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Puerto Rico files for biggest ever U.S. local government bankruptcy

reuters.com

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Re: Puerto Rico files for biggest ever U.S. local government bankruptcy

#451

Post by pure_ambition »

basseq wrote: post #446
colefichter wrote: post #438

Earlier quoted context omitted.

You make a really good point. HN seems to venerate startups that fail, which isn't very different from defaulting on a loan (and in many cases these startups are defaulting on loans as they shut down). Yet, in any thread where Greece, Puerto Rico, etc come up there's this strong backlash against defaulting as being somehow immoral (as though it's not written into the lending agreements). What exactly is the differenc…

The answer, as I see it, is big dollars and moral focus. A VC investing a couple million bucks in a long-shot startup? You expect risk. Ditto, say, a $300k mortgage to a family of four, but that's more portfolio statistics. Multi-billion dollar governments go bankrupt because of mis-management. Less "Uber For Dogs" and more "Enron", minus the intentional criminality. Governments go bankrupt because its citizen "share…

Eh, that's cheap. A citizen has far less control over their government than a corporation's managers over their treasury or an individual over their own finances. So your argument applies far less to a government than in the other cases. In any case, politicians actions do not equal the will of the people, as anyone acquainted with a Republican form of government should know.

Re: Puerto Rico files for biggest ever U.S. local government bankruptcy

#452

Post by [deleted] »

basseq wrote: post #446
colefichter wrote: post #438

Earlier quoted context omitted.

You make a really good point. HN seems to venerate startups that fail, which isn't very different from defaulting on a loan (and in many cases these startups are defaulting on loans as they shut down). Yet, in any thread where Greece, Puerto Rico, etc come up there's this strong backlash against defaulting as being somehow immoral (as though it's not written into the lending agreements). What exactly is the differenc…

The answer, as I see it, is big dollars and moral focus. A VC investing a couple million bucks in a long-shot startup? You expect risk. Ditto, say, a $300k mortgage to a family of four, but that's more portfolio statistics. Multi-billion dollar governments go bankrupt because of mis-management. Less "Uber For Dogs" and more "Enron", minus the intentional criminality. Governments go bankrupt because its citizen "share…

[deleted]

Re: Puerto Rico files for biggest ever U.S. local government bankruptcy

#453

Post by xamolxix »

jacobush wrote: post #393
xamolxix wrote: post #349

Earlier quoted context omitted.

> See eg Greece who were pressured to accept a deal worse than default to benefit foreign EU banks how are they being pressured?

If they don't agree, they will get booted from the Euro currency cooperation. Then they can't issue bonds in Euro. Would have to use their own currency - and that currency would not be in high demand. What would you use it for? Buy olives? Nah, export companies would rather be paid in Euros, dollars or just about anything else...

Well, maybe but what is the non-pressure course that the EU should take here? Isn't that what they (Greece) signed up for when they joined the euro?

Re: Puerto Rico files for biggest ever U.S. local government bankruptcy

#454

Post by cmdrfred »

thomnottom wrote: post #441
ericd wrote: post #360

Earlier quoted context omitted.

It's not the "financial guys" forcing everyone to sign up for the huge amounts of per-capita debt we're now up to. People are doing that themselves out of their utter lack of self-discipline to save money instead of buying a stupidly overpriced SUV or pickup truck. And the housing market really went off the rails because people were making stupid bets. Does the casino enable stupid bets? Damn right. But we don't blam…

When I got my mortgage (c. 2006) I had an idea of what I could afford. I went to the bank hoping they would approve me for that much. Not even taking into account my wife's salary, they approved me for at least $100k more than that. There is no way we would still have our home if we took the bank's advice. Sure, people make bad decisions. But how can they be expected to make better ones when the people that are suppo…

I blame the "sharing is caring" and "safe space" culture. If people were exposed to reality at a younger age they'd know that any advice given is for the advice givers benefit.

Re: Puerto Rico files for biggest ever U.S. local government bankruptcy

#455

Post by bluetwo »

pryelluw wrote: post #231
bluetwo wrote: post #122

Earlier quoted context omitted.

So the (selfish) question is: Is now a good or bad time to take a vacation in PR?

Same as always. If you do visit make sure to email me. Ill take you out to a nice dinner.

Sounds good!

