Fed's Dudley Sent Puerto Rico A "Plane Loaded With Cash"

In the days following Hurricane Maria's devastating blow to Puerto Rico, air traffic on the island came to a complete standstill as airport damage prevented commercial pilots from servicing the island.  That said, with the island economy grinding to a halt, San Juan International apparently managed to find a way to accept one very important plane...a "jet loaded with an undisclosed amount of cash" from New York Fed president William Dudley.  Per Bloomberg:

Less than a week into the massive blackout that followed Hurricane Maria and essentially turned Puerto Rico into a cash-only economy, one top local banker became so concerned about the supply of bills that he called the Federal Reserve.


William Dudley, the New York Fed president, put the word out within minutes, and ultimately a jet loaded with an undisclosed amount of cash landed on the stricken island, according to Richard Carrion, the Popular Inc. executive chairman who made the call. He and Chief Executive Officer Ignacio Alvarez reflected on the chaotic early days of the crisis in an interview Friday at their office in San Juan’s Hato Rey financial district.


“We thought the cash was going to be a problem,” said Carrion, 64, whose bank is the biggest in Puerto Rico by deposits. “The magnitude of this is something we haven’t experienced.” Suzanne Elio, a New York Fed spokeswoman, declined to comment on the money shipment.


The executives described corporate clients’ urgent requests for hundreds of thousands in cash to meet payrolls, and the challenge of finding enough armored cars to satisfy endless demand at ATMs. Such were the days after Maria devastated the U.S. territory last month, killing 39 people, crushing buildings and wiping out the island’s energy grid. As early as the day after the storm, the Fed began working to get money onto the island, according to a person with knowledge of the matter, who asked not to be named discussing the Fed’s preparations.


Of course, as we've noted before, nearly three weeks after Hurricane Maria made landfall in Puerto Rico on September 20th, some 90% of the island is still without power and the resulting damage to the local economy will undoubtedly have long-lasting effects.

Nine of ten Puerto Ricans are still without power, half the island has no drinking water, schools are closed, there’s a government-mandated curfew -- and businesses everywhere are trying to cope. At Popular, half of branches remained shuttered Friday, as did two-thirds of ATMs.


Alvarez, 58, is a Harvard Law School graduate who took over as Popular’s CEO earlier this year. Previously, the post was held by Carrion, whose family has helped run the firm for generations. Alvarez said that stores have closed and workers have been laid off as a result of the storm, which is a worry for the bank.


“More than property damage to our collateral, which is not going to be that great, is the economic disruption caused by the hurricane,” he said.


The lack of power was a nightmare for dialysis and cancer patients, as well as the elderly trapped in condominiums without air conditioning. The blackout also means that this corner of credit-card dependent America is relearning how to function almost entirely in cash. When some generator-powered ATMs finally opened, lines stretched hours long, with people camping out in beach chairs and holding umbrellas against the sun.


Popular could face a downgrade by Fitch Ratings on concerns that the storm’s after-effects may harm business. Its stock has dropped 11 percent since the storm in New York trading, and is down 19 percent for the year.

Banoc Pop

Meanwhile, the even larger threat to the Puerto Rican economy is that residents will simply decide they've had enough of the island life, and the constant threat of devastating hurricanes that comes along with it, and jump ship to the mainland.  As Bloomberg notes, the island already loses roughly 2% of its population a year to the continental United States but, with many people being evacuated in the days following September 20th, it's very likely that 2017 will see a much larger exodus.

A major concern, both men agreed, was the prospect of a mass exodus to the U.S. mainland. Governor Ricardo Rossello has warned that, if the aid package being debated in Washington falls short, “millions” could leave the island. The population has already been shrinking 2 percent annually for three years running on the island of 3.4 million, due in large part to a decade-long economic lull.


“There is a danger” of flight, Carrion said. “I don’t need a visa. I don’t need anything to go there. I have relatives in Orlando, or I have relatives in Houston, or I have relatives in New Jersey.”


“Everybody has relatives in the states,” said Alvarez, cutting him off.


“Yeah, everybody,” Carrion said. “There’s more Puerto Ricans in the continental U.S. than here. So everybody’s got a relative.”

...all of which has Democrats laying out the welcome mats in the key swing state of Florida...never let a good crisis go to waste.


nope-1004 NotApplicable Mon, 10/09/2017 - 14:31 Permalink

This represents the sheer stupidity of the situation:  Drop cash and then manipulate "markets" to make it seem like there is no inflation.All the while the hole the Fed is digging gets deeper.Stupid as all hell.In addition, I see people standing in line at a bank and with the islands' power outages, they must be bringing in their USB sticks to transfer out of bigcoin..... 

