Saturday, February 1, 2014

CHATARRA !!!!

REUTERS
Puerto Rico bonds pulled from S&P National AMT-Free muni index
Fri, Jan 31 11:58 AM EST

NEW YORK, Jan 31 (Reuters) - Puerto Rico bonds facing possible junk ratings are no longer part of the S&P National AMT-Free Municipal Bond Index because of the debt's outsized yields and spotty liquidity, S&P Dow Jones Indices said on Friday.

The policy shift, announced Jan. 8 and effective on Friday, raises worries that demand for Puerto Rico debt from investors tracking the index will soften when the Caribbean island is readying a bond sale or other possible financing.

Meant to track general obligation and other investment-grade, tax-exempt U.S. municipal bonds, the S&P index excludes healthcare, multifamily housing and other generally riskier sectors.

"Puerto Rico municipal bonds are now trading at levels more appropriate for high yield taxable corporate bonds," S&P Dow Jones said. "Puerto Rico municipal bonds also are experiencing varying degrees of liquidity ... (and) no longer meet the objective established by this investable investment grade index."

With a shrinking economy, Puerto Rico has outstanding bond debt of about $70 billion with tax-free yields sometimes over 10 percent. All three U.S. credit-rating agencies rate it as barely investment grade and are considering rating downgrades to junk.

A downgrade could spur selling of Puerto Rico bonds by investors limited to investment-grade securities and raise the island's borrowing costs.

S&P Dow Jones said Puerto Rico bonds would stay in other indices such as the S&P Municipal Bond Index and the S&P Taxable Municipal Bond Index.

Puerto Rico debt has rallied some in recent weeks after a steep selloff that began in September, with the S&P Municipal Bond Puerto Rico Index so far this year posting returns of 2.3 percent. For all of 2013, negative returns were 20.46 percent.

Friday, January 31, 2014

PUERTO RICO'S OFFSHORE TAX EVASION GIMMICK DOES NOT WORK TO FIX THE ECONOMY OF PUERTO RICO!!!!

UBS analysts predict debt degradation in 30 days
BLOOMBERG 

Puerto Rico Will Be Cut to Junk Within 30 Days, UBS Says

By Michelle Kaske - Jan 30, 2014
Puerto Rico’s general-obligation bonds are poised to be cut to junk within the next month, according to UBS AG.
“Given the myriad obstacles facing Puerto Rico, we believe that at least one rating agency will take such an action within the next 30 days,” analysts Thomas McLoughlin and Kristin Stephens at UBS Wealth Management in New York wrote in a report dated yesterday.
Puerto Rico, rated one step above speculative grade with a negative outlook by Moody’s Investors Service, Standard & Poor’s and Fitch Ratings, has been struggling to expand its economy since 2006. Moody’s warned Dec. 11 that it may downgrade the island within 90 days if it’s unable to access capital markets. S&P and Fitch have issued similar warnings.
The probability of the three biggest ratings companies lowering the commonwealth to junk by the end of the fiscal year, or June 30, “is very high,” the analysts wrote.
About 70 percent of U.S. municipal mutual funds hold Puerto Rico securities, which are tax-exempt nationwide, according to Morningstar Inc.
A downgrade to junk may limit demand for Puerto Rico debt because some money managers can’t buy securities rated below investment grade. The commonwealth and its government agencies have $70 billion of debt, according to the Government Development Bank, which works on Puerto Rico’s debt transactions.

Debt Sale

Puerto Rico officials declined to comment on the UBS report, said Alix Anfang, a spokeswoman in New York for the GDB. Commonwealth officials met with the major credit-rating firms this week to discuss the island’s finances, she said.
The commonwealth plans to sell long-term debt in February to balance budgets after soaring interest rates last year halted issuance of as much as $1.2 billion of sales-tax bonds.
An index that tracks Puerto Rico’s economic activity has contracted in six of the last seven fiscal years, according to the Government Development Bank. The island’s 15.4 percent December jobless rate is higher than in any U.S. state.
Investors have been valuing Puerto Rico bonds at junk levels since July, on concern that the commonwealth will be unable to repay its obligations on time and in full.
Puerto Rico general obligations maturing July 2041 traded today with an average yield of 8.51 percent, 4.68 percentage points more than benchmark munis with similar maturity, data compiled by Bloomberg show.
High-yield, high-risk bonds are rated below Baa3 by Moody’s and lower than BBB- at S&P.

