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Puerto Rico Faces "Public Unrest" As Cash Crunch May Leave Government Workers Unpaid
Heavily indebted Puerto Rico was due to meet with representatives of its creditors on Friday in a desperate attempt to forge ahead with a plan to restructure some $72 billion in debt. No offer is expected to be made at the meetings in New York, but the commonwealth’s Government Development Bank says it hopes to provide creditors’ advisors with greater clarity on "the proposed restructuring process,” which GDB says “is a comprehensive plan that will benefit all parties while supporting the creation of a sustainable path forward.”
As Reuters notes, “creditors have been resistant to cuts to their repayment, insisting that Governor Alejandro Garcia Padilla's administration do more to curb spending, boost government efficiency and promote economic growth.”
The GDB is facing a $354 million principal and interest payment on December 1 - some $270 million of that is GO debt guaranteed by the National Public Finance Guarantee Corp. Defaulting on that is bad news and as Moody’s warned earlier this month, a missed payment on the commonwealth’s highest priority obligations “would likely trigger legal action from creditors, commencing a potentially drawn-out process absent swift federal intervention.”
Another $303 million comes due one month later on January 1.
GDB called Friday’s meeting with consultants and advisers “part of our continued effort to maintain a constructive and open dialog with our key stakeholders" while a spokesperson for the governor promised Puerto Rico is doing everything in its power to make the December 1 payment although Padilla has repeatedly made clear that if it comes down to defaulting or cutting off services to the people, bondholders will be out of luck.
Here's a bullet point summary of recent developments from BofAML:
- On 6 November, Puerto Rico released its unaudited quarterly financial and operating report. In the report, Puerto Rico makes plain that it faces a near-term liquidity crisis, has too much debt, limited ability to raise revenues, and a near-decade-long recessionary economy. As a result, it is our opinion that it will likely need to restructure its debt and, absent a voluntary restructuring, will prioritize essential government services at the expense of debt-service payments.
- Moody’s believes Puerto Rico is likely to default on at least a portion of its scheduled debt-service payments due 1 December, which include roughly $273mn of GDB debt guaranteed by the commonwealth.
- Moody’s Analytics opines that, without near-term Congressional action, Puerto Rico may very well suffer an economic depression.
- The US Senate Judiciary Committee scheduled a hearing on Puerto Rico’s financial crisis for 1 December. The Committee’s Chairman stated that allowing a debt restructuring without requiring structural and fiscal reform would be throwing away taxpayer money.
- The Puerto Rican House and Senate approved significantly amended local control board bills from the one the Governor submitted, turning the proposed “control” board into an “advisory” board. The two bills will need to be reconciled.
- The Puerto Rico Highway & Transportation Authority (HTA) cancelled $228.5mn of Ambac-insured bonds, a positive for Ambac-insured bondholders, as the insurer will have more claims-paying ability should Puerto Rico or its public corporations default
And here's BofA summing up:
In a nutshell, the commonwealth warns: it is facing a liquidity crisis, set to run out of cash this month, and revenues are coming in lower than expected; debt is too high, and needs to be restructured; the economy has been mired in a nearly decade-long recession, and economic factors limit Puerto Rico’s ability to raise revenues; healthcare and retiree costs, along with other essential government services are more important than paying debt service; and, with a lack of access to the capital markets and little room under the constitutional debt cap, it is unlikely that Puerto Rico will be able to borrow to finance its operations.
Speaking of running out of cash, Height Securities analyst Daniel Hanson now says the acute liquidity strain may well mean that Padilla can't pay government employees and you know what that means: social unrest.
"Puerto Rico’s liquidity strains are 'serious' and will likely create 'greater levels of public unrest' into year-end," Hanson said this week in a note, adding that the "island’s Treasury Single Account likely has negative cash balance, will make it 'nearly impossible' to meet all government payroll obligations over the next six weeks."
As for whether any of this can be avoided, a Senate judiciary committee headed by Iowa Republican Charles Grassley will meet on December 1 to discuss a legislative proposal to assist Padilla. As Bloomberg notes, "Republicans would prefer that Puerto Ricans solve the crisis on their own, but if they can’t, lawmakers will probably seek to impose 'something like' a federal control board."
But this will likely be too little too late. Expect a partial default and if the government can't make payroll, they'll be trouble in paradise.