Re: Puerto Rico files for biggest ever U.S. local government bankruptcy

#456

Post by basseq »

pure_ambition wrote: post #451
basseq wrote: post #446

Earlier quoted context omitted.

The answer, as I see it, is big dollars and moral focus. A VC investing a couple million bucks in a long-shot startup? You expect risk. Ditto, say, a $300k mortgage to a family of four, but that's more portfolio statistics. Multi-billion dollar governments go bankrupt because of mis-management. Less "Uber For Dogs" and more "Enron", minus the intentional criminality. Governments go bankrupt because its citizen "share…

Eh, that's cheap. A citizen has far less control over their government than a corporation's managers over their treasury or an individual over their own finances. So your argument applies far less to a government than in the other cases. In any case, politicians actions do not equal the will of the people, as anyone acquainted with a Republican form of government should know.

Majorly cheap, but you're also highlighting a massive bystander effect. "What hope do I, one citizen, have of changing anything?"

The other point is (arguably) that government should not be risking bankruptcy for the sake of innovation. Which in the cases of government bankruptcy, was not the reason for insolvency anyway. So then it comes back to mismanagement, where maybe the better analog is personal bankruptcy. If an individual came to you and said they were declaring bankruptcy because they had spent more than they made for the last 20 years, you probably wouldn't have much sympathy.

Re: Puerto Rico files for biggest ever U.S. local government bankruptcy

#457

Post by vkou »

ericd wrote: post #360
state_less wrote: post #265

Earlier quoted context omitted.

But everyone is definitely not lumped together into a commons. If their is information to delineate people, it will be used. That is what credit scores are used for. Also, of some interest, it was when banks sullied the information, that the housing market really went off the rails. BTW: We've got to watch out for these financial guys, they'll try it again if they have the chance.

It's not the "financial guys" forcing everyone to sign up for the huge amounts of per-capita debt we're now up to. People are doing that themselves out of their utter lack of self-discipline to save money instead of buying a stupidly overpriced SUV or pickup truck. And the housing market really went off the rails because people were making stupid bets. Does the casino enable stupid bets? Damn right. But we don't blam…

> It's not the "financial guys" forcing everyone to sign up for the huge amounts of per-capita debt we're now up to.

Except that the price of houses rise when everyone else can take out loans beyond their ability to pay. You can't opt out of this game.

Not to mention that most of the people defaulting on their mortgages had the ability to pay - until they lost their jobs. Which they lost because of other people defaulting on their mortgages. The economy was a tinderbox.

Re: Puerto Rico files for biggest ever U.S. local government bankruptcy

#459

Post by jeffbax »

zeteo wrote: post #80
ThrustVectoring wrote: post #31

Earlier quoted context omitted.

>Lots of people are leaving the island, which just compounds the problem (less revenue). This is one of the effects of Puerto Rico being subject to US minimum wages. Since it's illegal for large portions of the population to receive pay commensurate to the value they're able to produce, and it is legal to move to the US, guess what folks do?

Minimum wage only causes unemployment if the labor market is competitive. This is not currently the case in the US as a few big companies (Walmart, McDonald's) have disproportionate market power, and most economic sectors are becoming even more concentrated. Under such oligopsony conditions, increases in minimum wage will generally come out of profits (which are at historically high levels of the GDP [1]). Since wage…

"minimum wage regulations should generally help the local economy."

I would not say that with such certainty…

http://www.sciencedirect.com/science/article/pii/S0166046216...

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2951110

Re: Puerto Rico files for biggest ever U.S. local government bankruptcy

#460

Post by FullMtlAlcoholc »

mfukar wrote: post #386
FullMtlAlcoholc wrote: post #189

Earlier quoted context omitted.

Limited liability, along with joint stock ownership, was possibly the greatest financial invention of all time. In terms of big history, I would mark the inception of this form of human social organization as the beginning of "The Great Acceleration." To a great degree, this is also why the West became so dominant until recent times, allowing for the building of then state of the art ships to undergo risky trade and…

> I commend him for being able to reinvent himself by learning how to create an effective brand and sell his name. Which is quite an achievement on a personal level, but is a completely useless thing in every other aspect of society.

If some people get satisfaction out of living in a Trump building, as if that is synonymous with class, more power to them.

The name though literally means nothing. There is no consistency, quality, customer service, or otherwise, to any of the properties that bear the Trump moniker.

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