiff and I think Simon Black.....
Fire up those printing presses boys! Time for re-election!
And magically, in five years American companies own everything on that island.
Have we reached 'fuck it' time yet? Maybe only for those of us well armed and trained perhaps.....
Just lie down and take it....it hurts at first but you get used to it.
Informal Poll....not based on science.
I'm voting for this guy next time.
http://www.theindychannel.com/news/local-news/man-barricades-himself-in-...
He looks happy.
Now if they can just figure out some way to apply these changes to Chicago...
Unfortunately, this is Obamas answer to everything. Students have too much debt? Don't let them fail and force the colleges to cut costs and reduce tuition, just to give the bill to the taxpayer.
Is your state bankrupt from inept management? Why suffer when you can give the bill to the taxpayer?
Did the banking system overextend itself? Don't let the equities of the banks go down, just give the bill to the taxpayer.
Purchase a house that you couldn't afford and find yourself underwater? Don't worry about making payments or having to move out. Just give the bill to the taxpayer.
Eat too much junk food, smoke and never exercise? Require thousands of dollars of medical care as a result? Don't worry, just give the bill to the tax payer.
Stock market goes down 5% after tripling over the last seven years? No problem, have the Fed step in and bail it out and give the bill to the saver, bond holder and, eventually, the tax payer.
Nobody gives a fudge about the taxpayer. The people who really pay are the poor people of the world who have to not eat the inflation as the shit just gets monetized.
We all would get our view across a lot better if we focus our attention on the victims who suffer most, the poor and working people of the whole world who have to eat the inflation.
Must be all of the zombies in the government employment numbers who are going to pay for this. When all of this emplodes the perps will fade into the shadows, there is going to be so much going down nobody will even know where to start hunting to prosecute first. Wish I knew how long the bandaids will hold out.
No, your children and grandchildren will pay for all of this.
And......the same investment funds expecting a major reaming are also the same ones
in the Ukraine and Greece and elsewhere.Worried about a lynch mob at the next shareholder
meeting? What's with the crap logic about PR citizens moving en masse to Florida and affecting the
voting gerrymander? Bailing out a country which is badly run,hugely in debt,because they have the
right to settle in the US?
How about this: THE PR BOND HOLDERS SHOULD HAVE DONE THEIR HOMEWORK.
THE DEBT WAS NOT RISK FREE.DEFAULT NOW OR TEN YEARS FROM NOW.
THIS IS VERY OBVIOUSLY POLITICAL BLACKMAIL OF THE CRUDEST VARIETY.
This will turn out to be our very own Greece when all is said and done.
When someone says they need ten dollars urgently,they really need $150.
Amen, since when are bonds risk free?
Uncle Warren wants to give away his fortune before he dies. He should just write a check and wipe PR's debt clean before he croaks.
So, lets cut thru the smoke and mirrors:
New law--probably can written to apply to States too.
Who probably holds a lot of State issued bonds---The Fed? Federal Pension Plans?
Could this new law be written such that a significant bond holder could imply you are basically bankrupt and demand immediate payment (which everyone know is not possible)
Then, states could basically loose their state sovereignty thru the "government oversight"
Something stinks here--this administration is the king of top secret agreements that keep hidden from the public for several years after their implementation.
You are a good card reader, J Mahoney...
This whole damned government STINKS TO HELL!
The FOOLS JUST ELECTED RYAN TOO!! America is burnt toast and crumbling by the day.
federalization of everything will eliminate local government - same with TTP these are bookend copies of usurping the constitution
Bingo. How do you think they passed the Social Security Act? State / federal cooperation via the compact clause. The Staes gave the feds the power to do that which the States themselves were constitutionally prohibited from doing.
Puerto What
they can always whore their women for freign cash
They'll do anything to prevent consequences of horrible fiscal policies. The liability simply moves up the food chain while the insane spending, unsustainable promises, and general lying to the public continues.
Why can't Obama offer the US bankruptcy protection?
Or why can't obama grow some veggies on the white house lawn and share those across america...problem solved!
The sooner the U.S. nationalizes Peurto Rico, the safer we will all be.
All the crops in California will shortly dry up and blow away. Dust Bowl!!! No more California lettuce for New York. Especially if a small earthquake wrecks their canal system. Forget about "reverse osmosis".
It is over. No more veggies and cattle from California. Coming very soon!
The outer, crime-infested regions of Puerto Rico are all that will save us.
Unless we want to go on a national hunger strike.
Think about it.
Biggest problem they have in CA right now is too much rain. Go figure.
I hear the slave market is hot right now. We could try selling Puerto Ricans into slavery.
The name of the game is bailout.
With what? Dollars? From Where? Russia? The US Government is BROKE and so is the FED. PR can become the 1st US Police State and nationalize everything (with a little CUBAN HELP).
The Fed can still keep printing. Someboady is still buying those TNs.
Why don't they just lie about their growth.. you know, like everyone else.
Corrupt Fuckers in charge in the P.R. have known for a couple of decades they would get away with this bullshit.
I'm sure they have bolt-holes in New Zealand for when things get crazy.
The first bailout I fully agree with. We have to preserve such a beautiful half naked bodies.
But seriously it is a bailout of the HFs and PEFs that against all the warning and red light flashing were feasting on Puerto Rico junk quasi "sovereign" bonds just few months ago. But still after US, Europe and Asia and especially Greece, Ukraine, PR is another case of loading governments with Private debt 100% on a dollar to practically seize all the future tax income for decades to come from governments all over the world in a neo-feudal crony rentier ploy and to collapse global economy while at it.
