News about the economy

Sitka wrote:

Do you remember the Texas Enron Co that imploded in 2001?  They had been audited by the Arther Anderson accounting company from Chicago.  After the s**t hit the fan, the Enron bankruptcy took down Anderson too!

Well they did play loose with the numbers. 

WarnerW wrote:

The entire text of PROMESA can be found here:

https://www.congress.gov/bill/114th-con … 82E5DAB85B

It seems to me that the point of disagreement turns on Section 204(1) of PROMESA.

"SEC. 204. REVIEW OF ACTIVITIES TO ENSURE COMPLIANCE WITH FISCAL PLAN.
(a) Submission Of Legislative Acts To Oversight Board.—

(1) SUBMISSION OF ACTS.—Except to the extent that the Oversight Board may provide otherwise in its bylaws, rules, and procedures, not later than 7 business days after a territorial government duly enacts any law during any fiscal year in which the Oversight Board is in operation, the Governor shall submit the law to the Oversight Board."

While Governor Rossello is right, note the opening language, "Except to the extent that the OB may provide otherwise in its bylaws, rules and procedures..."  So it seems to me that the short of it is that the Oversight Board has the authority to amend the rules and procedures concerning the submission of legislative acts.  It therefore can (but not necessarily should) require the governor to submit acts prior to his signature.

Interesting point but it is refering to a duly enacted law, not a potential / proposed law. To me it sounds like if they don't make changes to their rules then the duly enacted law is due to them within 7 days, but I am not a lawyer.
I do not think they have the power to change any part of the law without congressional action.
"bylaws, rules, and procedures" seems to me that it refers to the processes and procedures of the board and not the goverment of Puerto Rico. As I read it, they could for example not enforce a 7 day requirement but can not require it earlier, they could ask nicely to do it sooner but not require it, and certainly not require submission of pending laws, at least not under that article, but I could be wrong.

I think the board will back down, IMHO the governor is correct in his interpretation of the law.

Sitka wrote:

Do you remember the Texas Enron Co that imploded in 2001?  They had been audited by the Arther Anderson accounting company from Chicago.  After the s**t hit the fan, the Enron bankruptcy took down Anderson too!

Interesting. After reading your post I Googled the Arthur Anderson accounting company and learned about their part in the Enron scandal. Too bad they didn't honor their founder's values.

From Wikipedia:

Andersen, who headed the firm until his death in 1947, was a zealous supporter of high standards in the accounting industry. A stickler for honesty, he argued that accountants' responsibility was to investors, not their clients' management. During the early years, it is reputed that Andersen was approached by an executive from a local rail utility to sign off on accounts containing flawed accounting, or else face the loss of a major client. Andersen refused in no uncertain terms, replying that there was "not enough money in the city of Chicago" to make him do it. For many years, Andersen's motto was "Think straight, talk straight."

Here is the link if you are interested

All either on or off island should be appreciative of Rey P for taking the time and the enormous trouble of posting on this subject. On an earlier post, by reducing healthcare, I presume you mean infrastructure/local programs.  As for Medicare, I realize the reimbursement is pathetic, but it is stateside, too -- MDs not so anxious to see seniors. And for those on the island and receiving Medicare benefits, I'd watch what the Republicans do with ACA  ("Obamacare"). It will tell you if they can next get away with killing/cutting Medicare/SS benefits. My guess is that they will kill Medicare by creating a framework that requires seniors to pay much more -- more than 20% -- no guaranteed benefit. You can use your imagination to figure out what this will do.  DM

Hope you are wrong, I been paying Medicare for close to 50 years.
As to reimbursement, my understanding is that PR gets a lot less for Medicare reimbursement than any and all states, yet everyone in PR pays Medicare at the same level as the people in the states. Same with Medicaid, we get a lot less and ZERO social security supplemental.