In reply to by NotApplicable

Omen IV loves the truth Mon, 10/09/2017 - 18:31 Permalink

Make PR Great Again !- MPRGADreamers get to stay and go to PR for 50 years as a debt slaves to pay for ??? - each ten years they get 1/5th of their Permanent Green Card but NO voting rightsNO welfare / education / section -8 housing / government jobs / food stamps ----- allowed! get in on the ground floor and show them PR's your better than them - Homestead PR! MPRHA !

In reply to by loves the truth

John Kerry-Heinz nope-1004 Mon, 10/09/2017 - 14:33 Permalink

Ok, let me git dis straight.  PR is one the most corrupt corners of the greater US, and we send in a massive "plane load" of cash while lawlessness is on a one month drinking\drug\whore binge? What could possibly go wrong?  Why not just send the entire Clinton foundation as the security detail on the same plane .....................That graveyard scene from Betelgeuse keeps flashing through me mind.https://www.youtube.com/watch?v=z0XoLM3Jnd0 

In reply to by nope-1004

Dwain Dibley peddling-fiction Tue, 10/10/2017 - 00:38 Permalink

And it's my duty to inform you that you're a blithering idiot and you do not know what the fuck you're attempting to talk about.The Fed does not 'loan' to the U,S,G,  All profits made by the Fed, to include interest payments, are remitted to the Treasury, minus expenses and dividend payments.The Fed must pay for the production of legal tender notes and post collateral of equal value to the notes received from the Treasury.The intent and goal of EO 11110 was to remove U.S. notes from circulation.The article you linked was written by an idiot.  The Fed does not print our money.  Neither the Fed or the banks possess the legal authority to create money.MONEY . 

In reply to by peddling-fiction

doctor10 WillyGroper Mon, 10/09/2017 - 15:24 Permalink

nothing...absolutely NOTHING wrong with the economy of the USA that issuing $500, $1000, $5000, $10,000 and $100,000 dollar Federal Notes wouldn't cure in about 36 months. the damn bankers can let 330,000,000 off the hook for the rest of the 7.5 bilion...except they'd prefer to cut off their nose to spite their face-as they have for most of human history

In reply to by WillyGroper

silverer Mon, 10/09/2017 - 14:21 Permalink

Didn't cost my silver or gold a thing. After all, it's just paper they sent down. Soon, when people realize it's value is less than toilet paper, because it clogs toilets, it's basically over for the US as a holder of the world's reserve currency.

BritBob Mon, 10/09/2017 - 14:22 Permalink

 Look out for the UN!The UN C24 with such members as Iran, Syria, China, Cuba and Russia want to muscle their way into US Puerto Rico affairs:The United Nations committee on independence for colonies yesterday passed its annual resolution asserting Puerto Rico’s right to self-determination and independence. The U.N. has identified three options for a territory’s self-determination: In addition to independence, what would be statehood in the United States and nationhood in an association with another nation that either nation could end. Popularly known as the decolonization committee, the panel created in 1961 has never had jurisdiction concerning Puerto Rico’s political status. Despite this, it has passed resolutions on the subject since 1972. It has not, however, been able to get its resolutions further approved in the U.N. The U.S. Government has blocked its efforts. A little bit of information on the said committee -Falklands – UN C24 Committee (2 pages): https://www.academia.edu/11274445/Falklands_-_UN_C24_Committee 

wmbz Mon, 10/09/2017 - 14:23 Permalink

 "jet loaded with an undisclosed amount of cash" "Undisclosed" That's really funny!Every f---ing thing the un-fed does is undisclosed. If they do "disclose" it...  it is a f---ing lie! 

John Kerry-Heinz Winston Churchill Mon, 10/09/2017 - 14:51 Permalink

  Go git em.  I had a conversation last week with an old friend and a Vietnam vet.  He had applied for VA benefits a year and half ago and POOF, presto, fukn change O, last month like magic he and his wife's joint checking account now has monthly $3600 deposits (tax free) for the remainder of their lives, plus full health coverage.  We are witnessing complete & utter insanity at all levels of the financial, governmental, and judiciary levels.  It's like the evil twin of Trickle Down Economics.    
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In reply to by Winston Churchill