More on that can be found at:
https://contrarianopinion.wordpress.com/economy-update/
Sure they'll bailout the state of Chicago (IL) as well.
Kyle Bass on PR... two years ago.
He was on a roll there.
reminds me of the old joke, "How can I be broke, I still have more checks?"
I think Dyler Turden probably meant to write...
"Puerto Rico is teetering under debt amassed from years of borrowing as the economy failed to grow and residents left for the U.S. mainland to play prefessional baseball."
That was Mexico and NAFTA.
PR has a model to follow.. Cuba.
Om another note, the rules have to be br0oke for the 'big one', Illinois will be the second 'test'.
.
We're stuck with niggers, but we're not stuck with "The PR" unless we want to be. Ricans love to have it both ways; they want independence, but the MFers go running to the rest of the taxpayers to bail them out. This is the script: IRRESPONSIBLE THIEVES WHO PISS THEIR BUDGETS AWAY CAN RELY ON THE FISCALLY PRUDENT TO BAIL THEM OUT. WHAT IS THE FUCKING POINT IN BEING RESPONSIBLE WITH A STATE BUDGET, IF ANOTHER STATE {OR TERRITORY} CAN RAID THOSE FUNDS. CONTACT YOUR....NO, ON SECOND THOUGHT, THAT NEVER DOES ANY GOOD. FUCK IT.
As opposed to the extremely responsible USG? or lily white Illinois?
IRRESPONSIBLE THIEVES WHO PISS THEIR BUDGETS AWAY CAN RELY ON THE FISCALLY PRUDENT TO BAIL THEM OUT.
Always the case. And that will happen, indirectly, in the USA as well.
For many years, I lived less than an hour drive from Ill-noise. Had very good friends in Danville I used to go see from time to time. Think of Chicago as a giant vacuum cleaner, sucking all the wealth out of the rest of the state, then you get an accurate picture. The rest of the state resents Chicago, in the same manner the residents of the state of New York resent New York City {most of them anyway}.
Another backdoor bailout for Goldman Sachs?
I have met several black conservatives in my life. There are more of them than you think. I can't say that about Ricans. I have NEVER met a conservative Rican. They are just half a step up the evolutionary ladder from Haitians {who are on the bottom}. They are invading Florida like locust. You should see how they let their 14 and 15 yr old daughters dress and leave the house. It is no wonder they all have their first child before 17 {most even before then}. I saw the most disgusting thing a couple of years ago. Some little Rican teenie bopper dressed like a lil' slut, shopping at the juniors department with a man about 40-50 years of age. You could tell they were not related by the way the man was looking at her; the same way a wolf looks at a lamb, and rubbing his hand up and down her bare legs as he grunted like a boar hog. It was both obvious and disgusting.
this is bull shit we just use that little island for target practice, was there any bailout this fuckin loser president did not like?
EVERY SINGLE DAY Obama comes out with some more shit! WTF!
nevermind -50 backrupt mofo
Keep sending the 65 cents a day.
.....won’t be sufficient to eliminate the government’s budget shortfalls.....
Gotta love how the parasites in gubbermint use words. The above is saavy gubbermint-speak for the following:
'We spent everything we took in the form of taxes and THEN some, thus incurring a shitload of debt that we have no way of paying, because we're a thieving gang of corrupt bureaurats.'
Notice how EVERY LEVEL of gubbermint (Fed on down to local yokel county) uses the terms 'budget shortfalls' in lieu of the far more accurate 'rampant corruption and incompetence'.
pueto rico bankrupt
Is Puerto Rico a state – they’ll need gun and ammo shops.
The EBT program ensures runaway birthrates - there’ll be no end to customers.
Sorry. No sympathy for PR. They have gotten where they are through graft and corruption and distribution of money borrowed from others to friends and supporters. Who do they think they are? A Bank?
Custom BK rules?
Made with a wave of the mighty hand?
I'm confused.
I thought that the top govt guy, with only executive power was called a "President".
This guy does not only that, but also makes & sets aside "Law" at will, including "Laws" that apply only to one entity. That's called a "King" not a President.
They'll never work.
Trust super-progressive Obirdbrain to do the most criminal thing possible in any circumstance.
Why is Obirdbrain NOT in jail?
Grimaldus
....Sure! And while we're at it let's bail out Venezuela and Argentina because they've all learned their socialist lessons the hard way and will never make all the same mistakes again.
Lemme guess, a trillion or two will wind up in stawks of TBTF US companies. QE on the sly.
So hit up the tax payers for another bailout then?
I rather bail out Brazil...girls are better looking
Bailouts are never aimed at real people nor are they aimed at "voters". Bailouts indemnify the banksters against losses, period. Heads they win, tails they win...because they cheat.
When the student loan bailouts arrive, and you can be sure they're coming, it will be the same thing. Bailouts for lenders will be characterized as a rescue for defaulting borrowers, who will probably get no real relief at all. For these reasons, it makes me crazy when I see people put themselves heavily into debt at an early age, whether for college, home or cars.
This is not a new issue. Thoreau wrote about the way a farm with a mortgage typically proved to be a ball-and-chain almost two hundred years ago.
Peter Schiff and every other poor schmuck that moved businesses down there are about to get proper fucked.
"a humanitarian crisis this winter..." When the temperature goes from 90 to 85 degrees?
I mean is everyone sure that they have borrowed too much? Doesn't Krugman say they haven't borrowed enough and that is the real failure here?
/sarc
Puerto Rico is not unlike Greece in that they just want to erase all their prior debt and start fresh with a new expanded line of credit.
Why not? The Fed can just create the money on their computers and give it to PR's lenders.
Puerto Rican bond holders, that would be Merkel's base