A few more items:
Apparently the governor has made changes to the board of the electric company and is eyeing the salaries and benefits. He say the changes will not interfere with the bond holders agreement.

The governor is also not too happy with the UPR board, apparently they have not released any documents reference their budget to the governor nor to the Promesa Federal board. According to UPR they don't have to, according to the governor and the Federal board, they are obligated to comply. The board may withhold all public funds if they get pissed up, but they have not threaten yet.

The governor made clear that there will be no legal recreationalMarijuana in PR. as a mater of fact the previous governor signed an executive order that there will be no prosecution of people caught with 6 ounces or less. Looks like the new governor will be rescinding that order, but have not as of yet.

More on electric company board http://www.elnuevodia.com/english/engli … s-2291552/

Prepa board is cut and salaries eliminated.
http://www.elnuevodia.com/english/engli … s-2291159/

Thanks, Rey!

Interesting development, I mentioned in a previous post about the university of Puerto Rico (UPR) not submitting the information requested by the Promesa board and the governor. Also posted about the governor not being happy with the the UPR board.

Well apparently there has been an orchestrated major round of renunciations in each UPR region.

The governor said he will act on that after a meeting later this afternoon with UPR. This was a concerted effort apparently as a protest of the school independence. As of now they still have not released the financial information requested so this looks like it may get ugly.
There is the potential of a major movement by students as a follow up to this. Hopefully it will be peaceful, but something is about to happen.

Students are blaming the governor for all the UPR governance Poole that quit. There may be demonstrations in the next few days.

The governor is required to submit his final financial plan to the Promesa Federal board no later than Feb 28. Part of that is the financial plan for the University which will need to cut down 300 millions. So far the university has not turn in their plan so the governor can not finish his. If this is not resolved soon the Promesa board can take over the university and implement any financial changes it wants and raise the tuitions as it wants.

Hey ReyP - thanks for the info about the UPR. I am in grad school there and though I heard what is happening, your explanation was helpful. You think there's any possibility of the UPR closing? I realllllllyyyy hope not as I am set to graduate this December and just signed a new lease through then!

This afternoon they selected a temporary president and it looks like things may settle down some.

I do not think the university will close but in the days ahead there maybe a few days where hey close.

People understand that this issue can not be allowed to go much further. The university will have to eat the 300 million cut and deal with it and provide the financial data. It is possible that some unsavory things have been going on and that maybe part of the reason why they been hiding the financial data.

I think it will all settle but for a couple of weeks things may be shaky.
Again just my opinion.

The UPR professor's association just approved a two day class stoppage for Feb 23 and 24 to protest the cut of 300 million from the UPR budget over the next 2 years.

Here is a little more about the UPR agreement to move forward and cooperate with the requirement of submitting a final plan that deals with a 300 million cut in budget.
The government advised that this was the right way to deal with the cuts as it was the difference of having surgery using a scalpel versus a machete which would be used if necessary by the PROMESA Federal board. Article in English
http://www.elnuevodia.com/english/engli … m-2292724/

Thanks for all the info Rey! I am trying to stay updated on ElNuevoDia but seem to be missing a lot! I appreciate it. Do you think the school stoppage will occur on the 23rd and 24th? The reason I ask is because i have a test on Thursday and I was going to study all weekend for it, LOL.

The stoppage has been scheduled and it is by the professors association which has nothing to do with the school governance, so In my opinion it will occur. However you should anyway make preparations for the tests unless you hear different from your profesor or school. I am sure in a day or two you will hear something official from UPR.
A little extra studying does not hurt, may cement the concepts more.

I just saw a news article that several university of PR officials have resigned in protest!   Do you think the politicans give a hoot?

They do because it is disruptive to the creation of a financial plan for PR and the university. It is an afront to the governor and the Promesa federal board. It will serve as a delay tactic not to issue the information required and it will backfire. If the Promesa board has to act, they will do the necessary cuts in a way that will not take into consideration how the university would prefer to handle the cuts. If they (university) don't act as adults, the pain will be much greater.

