Puerto Rico’s Creditors


Greed has grown long teeth! Its 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.

If the borrower is not qualified, and by every matrix, Puerto Rico was not qualified for even high risk, high interest loans, competent loan and safety officers should have refused the loans. IBut if accepted, the lenders must accept the risk!

Greed occurs when the lender turns to a third party within the political economy. In this case, using legislation to connect Congress as a third party (although Congress had no original interest!) in order to bail out the bad loans.

Commonly, when governments reset deficits (Iceland, Greece, Spain, Brazil, even New York City), lenders are compelled under terms to wait until new bonds are issued in exchange as a part of the refinancing; an accepted legal practice under New York law which governs most of the world’s financial transactions and lending.

I can’t go to Congress to have debts paid owed to me! Why should hedge funds not have the same restrictions?

Inside the Billion-Dollar Battle for Puerto Rico’s Future – The New York Times http://nyti.ms/1Oli5V5

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