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Puerto Rico Government Shutdown Likely
Posted: Thu Apr 23, 2015 10:15 am
by Ad Orientem
Puerto Rico's top finance officials said the government of the US territory will most likely shut down in three months because of a looming liquidity crisis, and they warned of a devastating impact on the island's economy.
In a letter to leading lawmakers, including Gov. Alejandro Padilla, the officials said a financing deal that could potentially salvage the government's finances looked unlikely to succeed. It warned of laying off government employees and reducing public services.
"A government shutdown is very probable in the next three months due to the absence of liquidity to operate," the officials said. "The likelihood of completing a market transaction to finance the government's operations and keep the government open is currently remote."
Read more:
http://www.businessinsider.com/r-puerto ... z3Y96hIifd
Read the rest here.
http://www.businessinsider.com/r-puerto ... ent-2015-4
Re: Puerto Rico Government Shutdown Likely
Posted: Thu Apr 23, 2015 12:02 pm
by Pointedstick
Those yields!
[img width=800]
https://i.imgur.com/Em0OkHH.png[/img]
Non-taxable, and non-callable. Defaultable, of course…
Re: Puerto Rico Government Shutdown Likely
Posted: Thu Apr 23, 2015 1:54 pm
by moda0306
MangoMan wrote:
Illinois is next.
Do you really think that? I think a wave of muni defaults (or rate hikes) would be really interesting.
Re: Puerto Rico Government Shutdown Likely
Posted: Thu Apr 23, 2015 3:14 pm
by moda0306
MangoMan wrote:
moda0306 wrote:
MangoMan wrote:
Illinois is next.
Do you really think that? I think a wave of muni defaults (or rate hikes) would be really interesting.
The new republican governor [Bruce Rauner] has some good ideas to fix things, but the democrats have a super-majority in both houses of the legislature, so very little is likely to get done. I hope I am wrong.
Hmmm. Let me guess... his plan includes Tax Cuts!!
Re: Puerto Rico Government Shutdown Likely
Posted: Thu Apr 23, 2015 4:03 pm
by Pointedstick
Illinois is fucked. Existing obligations cannot be cut due to the strength of the constitutional protection afforded them, and there are a ton of existing obligations. The pension debacle can only be solved by raising taxes at this point (and actually putting the money toward the pensions, but that's another issue...).