ReyP wrote:

They do because it is disruptive to the creation of a financial plan for PR and the university. It is an afront to the governor and the Promesa federal board. It will serve as a delay tactic not to issue the information required and it will backfire. If the Promesa board has to act, they will do the necessary cuts in a way that will not take into consideration how the university would prefer to handle the cuts. If they (university) don't act as adults, the pain will be much greater.

I've been a professor for 17 years, and I think I can count the number of times that those in academe act as adults on the fingers of one hand.

I work for Harvard, I see all the rallies and screaming almost daily, someone is always demanding something and only their way is right and everyone else is racist, or a nazi.
Yup, 
And I have to watch what I say bacause I am being insensitive and hurting their feelings.
Would you believe that some of the students have apologized for being born white?

Rey, well I didn't study today but there is always tomorrow and Monday (President's day).  Thanks for the updates once again.

Good Evening Rey,  Just read that you mentioned you work for Harvard..did you know of a Professor named
Dr. Mohandes  Kini ??..just curious

Sorry ReyP..spelled Mohandas Kini..

No sorry, I do security for their web sites, basically I am a hacker and have little contact with faculty or students.

LoL!! 😂

A little about the exodus and brain drain going on in PR. English: http://www.elnuevodia.com/english/engli … s-2292998/

From the article:

"Of all those people that packed their bags and headed somewhere else—mainly to the southern states of Texas and Florida—, 41% were not a part of the workforce. "

That is curious.  Puerto Rico has a labor force participation rate of 40%, while the national average is 63%.    So if we expected the emigrants to be representative of the broader population of the island, we would have expected 60% to not be in the workforce.  That is, employment is more common among those leaving.

Of course, this shouldn't surprise too much.  Those who are employed are more likely to have transferable skills, and the financial means to emigrate.

A few months ago I saw a study that showed the income distribution of those emigrating, and it was pretty close to the income distribution on the island.  If anything, there were a few more low-income workers among the emigrants.  The authors concluded that there was no "brain drain".  But it is not the case that high income necessarily follows high education.

Brain drain as in skill drain, not necessarily high IQ.
Participation in the job market goes down as here are less jobs to be had. Also people get tired of looking, specially if they do not have much education. So that means live like a leach, or work under the table / grey market or a mix of all the above. It is hard to participate if they are no jobs to participate in.

I think some of the numbers may reflect people not in PR market heading to the states because there is more opportunity. While skilled workers may be moving for higher salaries, those with few skills and lower education are just looking for any job they can find and if it pays better, then that is gravy.
Just guessing here, I emigrated 43 years ago when jobs back then were few. Not sure what life should have been like had I stay in PR, but it would have been different. My only regret is that I did not purchased a very large plot of land 20-25 years ago, I could have split it and sold some of it or made it a farm.

By now some of you may know that Roosevelt Roads Navy Base in Ceiba was closed around 2004 after many protests against the navy base and its use of parts of Vieques as a target range. http://www.rooseveltroads.pr.govhttps://en.wikipedia.org/wiki/Roosevelt … al_Station

The closing of the base caused a lot of jobs to be eliminated which in turn damaged the economy of Ceiba, Naguabo and Fajardo. Today poverty levels is around 46% and unemployment is around 17.5%.

The government has had a project over the last 4 years to promote the area to investors to no great success. Some small businesses have open there and the airport in the base is still open. The airport was considered to also take some of the load of the San Juan airport but that went nowhere.

Well I just read in the news that Disney may have an interest in the area, however this may be just an interest and may not result in any investment. But it would be great if Disney were to open a park there which would bring a lot of jobs to the area, raise the income, housing prices would go up and it would attract a lot of local and international tourists. Plus also many local businesses would get a nice kick in additional sales and services. There has been talks also of bringing the Cruise ships to the bay in the old base which would make sense if Disney were to open a theme park there.

