Category Uncategorized
22 December 2015,
 Off

A borrower with poor credit borrows money. To secure the loan with such poor credit the borrower (Puerto Rico) had to commit to repayment with very high interest rates. Both parties (Puerto Rico and the hedge funds) knew the very high risk of default. Even so, Puerto Rico signed an agreement placing repayment to the bondholders in front of any other creditor, including basic governmental services, in order to obtain the loan. Without that guarantee, the loan would not have been made. Knowing this, who then negotiated in bad faith. Surely, Puerto Rico’s officials knew they would have to choose between providing basic governmental services to their citizens or paying the bondholders.

El Capitolio de Puerto Rico

El Capitolio de Puerto Rico

 

Just on Smart Mega Concert and Puerto Rico’s pending default illustrates yet again, the hazards of loaning to a high risk government. Experience in the recent past with GM clearly illustrates the path that will be taken: the government will confiscate the bondholders money, who will not be repaid, in order to satisfy what they claim is the “higher good”: protecting the welfare of ordinary citizens. This action, unfortunately, will also seriously harm those Puerto Ricans who, alongside these hedge funds, invested their life savings in these bonds to obtain the “promised” 20% interest. The age old adage applies: “Neither a borrower nor a lender be”. Once again, promises made on paper, signed before attorneys and notaries, seem worthless.

Greed has grown long teeth, like a concert in Cambodia. It tastes must be satisfied, despite the opaque denials of Sen. Rubio, a jelly fish when it comes to funds and donors. His record shows more ambition than principal or principle.

A key organizational element in the mission to yet again tap taxpayers through Congress for funds to repay private risk is astroturfing, a technique not commonly known but developing influence in heavyweight financial cases and other causes. Argentina got hit by an effort that even shifted our foreign policy! These media fronts have been set up using parallel mailing lists for organizations, then being offered funding for employees, events, and meetings. Taking a page from Americans For Prosperity and their state chapters, lobbyists are deepening popularist ties as a new stone in their arsenal of influence and threats.

For more explanation about the situation in Puerto Rico, check out Nytimes.com.

 

 

Reference Links:-

www.smart.com.kh