The Obama Administration's Backdoor Bailout Of Puerto Rico

FORBES
by Marty Sullivan
1/28/2014
Puerto Rico’s economy and its government finances are in dire straits. The territory has had eight consecutive years of negative economic growth. Its official unemployment rate is nearly 15 percent. All three credit rating agencies have put its bonds just one notch above junk. Over the last decade, while the total U.S. population grew by 8 percent, the population of Puerto Rico declined by 2 percent. Puerto Ricans are U.S. citizens, and many of them looking for jobs have settled in the central Florida area.
The Obama administration is committed to helping Puerto Rico’s economy get back on its feet — within limits. On October 30, 2009, President Obama signed Executive Order 13517, which expanded the responsibilities of the President’s Task Force on Puerto Rico’s Status to seeking recommendations on economic development. On March 11, 2011, the task force issued a 122-page report with recommendations consisting mostly of streamlining access to existing federal programs, the formation of intragovernmental working groups, and a wish list of legislation that Congress is unlikely to pass. On June 14, 2011, Obama became the first U.S. president to visit Puerto Rico in over 50 years. And in light of Puerto Rico’s continued problems and new concerns about defaults on its bonds, on November 21, 2013, David Agnew, co-chair of the task force, announced that a team of experts from the administration would begin working with Puerto Rican government officials to marshal existing federal resources and help Puerto Rico build its capacity for addressing economic issues.


“I don’t want to convey that that translates into a direct ask for federal direct assistance, because that is not contemplated at this time,” said Mary Miller, Treasury undersecretary for domestic finance, in early November.“These efforts are not a federal intervention,” wrote Agnew when he announced the new team. And just last week a White House spokesperson said: “There is no deep federal assistance being contemplated at this time.”
But here’s a little secret that the powers that be inside and outside government don’t want you to know: The Obama administration has already provided a multibillion-dollar bailout to Puerto Rico. Nobody in the major media outlets has noticed because the issue is highly technical. But let me try to give you a plain English explanation.
In 2010, as part of his conservative agenda to expand Puerto Rico’s economy, Gov. Luis Fortuño wanted to enact large corporate and individual tax cuts. But like for all wannabe tax cutters, it was extremely difficult for him to identify ways to pay for those tax cuts, especially since Puerto Rico’s finances were in terrible shape. The governor appointed a tax reform commission and hired the Washington law firm of Steptoe & Johnson to advise it. Steptoe devised a plan whereby the Puerto Rican government would impose an excise tax on U.S. companies that operated manufacturing facilities in Puerto Rico. The excise tax was first revealed to the public on October 22, 2010. The legislature approved it the following day, and it was signed into law on October 25. The tax was estimated to raise approximately $6 billion over five years.
According to Steptoe & Johnson and the Puerto Rican government, the burden on U.S. companies would be minimal because the new tax paid by U.S. multinationals to Puerto Rico would reduce U.S. taxes by the same amount. For income tax purposes, Puerto Rico is considered a foreign jurisdiction, and foreign taxes can be creditable against U.S. tax. So in effect, the new tax would be paid by the U.S. treasury, not U.S. companies.
The scheme had one serious weakness. There is good reason to question the constitutionality of the tax. That’s because the commerce clause of the U.S. Constitution prohibits a government from taxing businesses operating outside its jurisdiction. Under the new scheme, Puerto Rico was imposing tax on the non-Puerto Rican affiliates of Puerto Rican manufacturers owned by U.S. multinationals. (The U.S.-owned Puerto Rican manufacturers themselves were protected from Puerto Rican tax by agreements signed with the Puerto Rican government.) The taxed affiliates have no physical presence in Puerto Rico. In legal circles and in the courts, there is much debate about whether this type of tax passes constitutional muster. If the tax is not constitutional, it is not creditable against U.S. tax.
Shortly after enactment of the new excise tax, the Puerto Rican government asked Treasury to rule on the creditability of the tax. On March 30, 2010, Notice 2011-29 was issued. In the notice, Treasury provided no legal opinion. The notice stated that the tax was “novel” and that Treasury would have to study it. But it the meantime, U.S. multinationals manufacturing in Puerto Rico could credit the tax until further notice.
Now, three years and billions of dollars later, there has been no further notice. Nor is there any prospect of any. Without committing itself to a legal position, Treasury has provided certainty that has enabled Puerto Rico to raise taxes in the most politically painless way imaginable. That being the case, in February 2013 the government enacted new legislation that extended the tax to 2017 — it was originally scheduled to expire in 2016 — and raised its rate. The revised tax is estimated to raise nearly $2 billion per year, more than 20 percent of Puerto Rico’s general revenue.
A lot of powerful interests like the current situation. They include the government and both major political parties in Puerto Rico, the Obama administration, investors in Puerto Rico’s municipal bonds, and U.S. multinationals that can credit the tax. The only ones on the short end of the stick are U.S. taxpayers, who are footing the bill that they would probably be unwilling to pay if they were ever asked.
__________________________________________________