We close with a quote and a table from Moody's Analytics (via BofA). As you'll note, under the "pessimistic scenario," Puerto Rico is in for a long and painful ride.
According to MA, under this scenario, “[t]he government would have no choice but to severely cut spending and jobs, pushing the economy deeper into recession, and further undermining revenues and the government’s fiscal situation. This vicious cycle currently plaguing Puerto Rico will only intensify. Moreover, the territory’s standing in capital markets would be irreparably harmed."
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Do not panic! USSA is come to rescue!
Pissed off to epic proportions.
Came here to more closely examine the Stars and Stripes.
Bewbies MIA.
This has to be illegal.
Click on the printer friendy version at the bottom of the page.
Boobies
As I read up and down the thread I think it's official. We all want more titties, Tyler. Bailouts are boring, boobies never lose their appeal, no matter how many of 'em you've seen.
< More boobies on ZH
< Less boobies on ZH
*I voted first for more boobies on ZH ;-)
Latina Lover is getting a time share down there.
Let's not everybody go belly at once now, ya' hear.
The dude who used to post up nothing but porn links got banned just a couple days ago. Now that's irony.
Never go up against the establishment.
Puerto Rico to be the 51st State
FUNDAMENTAL TRANSFORMATION
CHANGE YOU BETTER BELIEVE IN
send them some Syrian "refugees" they're good for the economy...just ask Europe
You mean that he should not have directed them to cool, free sites, like Beeg or Pornhub or Redtube?
I guess I won't provide such links, now that I know.
"Latina Lover is getting a time share down there. "
Is Latina Lover a guy who loves latinas or is Latina Lover a latina chick?
Latina Lover a latina chick?
Read his profile.
Actually, they are trying clamp down on non property tax paying absentee owners. Primary residence are tax free.
There might be great opportunities for Gringos to retire there.
Fine pair at 1:25
https://www.youtube.com/watch?v=Eh2PjkzW20w
God bless that woman indeed.
I think if those boobies belong to a certain club, we might not want to see them.
For example I doubt if many want to see ones the belong to Surrendered Against Gravity, or SAG for short.
Coming to all nations that have a banksterati designed debt-based Ponziconomy system... so basically everywhere.
P.S. Get ready for the Globalists "gold-backed" IMF-SDR that Volker was yammering for...
Titties AND beer!
https://www.youtube.com/watch?v=SgyeshD8RJY
Plenty of those in hell.
https://youtu.be/WzzWEeiUf3Y
Another take:
https://www.youtube.com/watch?v=LZVpOg8qHL0
FYI: Puerto Rico and the other U.S. territories get to help nominate the presidential candidate in the primaries (hillary or bernie, donald or Dr C) but cannot vote in the general election because of the electoral college thing. That is why they are pushing it now, during the primaries to get support.
Puerto Rico > Puerto Pobre
Adios motherfuckers
Where is my clickbait, dammit. Never promise something like that then fail to deliver. That's as bad as promising to raise interest rates and then failing to deliver.
Have no fear, the last 'Ricans will move to the mainland and be reliable Democrat voters.
If you like your cockroaches, now you will have to pay for them...
I say don't let them have their first week of June Puerto Rican Day Parade until they pay their bills. That will show them!
Nobody leaves the island until the bankers are paid...
No one here gets out alive.
Can't they just self-declare themselves as GayBLT Colored Refugees?
That's gotta be worth a bunch of immigration points. Or points for more HP call centers.
easiest headline u guys ever posted; just cut & pasted from a few months ago & injected "puerto rico" where "greece" was
Moody’s Analytics opines that, without near-term Congressional action, Puerto Rico may very well suffer an economic depression.
Way to step out on a limb there, Moody's!
Their Head Witch Doctor is Captain Obvious.
I resent that. I'd rather work for Satan himself than Moody's. You are microaggressing into my safe space.
It should be pointed out that Moody Analytics projected that Obama's $823 billion dollar stimulus program would generate new 400,000 job a months... LOL
Trump will now switch from bashing Mexicans to bashing Syrians to bashing Puerto Ricans?
I say fuck all three...there I said it.
Para bailar la bamba
Para bailar la bamba
Se necesita una poca de gracia
Una poca de gracia pa mi pa ti
I got $20 real cash money says Brother Obie strokes a pen across a check for this one.
Sucker's bet!
