Political Report # 1107 How Hedge Funds Are Pillaging Puerto Rico By David Dayen, The American Prospect

Clementina Murcia González, from Honduras, holds up the pictures of her two missing sons, Jorge Orlando Funes Murcia and Mauro Orlando Funes. (photo: Federico Barahona) By David Dayen, The American Prospect

Vulture investors have descended on the commonwealth, taking advantage of a debt crisis that has impoverished citizens and created massive unemployment. his is a distress call from a ship of 3.5 million American citizens that have been lost at sea," Puerto Rico Governor Alejandro García Padilla said on December 1, begging the Senate Judiciary Committee to help protect his homeland from an unspooling disaster. After issuing bonds for over a decade on everything not nailed down, Puerto Rico now carries $73 billion in debt, a sum that García Padilla had termed "not payable" in June. Successive governments have enacted punishing austerity measures to service the debt, despite a stubbornly depressed economy and poverty rates near 50 percent. Now, after defaulting on smaller loans, it's likely that much of the $957 million due January 1 will go unpaid, bringing more chaos and suffering at the hands of Puerto Rico's creditors. In many ways, the Puerto Rico situation is sui generis, resulting from a patchwork of laws and obligations on an entity that is not really a country and not really a U.S. state. But looked at another way, Puerto Rico is just the latest battlefield for a phalanx of hedge funds called "vultures," which pick at the withered sinews of troubled governments. In Greece, Argentina, Detroit, and now Puerto Rico, vultures have bought distressed debt on the cheap, and then used coercion, threats, and legal action to secure a massive windfall, compounding the effects on millions of citizens.

Political Report # 1067 Capital Over People? Puerto Rican Debt Crisis Explained By Chandler Foust, COHA

Featured Photo: Aeriel view of Old San Juan.             From: U.S. National Park Service. By Chandler Foust, Research Associate at the Council on Hemispheric Affairs

UPDATE (August 4, 2015, 2:28 p.m.): On Monday August 4, Puerto Rico's Public Finance Corporation failed to pay the $58 million USD it owed creditors, making only a $628,000 USD payment. In addition, the island owes $5 billion USD over the next twelve months. Monday marked the first day in the island's history where it failed to make a payment. The current debt crisis in Puerto Rico not only illustrates a need for a complete restructuring of the island's economy, but a closer look taken toward its further political union with the United States. In addition, the current crisis shows the flawed way that politicians respond to debt crises, and how the people who end up getting hurt are usually not the ones who started the crisis. Lastly, the current political debate between debtors and creditors, harsh austerity measures, and further concessions to capital has shown that these lessons have yet to sink in for many.

Political Report # 1053 Puerto Rico - like Greece - will default on its debts, as the U.S. has ignored the island’s financial problems for decades By Juan Gonzalez, NY Daily News

RICARDO ARDUENGO/AP                            A local walks by closed San Juan bank, where posters say, 'Let rich pay for crisis.'                            By Juan Gonzalez, NY Daily News

Obama to Puerto Rico: Drop Dead. That was the message from the White House this week to 3.5 million U.S. citizens of Puerto Rico - our own version of Greece.