Puerto Rico urges action amid bond rating drop

[TexasTowelie]

Source: AP

SAN JUAN, Puerto Rico (AP) — Puerto Rico's government on Thursday urged legislators to move quickly and approve financial austerity measures following a report from a Wall Street ratings agency that downgraded the island's general obligation bonds to near-junk status.

Standard & Poor's noted that the U.S. territory's budget gap is significantly larger than originally estimated, and that current shortfalls will prevent the island from rebounding economically in the next two years.

The agency warned that if only limited progress is made in reducing the gap, it would further lower the rating.

S&P also downgraded the rating of the Government Development Bank of Puerto Rico on Thursday, saying it's not sufficiently independent from the state.

Read more: http://www.google.com/hostednews/ap/article/ALeqM5gxy4SL2MIlzes1MaL2fEadFZxuQA?docId=4b37659e1a644301842a848aabae69e2

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The budget deficit is $2.1 billion instead of $360 million previously stated. The public pension program also has $37.3 billion in unfunded liability in its public pension system.

[leftyohiolib]

1. austerity worked so well for everyone else so why not

[asjr]

2. I realize I am becoming cynical just about everything, but this

business of "rating agencies" that downgrade stuff seems unethical. Are they pushing austerity measures?

[geek tragedy]

3. Their job is to indicate how likely a borrower is to repay its debts.

They've done a really crappy job of it in many instances.

[leftyohiolib]

4. and when confronted about the triple a ratings on the cdo-s we were told - hey it's just our

opinion you cant sue us for our opinion but yet people still regard them as relevant

[geek tragedy]

5. Yep. Note that spreads on T-bills went down after they downgraded

the US.

[leftyohiolib]

6. and who buys those

[geek tragedy]

7. Everyone. nt