DaddyO
PS: If you're setting at the poker table and you don't know who the patsy is, it's you sucker! The current patsy is the American taxpayer...
I dunno. Do the math. We can pay them to stay in PR or we can pay for them in Miami. Just speaking for myself but I don't see a big demand for Puerto Ricans here in East TX. We have a surplus of Mexes.
Damn... I wanted to see a bigger pic of the chick in the bikini...
Totally why I clicked. Already knew the greek fix was on
https://www.google.com/search?q=puerto+ricans&biw=1920&bih=955&source=ln...
DaddyO
gracias!
hope those gov workers don't have AR 15s and hollow point bullets.
OMG!!! The parasites going without their pint of sheeple blood.
Puerto Rican women are the best in bed
So are those Catholic Irish women. Tigers
But the Catholic Irish woman don't age very well. Their faces will resemble a catchers mitt after 40...
The Puerto Rican's can get some after market work done for cheap and then you have a rebuilt rican milf! Ha! Rebuilt Rican! Hahah!
They turn into Femi-Nazis.
CRAZY women are the best in bed. It's unfortunate, but true.
Not if they're English. Just sayin'....
Sadly, I found that out that Truth, when it was too late. ~25 years ago.
No one ever taught me, what I learned the hard way: "Never, ever get into a personal or business situation, that you don't know how to get out of at an acceptable risk and cost".
Cut those pathetic In-Betweeners loose already.
I said the same thing about 15 years ago.
Puerto Rico has more drawbacks than positives.
It is a large tropical island and yet no one wants to go there. I bet Cuba has more tourism than Puerto Rico.
That in itself very telling.
They can use GoFundMe.com.
Janet will bail them out.
Then again it could be their finest hour.
Just work harder or bootstraps or something, that's what they like to tell us workers.
Tyler-- we need pics of hot girls like the Brazilian posts. Do you really think I care what happens in Pto Rico or Brasil ?
Anywho, fear not, Obamination will save the day.
Puerto Rico should go Iceland. I see a slight problem but do not want to be offensive.
Hmmm…. Draw your own conclusions.
Average IQ by Country
Country/Region IQ (2003) IQ (2010)
Iceland 98 102
Costa Rica 90 89
https://www.iqtestforfree.net/average-IQ-by-country.html
My conclusion is that you need to check up on some geography.
Islands all look the same?
Puerto Rico 84 84
Puerto Rico could be beautiful island except the people make it shitty and dirty. PR is insanely corrupt with lots of zios running the show.
Immigration to the States lowered the IQ in both places
.
They will of course bail them out or bandaid the situation to keep the wheels on just a little bit longer. That goes for just about everything else, they have to keep the economy/welfare programs on some type of life support until they achieve their goals, whatever that may be. A problem may arrive if it takes too long to achieve said goals and then the apparatus begins to struggle to keep the wheels on, if people begin to go ape-shit that could provide a barrier to achieving goals.
It's much harder to justify war etc. when your populations are starving.
It's funny that a so called government is being rated by a financial analyst corporation like Moody's, as if it was any other company to be broken up and sold off.
Keep a close eye on PR, because if they go the way of Greece, then the handwriting is on the wall. The US Fed and the govt. can monitor the commotion in the streets closely when they start cutting welfare, pensions and SS payments.
I have a feeling that PR is more a test zone than anyone wants to imagine. Little by little, companies go broke, supply lines are disrupted, people have less credit, need more cash, don't have any.
With any luck - for the rest of us gringos - will be able to see what the feds have in store for the general US population. We've been waiting for the moment of truth for a long time, but the Fed and the network of goldman-led central banks have many tricks up their collective sleeves, and they're not even close to done yet.
My best guess is that we enter recession in the first quarter of 2016, though it won't be "official" until summer, just in time for the election fiasco to begin in earnest. Lots of finger-pointing, and the Fed stuck at .25-.50 in FF rate. It's a crap shoot, but I'm betting on Trump beating Hilly (fair warning: I am wrong at least as often as I'm right), but either way, shit sandwich is on the menu.
If Clit-on wins, we get $15/hour min wage, huge layoffs, massive disruptions; if Trump wins we get draconian measures which will, however, eventually fix the economy, sort-of, depending on where you are (hint: West coast is fucked either way). Trump should be better but who knows?
Still, keep a close eye on developments in Puerto Rico. Coud be a template for greater North America.
