Is There A Revolution Brewing In Puerto Rico?
"A tropical paradise is racked with bankruptcy then smashed by a killer hurricane. In rides a cavalry of digital evangelists selling hi-tech revolution. Will they save the day?"
US Expats and Retained Earnings in Foreign Corporations for 2018
"The ONLY exception and the only place on the planet where Trump’s tax plan can’t reach is the US territory of Puerto Rico."
Making a Crypto Utopia in Puerto Rico
"Dozens of entrepreneurs, made newly wealthy by blockchain and cryptocurrencies, are heading en masse to Puerto Rico this winter. They are selling their homes and cars in California and establishing residency on the Caribbean island in hopes of avoiding what they see as onerous state and federal taxes on their growing fortunes, some of which now reach into the billions of dollars. They want to build a crypto utopia, a new city where the money is virtual and the contracts are all public, to show the rest of the world what a crypto future could look like. Blockchain, a digital ledger that forms the basis of virtual currencies, has the potential to reinvent society — and the Puertopians want to prove it."
Google Provides Hurricane-Battered Puerto Rico Phone Service By Balloon
"The U.S. Federal Communications Commission said it had approved the application of Alphabet Inc—the company that runs Google—to provide the service in emergency circumstances."
“We Can’t Wait for Government”: Pop Star Daddy Yankee Saves Puerto Rico
"Puerto Rican native and pop star Daddy Yankee delivered what FEMA, and the government of Puerto Rico could not. He gave $100,000 in assistance to feed the people whose homes were destroyed, who were left without power or water after the hurricane struck over a week ago."
U.S. bailout places ‘Puerto Rico’s democracy at risk’
"The U.S. Senate is considering a bill called the Puerto Rico Assistance Act of 2015. It offers minor assistance: a temporary reduction in payroll taxes and a 'development fund' of $3 billion. But the real purpose of this bill is the installation of a six-member Financial Control Authority. That authority, if it gets the chance, will rule over Puerto Rico. Completely. What this legislation contemplates is beyond extraordinary; it is essentially the destruction of whatever semblance of genuine democracy currently rules the island. According to the bill, five members will be appointed by the U.S. President. The sixth will be the Secretary of the U.S. Treasury, who will also serve as Chairman." Continue reading →
Puerto Rico Defaults On Bonds: Return Does Not Come Without Risk
"Many American investors bought Puerto Rican bonds over the past five years as we all searched desperately for yield in the face of the Federal Reserve pushing interest rates down to historic lows. Normally, investors understand that higher yields come with greater risks. However, during the past six years of extraordinary interventions by the Fed into all sorts of financial markets, many investors may have decided that those higher yield investments weren’t really all that risky. Puerto Rico’s problems may serve as a much-needed wake up call to investors. As rates rise, capital will move back toward safety and the risk premium demanded of higher risk projects is likely to increase." Continue reading →
Should Puerto Rico Shut Down Schools to Pay Its Debts?
"The hedge fund report, authored by a trio of former International Monetary Fund economists, noted that Puerto Rico’s education spending had risen 39 percent in a decade during which school enrollment actually fell by a quarter. Surely, there must have been some unnecessary fat in the system to cut. It's easy to understand why this might seem outrageous. Firing teachers in the middle of what's essentially a nine-year depression seems like a good way to further exacerbate Puerto Rican unemployment, possibly while sacrificing some childrens' educations." Continue reading →
Puerto Rico’s Crisis Deals a Blow to Municipal-Bond Funds
"In a low-interest rate world, Puerto Rico’s bonds have offered investors juicy yields over the past several years. Puerto Rico’s $3.5 billion in general-obligation bonds issued in 2014 initially had a yield of 8.7%. The yield on 10-year U.S. Treasury notes, by contrast, hovered between 2% and 3% last year. But now investors are getting a fast lesson on the risk that comes with those sorts of high yields. More than half of all U.S. municipal-bond funds, or 298 of 565, have invested in Puerto Rico’s debt, according to the most recent fund holdings compiled by Morningstar." Continue reading →