I hope it goes forward as I purchased land overlooking the base about a year ago, but I am not holding my breath. Some of you may want to take the pulse of this potential development.
Rey

The goverment is making preparations to deal with a posible strike by taxis and other land transportation of tourist. Possibility exist that roads and bridges may be plugged by the strike.
No date has been announced yet but the union is threatening a stoppage. This is because the government has done little to enforce the law that prohibits Uber from picking up clients in tourist areas.

So in the next few days there maybe a stoppage and the goverment is ready to remove vehicles park anywhere in the tourist area where parking is not allowed or where traffic has been blocked.
Bad news that will give tourist a bad taste in the mouth.

Warning from federal control board that painful austerity measures are coming. Article: http://www.apnewsarchive.com/2017/The-n … e8278bc5bb

I don't blame the board, it is not likely that the government of PR has a plan to cut over 7 billion from the budget and the situation with UPR is a good example. They were asked to cut 300 million from their budget and they came up with 112 million plus another 40 million in additional business, which raises it to 152 million, nowhere close to 300 million cut requirement. Big pair of scissors coming.

UPR cayey,
The student general assembly has declared a stoppage of classes until Feb 28. Gates will be open but apparently no classes.

The proposed law that allowed only 4% taxation of doctors have been signed into law. This is a break from 33% to 4%. Doctors have to apply for it and if accepted must provide 180 hours of community service a year.
Who will be selected will be based on multiple factors including their specialty and numbers in that specialty in PR. So this is not for all doctors or unconditional.

Looks like a positive move to stem the tide of exit.

Sitka wrote:

Looks like a positive move to stem the tide of exit.

According to the goverment statistics, there used to be 14,000 doctors 10 years ago and today the number is around 9,000. New doctors fresh out of school are heading out also leaving a lot of very old doctors in place that will soon retire or be too old to practice. The idea is to stem the exit and maybe get some of the ones that left to come back.
Not sure if it will work or not, time will tell.

A little opinion here: I really do not understand how the university (UPR) can try to play games and do protests when a 300 million guillotine blade is ready to shop it indiscriminately if they do not guide the blade. Only UPR knows where the blade will do the least damage but they have not up to now made an attempt to guide the blade. The 300 million cut is going to happen either way, who decides what gets chopped is up to UPR for now, in a few days it will not be up to them any longer.
It is bewildering to me.

Rey,

That's because the UPR have always been managed by a group of arrogant people. They want autonomy from the government but at the same time wants the substance money. Look at all the "professional students " , they have spend all their "adult" lifes at college. So with less money comes higher cost, some of those "students " have their way of life treated.

Well they been told their budget from PR government will be cut from 900,0000 a year to 600,000. No amount of temper tantrum is going to change that.

The board has said that painful austerity measures are coming in the months ahead for the rest of the government, they are not playing games.

About Ceiba:
As usual the government jumped the gun and raised the hopes of a lot of people by reporting on the newspapers that there could be a Caribbean Disney in Ceiba. . Disney responded that they are always looking into expanding their business, and that while Puerto Rico is an attractive market, there are no plans for a park there at the moment. A lot of businesses like Apple for example like to keep a lot of secrets and prefer to be the ones that tell the press when the deal is signed and not before. The government may have killed a possible deal by speaking out without permission or maybe there was never any serious consideration for the idea, I guess we will never know.

In other words, just because they looked some time ago, it does not mean they wanted to buy. Just window shopping!!!!

Not sure what the issue is, but the government has had very little luck attracting any solid significant investors to the area. Several other potential investments have fizzle out. The place is perfect for some huge tourist attraction with hotels and housing to support it. The Macho beach there is a great looking beach with plenty of parking that is not being maintained properly such as removing the accumulated sea weed which is uglying and stinking the place. They could get a prisoner crew to clean up the place or organize the community to maintain it, but no dice.