Sunday, December 20, 2015

Inside the Billion-Dollar Battle for Puerto Rico’s Future

Personally, I think all those people/funds that were STUPID enough to fund Puerto Rico should lose their shirts.  Anyway, I can't help but wonder if this is part of the Great Undoing (I, uh, couldn't think of what else to call it).
Stephen J. Spencer, a restructuring expert representing Puerto Rico bondholders including some hedge funds, said letting the government renege on agreements with hedge funds and other investors would set a dangerous precedent, undermining the integrity of the bond market.

“It’s really a wealth transfer from the bondholders to the municipalities,” Mr. Spencer said.

Others fear a different precedent: A handful of wealthy investors, they argue, are trying to rewrite the social contract of an entire United States territory. Puerto Rican officials say they have already cut public services and slashed central government spending by a fifth to keep ahead of payments to the hedge funds and financiers.

“What they are doing, by getting all the resources for themselves, is undermining the viability of Puerto Rico as a commonwealth,” said Joseph E. Stiglitz, the Nobel Prize-winning economist. “They want their money now, and they want to get the rules set so that they can make money for the next 20 years.”
It was pretty obvious these "bondholders" should never have allowed themselves to do something like this.  I am sure they knew what would happen to the people of Puerto Rico if the territory tried to stick to the agreement.

I think Puerto Rico should EXACT PAYMENT from the rich wealthy bondholders to invest in their country so that basic services could be made whole. Then the Federal Government should step in and oust the leaders and Governor of the island and set up a management team to get PR back on a sound footing.

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