When "vital" govt workers stop getting paid then you know the shit is getting real. All govt workers must get paid because they are ***so*** important. (F em!).
Govt workers = oxymoron
any government worker I EVER came into contact with should be unpaid
hookers fixin to get cheap in PR.
Puerto Rico just agrees to take all 10,000 syrian refugees in exchange for the cash. Everyone wins
We gonna come round at twelve wit some Puerto Rican girls that's just dyin' to meetcha!
Some girlz give me money.
Some girls buy me clothes.
Don't bail them out: Puerto Rico will be a financial disaster
Bail them out: Puerto Rico will be a financial disaster
No problem... Just tax all the rich people in Puerto Rico
Who?
but a big positive for moonlighting jobs and "alternate careers" in Puerto Rico.
by day - management specialist, by night - gigolo
by day - police chief, by night - bootleg operator
it gives you a warm fuzzy feeling that we're going back to the Roaring 20's.
it's fiat man, pay them a milion each & give them 5 trucks with financing over 20 years!
Man, have you a lot to learn. Only Muslim "freedom fighters" get pallets of Franklins from DC.
In a better-ordered world credit agencies would make note of clear risk of loss on government bonds as soon as it was clear that the fundamentals were piss-poor with no hope of recovery, not after.
Back in this one, they were rating Detroit investment grade until well into the 21st century. Shouldn't Moody's have been sounding alarm bells on Puerto Rico years ago?
(It couldn't have taken THAT long for the smart money to get out.)
I support Puerto Rican independence.
R. Hessel
I hope you speak as a resident. Otherwise you are not so wise. The independnece of Puerto Rico if you know anything of the culture would shortly convert it to Dominican Republic status with machine gun toting goons on every corner. Not much later national guard brigadier general as dictator. Actually despite the current idiocy in Washington DC the USA has a fairly promising future after the next serious financial collapse takes place. There is still the vague possibility of the rule of law returning to the USA someday.
Padilla will default before not paying public employees. The public employees in the island are union and go on strike at the drop of a dime. The governor (any of them thru history) depend on the public employees union to stay in power and out of jail. Most of the governors for the last twenty years get elected, pilfer the public coffers and then get defeated by the next in line and move over to consulting jobs with the same agencies they pilfered while in charge. Governor "Chuletts" is as corrupt as the rest. If he doesn't play along he will find himself sharing a cell with a Dominican named Bubba. If he defaults to the banks, he will have a stapler accident. Decisions, decisions.
"a plan to restructure some $72 billion in debt."
How did leaders manage to go so deep in debt and what did they spend the money on?
That kind of debt can buy lots of luxury real estate in New York. I would Follow the Money, I bet some real fraud turns up.
Aren't boobies grand?? :D
"Latin America has tremendous economic potential.. and always will" ex UK Ambassador to Brazil
Padilla has repeatedly made clear that if it comes down to defaulting or cutting off services to the people, bondholders will be out of luck.
They make it sound that is a bad thing. Fuck "bondholders" most of which loaned PR the cash not expecting PR to pay - but that the US would guarantee the repayment.
I don't see how Ambac can cover. What does the insurer do, just pay the interest until maturity and hope inflation shrinks the principal? How the fuck does this work? Ambac doesn't have the market cap.
its the obama way -- Give them some free shitzz
Long ladyboi dating sites. Best little ladybois around...
Kik cdroxi
Unrest... or blood in the streets?
The most firearms deaths in the western hemisphere occur in PR already!
So it seems like we have found the only excuse that would stop a puertican from partying...
QE 4 = Puerto Rico, Chicago etc. Bonds
This could be a good thing.... tourist Dollars will buy a lot more....fun
You tell people, and you tell people but they refuse to listen. All thumbnails featuring young women must be included in the body of the article.
It has only been a matter of time, waiting for PR to blackmail the U.S. into another bailout. Only questions are: how much and how soon? PR is the Greece of the Western Hemisphere; politicians in PR KNEW all along that they would need to come to papa U.S., they were simply spending as much as they could meantime and enjoying life. Greece had the same idea -- there is NO WAY the EU and the IMF would allow Greece to default. Now, there is NOW WAY the U.S. will allow PR to default, and the PR politicians knew it all along. Sad state of affairs, this.
Because that has always been a problem before right?
Since Puerto Ricans do not pay federal income taxes......why exactly should those of us who do bail them out????