The Obama Administration's Backdoor Bailout Of Puerto Rico

Monday, January 27, 2014

“The Treasury Bailout of Puerto Rico”

Hoy (27 de enero de 2013) , Martin Sullivan, el experto en economía mas respetado de los EEUU, publica “The Treasury Bailout of Puerto Rico” en Tax Notes , la publicación periodística de impuestos más respetada en Washington, DC y el resto de la nación.

Según Martin Sullivan , el “Excise Tax” del 4% a las empresas manufactureras impuestas por la Administración Fortuño en 2010 y extendida por el gobierno de García Padilla en el año 2013 es una cantidad injustificada de $6 billones de dólares en beneficios contributivos del Tesoro de los EE.UU. a las empresas “foráneas”.

Sullivan concluye que el Impuesto de 4 % lo más probable es inconstitucional y no debe ser permitido como un crédito fiscal extranjero en la declaración de impuestos federales de las empresas en los EE.UU.

El análisis de Martin es apoyado por cinco asesores fiscales independientes. Si Sullivan esta en lo correcto y el impuesto al consumo del 4% no está a disposición del Gobierno de Puerto Rico, Puerto Rico se va a enfrentar a una situación económica muy complicada

Martin Sullivan estuvo en el Joint Committee of Taxation, es un respetado experto en asuntos económico y se le reconoce como el experto en impuestos , que "descubrió cómo las compañías más grandes del mundo evitaron miles de millones en impuestos " (Fuente: Washington Post, primera página , 26 de octubre 2013

COMENTARIO :
Durante el día de hoy y mañana el gobierno de Garcia Padilla celebra reuniones con las casas acreditadoras en New York. El equipo de AGP tiene un mensaje principal, a saber, los recaudos a las foráneas en los pasados 6 meses han permitido exceder los recaudos del gobierno del 2012. El IVU está por debajo de las proyecciones porque la gente se está yendo de PR y el consumo no ha crecido como esperaban.

PERO …. El único mensaje que podría interesar a las casas acreditadoras esta en peligro por el análisis de Marty Sullivan que se publica hoy, pues no se puede cobrar un impuesto que es anticonstitucional, y el IRS no debe permitir que lo usen como crédito en la planilla federal.

