Puerto Rico just defaulted for the first time

[brooklynite]

Source: CNN

Puerto Rico just went into default for the first time in its history.

The commonwealth paid a mere $628,000 toward a $58 million debt bill due Monday to creditors of its Public Finance Corporation. This will hurt the island's residents, not Wall Street. The debt is mostly owned by ordinary Puerto Ricans through credit unions.

"This was a decision that reflects the serious concerns about the Commonwealth's liquidity in combination with the balance of obligations to our creditors and the equally important obligations to the people of Puerto Rico," Puerto Rico's Government Development Bank president Melba Acosta Febo said in a statement.

The default is a historic moment in Puerto Rico's economic "death spiral," a term the island's governor, Alejandro Garcia Padilla, has used. The island is struggling with about $70 billion in total outstanding debt, and its economy is in recession.

Read more: http://money.cnn.com/2015/08/03/investing/puerto-rico-default/index.html

[hill2016]

1. who are the main holders

of the debt?

[hobbit709]

3. Vultures. The usual suspects.

[hill2016]

4. you guessing

or know this for a fact

[former9thward]

9. Puertorican Credit Unions.

They are vultures now?

[geek tragedy]

2. " The debt is mostly owned by ordinary Puerto Ricans through credit unions. "

Well, that explains the lack of a bailout.

[dsc]

5. no the debt that they missed the payment on is owned by them

most of their debt is owned by banks and hedge funds. I have no idea when their next debt payment comes up or which debt it is, but this debt payment is unusual.

[fbc]

6. Excellent analysis by Krugman:

http://www.nytimes.com/2015/08/03/opinion/paul-krugman-americas-un-greek-tragedies-in-puerto-rico-and-appalachia.html

[AngryAmish]

17. You read thatx and does it contain a single reason not to make Puerto Rico free?

It does not. I believe in the Puerto Rican people.

[MADem]

7. Between this and the drought, PR can't catch a break.

Rodriguez said his wife's parents -- who live in Trujillo Alto, a town near San Juan -- have gone without running water this summer for two straight days.

That is not quite accurate--it's two days with no water, one day with water. If you don't have a tank on the roof, you have to fill up giant garbage containers and use buckets to transfer water for your use.

[AngryAmish]

8. All of PR's problems go away if we grant her independence

A sovereign nation with their own currency will never default as long as the debt is paid in that nation's currency.

Plus, they should go looking for oil pronto.

[former9thward]

10. They have voted on that several times.

They don't want independence.

[AngryAmish]

11. Singapore did not want independence either, they did fine.

Puerto Rico has no plan. This at least is a plan.

[fbc]

12. And all of our problems would disappear if we granted red states independence.

but it would kind of screw over the people in the states we kick out.

Read the analysis by Krugman. Puerto Rico's connection to the US is the thing keeping it afloat.

[AngryAmish]

13. Puerto Rico was war booty

It us immoral to keep her. The United States is too racist to be fair to a majority minority colony. Look at her current condition.

[DonCoquixote]

15. however, two questions need to be adressed

One, would Puerto Ricans here already lose their citizenship? This may sound silly, but considering many of us have family on the island and do not relish the thought of our relatives needing visa to visit, this needs ot be addressed.

Second, what is done about defense. Sorry, I do not want Cuba getting any ideas. It is one thing to have open trade, but there are some hardliners who would love the thought of coming tio Puerto Rico and killing anyone who does not worship Castro.

[AngryAmish]

16. 1. It is impossible to make a US citizen lose their citizenship

Black letter consititutional law. Only those people born on the island after her grant of freedom will not be US citizen.

2. A mutual defense treaty makes her safe.

But, to be fair, PR did not seem so interested in mutual defense when we shared Roosevelt Rhodes and the bombing range. 2 way street, yes?

[DonCoquixote]

19. that was because

despite long term damage done to the area, uncle sam did not care..If you knew anything about the island, you would know that.

[MFrohike]

14. That's true, as far as it goes

Small countries without a ton of exploitable resources tend to have a hard time getting anyone to lend to them in their own currency. I don't dispute that being a currency issuer is better than a currency user, just that all issuers have the same power.

[Recursion]

18. They're free to vote for it, and they don't seem to want it (nt)