Puerto Rico Declares a Form of Bankruptcy

Looks like the U.S. Territory of Puerto Rico has filed a petition in Federal Court for Bankruptcy !

They apparently are defaulting on $123 Billion of debts.

Many people are going to get zonked if a "bailout" doesn't happen.

To big to fail.

So who gets cracked the hardest and who benefits the most here ?

Puerto Rico Declares a Form of Bankruptcy

With its creditors at its heels and its coffers depleted, Puerto Rico sought what is essentially bankruptcy relief in federal court on Wednesday, the first time in history that an American state or territory had taken the extraordinary measure.

The action sent Puerto Rico, whose approximately $123 billion in debt and pension obligations far exceeds the $18 billion bankruptcy filed by Detroit in 2013, to uncharted ground.

While the court proceedings could eventually make the island solvent for the first time in decades, the more immediate repercussions will likely be grim: Government workers will forgo pension money, public health and infrastructure projects will go wanting, and the “brain drain” the island has been suffering as professionals move to the mainland could intensify.

Perhaps some consideration is in order for the political powers in P.R.

The action sent Puerto Rico, whose approximately $123 billion in debt and pension obligations far exceeds the $18 billion bankruptcy filed by Detroit in 2013, to uncharted ground.

It was $73 billion and they tacked on another $50 billion ?

Gotta love fuzzy math.

Probably the reason they went bankrupt.

It's always been 72 billions...don't know where the extra 50 came from. That's why puertoricans want a complete audit of the debt to see what exactly is owed, who took the loans and if it was legal to take or...give those loans.

The newly elected governor, son of a former governor, does not want to order an audit of the debt, many say because after decades of corruption even daddy is going to jail.

Puertorricans aren't going to move a finger to pay the debt until it is audited and everything is clear as day. Whatever has to be paid will be paid, whoever stole will be going to jail. That or I dunno...

Things are bad there, after living my whole life in my beloved island I had to move to the USA 5 months ago cause there's simply not enough work, pay and too much taxes.

Something's gonna happen down there.

a reply to: Dembow
Why elect this guy then?

a reply to: Dembow

Being from PR, where did all the money go ?

How did it just disappear ?

originally posted by: xuenchen
To big to fail.

Not at all. The hole is way too deep to fill. There's simply no alternative to a lot of people losing a #-ton of money.

a reply to: xuenchen

That's what we want to know too...

a reply to: xuenchen

All the world is one big Ponzi.

Since Puerto Rico is a U.S. territory, I wonder how this is going to effect the U.S. economy in general.

From the Article:

Bankruptcy lawyers and public finance experts are watching Puerto Rico’s case closely, to see if it shows a path that financially distressed states like Illinois might also one day take. States, like United States territories, currently cannot declare bankruptcy.

Currently. But Detroit went bankrupt. It's only a matter of time before states go the same way.

The thing now would be to find out who all of Puerto Rico's creditors are, to see who is going to be eating up that debt. Because it's going to get passed on to the average person, one day or another.

a reply to: Dembow

uertorricans aren't going to move a finger to pay the debt until it is audited and everything is clear as day. Whatever has to be paid will be paid, whoever stole will be going to jail. That or I dunno...

Hopefully the courts order an audit.

Surely they would have to just to clarify who is owed what.

a reply to: Dembow

Link

Although the move on Wednesday was hardly a surprise, it left a sense of gloom and anxiety here, as civil servants question whether their pensions will ever be paid and private companies suffer the consequences of the brutal domino effect that results when taxes rise, salaries drop and the middle class takes off on a mass exodus for Florida.

“I’m going to stay here, even if I make only $1,” Mr. Rivera said.

The government plans sweeping austerity measures in the coming months that will hit teachers especially hard. On Friday, Puerto Rico’s education secretary announced a proposal to close 184 schools. Teachers may see their hours trimmed by two days a month.

So while the government seeks protection from lawsuits from the hedge funds and other financial firms that invested in Puerto Rico’s risky debt, residents of this United States territory are taking the squeeze. Fines for parking and other traffic violations have doubled. Dozens of government agencies are on the chopping block, while perks like the annual Christmas bonus and pay for unused sick time make for wistful memories.

On an island where household electric bills often reach hundreds of dollars, residents are worried that their future has been placed in the hands of strangers — an oversight board and a federal judge — who may or may not feel much empathy for American citizens whose per capita income is about $15,000 but who pay $6.25 for a gallon of milk and have an 11.5 percent sales tax.

a reply to: OccamsRazor04

Pretty face and the promise of fast entry into the Union. Son of the governor during the Clinton admin, so people equate the good economic times with their last name. More than half of his fathers cabinet went to jail for corruption though...short memories