Puerto Rico makes historic default

[Night Watchman]

Source: CNN

by Heather Long
July 1, 2016: 3:05 PM ET

Puerto Rico just did something that hasn't happened since 1933.

The deeply indebted island defaulted Friday on debt that is supposed to be guaranteed by the Puerto Rican constitution. In other words, Puerto Rico was supposed to pay creditors who hold general obligation bonds before paying anyone else, even police.

But Governor Alejandro García Padilla said: No. He argued that paying teachers, emergency personnel and other critical needs must come first. "This administration continues to take historic steps to ensure the residents of Puerto Rico continue to receive essential services while the commonwealth continues to face a delicate financial situation," a spokesman said Thursday.

The island isn't planning to make any of the $800 million payment to its bondholders due on July 1. Puerto Rico's government says it is in a "dire" financial position with only about $350 million in cash on hand right now.

Puerto Rico's default Friday marks the first time that a state or state-like entity (Puerto Rico is a U.S. territory) has failed to pay general obligation bonds since the Great Depression.



Read more: http://money.cnn.com/2016/07/01/investing/puerto-rico-defaults-general-obligation-bonds/index.html

[forest444]

1. We need clear rules of the road for debt restructuring, just as the UN recommended last year.

And money laundry vultures like Paul Singer can go to hell (they will anyway).

http://www.democraticunderground.com/10027587144

[seabeckind]

2. Puerto Rico is to the USA

as Greece is to the EU.

Lessons to be learned.

I wonder how many cities in the USA are in a similar situation?

Over borrow by creative accounting, then refi and roll the new fee into the bill.

It's almost like payday lending on a national scale. Pretty soon the bank owns the state.

We could threaten them but they hold the pink slip on our military hardware.

[angrychair]

5. You have no idea what your talking about

I strongly suggest you watch the John Oliver segment on the Porto Rico Debt Crisis. This issue is not because of out of control spending and wastefulness. The people of Porto Rico are victims of predatory lending, the 1% and political incompetence.

[passiveporcupine]

6. Thank you

[seabeckind]

7. That's what I said.

Lending from bankers.

Try to control your vehemence.

Your BS belief that Greece's problems were caused by their excess is BS.

Buh bye.

[TeamPooka]

8. It's almost like we should tax the rich like we used to do.

[penndragon69]

3. Welcome to the wonderful

world of the IMF and the World Bank.

Bend over Puerto Rico the multinationals
are coming for everything you own.

[SoLeftIAmRight]

4. yep - steady as we go...

...