Esos 6 billones de dólares benefician directamente a las empresas foráneas, pero no a Puerto Rico. Este esquema de “evasión de impuestos” y protegido por todos los gobiernos de Puerto Rico ha llevado a la isla al descalabro económico actual y ha empobrecido a los puertorriqueños.

Si reclamamos esos 6 billones de dólares y este dinero entra a la isla, se resuelve el déficit y la paupérrima situación que se vive en Puerto Rico. Saldríamos de los bonos de “chatarra” , se resolvería el problema de los maestros, de los retirados, etc. Y no solo se acabaría el déficit, la deuda, etc, sino los otros gastos onerosos que el Gobierno quiere que paguemos los puertorriqueños con más impuestos, IVU, etc.

Tenemos que emplazar y exigir al gobierno y a todos los lideres en Puerto Rico que le metan mano a ese dinero que resolvería la situación económica actual de Puerto Rico y traería bienestar a nuestro pueblo, quienes son los que sufren las consecuencias del descalabro económico.

Si no lo hacen, debemos cuestionarnos seriamente las razones que tienen para no hacerlo. Entonces es porque tienen los dedos amarrados a ese imperio económico que se ha convertido en dueño y señor de nuestra isla, de las vidas de los puertorriqueños, y está destruyendo todos nuestros sueños y aspiraciones. Por eso, si no lo hacen… tenemos que utilizar todos los métodos posibles, el Congreso, el Gobierno de Obama, etc, para que nos ayuden.

Miriam Ramirez MD


ARTICULO DE MARTIN SULLIVAN:

Sunday, January 26, 2014

CORPORATE GREED


"The powers of financial capitalism has another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole". Karen Hude
      

Hudes exposes the corrupt financial system that the global elite use to control the wealth of the world.




PUERTO RICO IS ALSO A VICTIM OF A GLOBAL CORRUPT FINANCIAL SYSTEM AS DESCRIBED BY K. HUDES - mj





Karen Hudes Reveals How The Global Elite Rule The World
By Greg Hunter’s USAWatchdog.com 
2013

Karen Hudes is a graduate of Yale Law School and she worked in the legal department of the World Bank for more than 20 years.  In fact, when she was fired for blowing the whistle on corruption inside the World Bank, she held the position of Senior Counsel.  She was in a unique position to see exactly how the global elite rule the world, and the information that she is now revealing to the public is absolutely stunning.  According to Hudes, the elite use a very tight core of financial institutions and mega-corporations to dominate the planet.  The goal is control.  They want all of us enslaved to debt, they want all of our governments enslaved to debt, and they want all of our politicians addicted to the huge financial contributions that they funnel into their campaigns.  Since the elite also own all of the big media companies, the mainstream media never lets us in on the secret that there is something fundamentally wrong with the way that our system works.
Remember, this is not some "conspiracy theorist" that is saying these things.  This is a Yale-educated attorney that worked inside the World Bank for more than two decades.  The following summary of her credentials comes directly from her website...

Karen Hudes studied law at Yale Law School and economics at the University of Amsterdam. She worked in the US Export Import Bank of the US from 1980-1985 and in the Legal Department of the World Bank from 1986-2007. She established the Non Governmental Organization Committee of the International Law Section of the American Bar Association and the Committee on Multilateralism and the Accountability of International Organizations of the American Branch of the International Law Association.
Today, Hudes is trying very hard to expose the corrupt financial system that the global elite are using to control the wealth of the world.  During an interview with the New American, she discussed how we are willingly allowing this group of elitists to totally dominate the resources of the planet...

A former insider at the World Bank, ex-Senior Counsel Karen Hudes, says the global financial system is dominated by a small group of corrupt, power-hungry figures centered around the privately owned U.S. Federal Reserve. The network has seized control of the media to cover up its crimes, too, she explained. In an interview with The New American, Hudes said that when she tried to blow the whistle on multiple problems at the World Bank, she was fired for her efforts. Now, along with a network of fellow whistleblowers, Hudes is determined to expose and end the corruption. And she is confident of success.Citing an explosive 2011 Swiss studypublished in the PLOS ONE journal on the “network of global corporate control,” Hudes pointed out that a small group of entities — mostly financial institutions and especially central banks — exert a massive amount of influence over the international economy from behind the scenes. “What is really going on is that the world’s resources are being dominated by this group,” she explained, adding that the “corrupt power grabbers” have managed to dominate the media as well. “They’re being allowed to do it.”
Previously, I have written about the Swiss study that Hudes mentioned.  It was conducted by a team of researchers at the Swiss Federal Institute of Technology in Zurich, Switzerland.  They studied the relationships between 37 million companies and investors worldwide, and what they discovered is that there is a "super-entity" of just 147 very tightly knit mega-corporations that controls 40 percent of the entire global economy...

When the team further untangled the web of ownership, it found much of it tracked back to a "super-entity" of 147 even more tightly knit companies - all of their ownership was held by other members of the super-entity - that controlled 40 per cent of the total wealth in the network. "In effect, less than 1 per cent of the companies were able to control 40 per cent of the entire network," says Glattfelder. Most were financial institutions. The top 20 included Barclays Bank, JPMorgan Chase & Co, and The Goldman Sachs Group.
But the global elite don't just control these mega-corporations.  According to Hudes, they also dominate the unelected, unaccountable organizations that control the finances of virtually every nation on the face of the planet.  The World Bank, the IMF and central banks such as the Federal Reserve literally control the creation and the flow of money worldwide.
At the apex of this system is the Bank for International Settlements.  It is the central bank of central banks, and posted below is a video where you can watch Hudes tell Greg Hunter of USAWatchdog.com the following...

"We don’t have to wait for anybody to fire the Fed or Bank for International Settlements . . . some states have already started to recognize silver and gold, the precious metals, as currency"
Most people have never even heard of the Bank for International Settlements, but it is an extremely important organization.  In a previous article, I described how this "central bank of the world" is literally immune to the laws of all national governments...

An immensely powerful international organization that most people have never even heard of secretly controls the money supply of the entire globe.  It is called the Bank for International Settlements, and it is the central bank of central banks.  It is located in Basel, Switzerland, but it also has branches in Hong Kong and Mexico City.  It is essentially an unelected, unaccountable central bank of the world that has complete immunity from taxation and from national laws.  Even Wikipedia admits that "it is not accountable to any single national government."  The Bank for International Settlements was used to launder money for the Nazis during World War II, but these days the main purpose of the BIS is to guide and direct the centrally-planned global financial system.  Today, 58 global central banks belong to the BIS, and it has far more power over how the U.S. economy (or any other economy for that matter) will perform over the course of the next year than any politician does.  Every two months, the central bankers of the world gather in Basel for another "Global Economy Meeting".  During those meetings, decisions are made which affect every man, woman and child on the planet, and yet none of us have any say in what goes on.  The Bank for International Settlements is an organization that was founded by the global elite and it operates for the benefit of the global elite, and it is intended to be one of the key cornerstones of the emerging one world economic system.
This system did not come into being by accident.  In fact, the global elite have been developing this system for a very long time.  In a previous article entitled "Who Runs The World? Solid Proof That A Core Group Of Wealthy Elitists Is Pulling The Strings", I included a quote from Georgetown University history professor Carroll Quigley from a book that he authored all the way back in 1966 in which he discussed the big plans that the elite had for the Bank for International Settlements...

[T]he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.
And that is exactly what we have today.
We have a system of "neo-feudalism" in which all of us and our national governments are enslaved to debt.  This system is governed by the central banks and by the Bank for International Settlements, and it systematically transfers the wealth of the world out of our hands and into the hands of the global elite.
But most people have no idea that any of this is happening because the global elite also control what we see, hear and think about.  Today, there are just six giant media corporations that control more than 90 percent of the news and entertainment that you watch on your television in the United States. This is the insidious system that Karen Hudes is seeking to expose.