Skip to main content

Puerto Rico | Raising Rates



McKinsey Advises Puerto Rico on Debt. It May Profit on the Outcome.

McKinsey has been advising Puerto Rico on its various debts, but it has come to light that the company actually is in a conflict of interest, as they own many of the bonds issued to PR through an independent arm. When writing the financial restructuring laws of PR, Congress had omitted some of the disclosures that are normally required in the US, resulting in this situation. It has already seen a surprisingly beneficial return on sales tax bonds. Now, it stands to be seen if there will be a file of bankruptcy, or if a judge may get involved in these affairs- especially as some have called this involvement by the firm unprecedented.

Feds Raise Rates for 3rd Time This Year with 1 More Expected

The central bank has raised interest rates for the 3rd time this year, and the 8th time since 2015. The rate is now 2.25%, and with scheduled rate raises in the year to come, is expected to peak around 3.4%. The choice to raise rates is sometimes a counter against rising inflation, a threat that may come from the trade policies recently in place. There are concerns that prices will continue to rise as a result of the trade, however. And there are concerns by others that think officials are overestimating the current strong economic trends by progressing these rates.

Comments

Post a Comment

Popular posts from this blog

Opportunity Zones

A Big Tax Break for Socially Responsible Investing Opportunity zones have recently been pushed as a development incentive, hoping to spur capital investment in underserved areas. They work in an interesting way- investors use their "embedded gains" by reinvesting the profits into opportunity zone funds. The longer they maintain the investment the larger the tax break that they will receive- from 10%, to tax free if it lasts for 10 years. However, there are risks involved. Some investors hesitate, wondering if they would get money out of the areas in which it was placed. Additionally, there are concerns about tracking the progress in an initiative with no background. Others hesitate based on questioning how it will benefit the community. Those who seek to be socially responsible, in particular, want added layers of diligence in order to be sure that the area is truly low income, or will see a community change for the better. The regulations for these areas are not yet ...
Post a Comment
Read more

CRA Update | Flood Mitigation

It's Time to Rewrite Fair Lending Rules (Just Not Like This.) This discusses a potential change in the 40 year old Community Reinvestment Act, which originally helped to prevent discrimination in mortgage lending by requiring that low income households were served. However, the update proposed by the Trump administration is threatening to remove the nuances that make the CRA effective. The resulting changes would set concrete numbers, which make it easy for banks, but obscure the diverse needs of communities- and, importantly, in setting a uniform standard across different types of banks, many would get away with a lower standard of accommodation that allows for segregation patterns. As Jesse Van Tol is quoted - "Making a better mousetrap doesn't get around the fact that it's a mousetrap." Houston's Multi-Billion Dollar Bet to Survive the Next Harvey Houston is still reeling from the devastation from Harvey, especially when considering how to move f...
Post a Comment
Read more

Education Spending

The data I chose to look at referenced differences in K-12 education spending, an enormous $611 billion (2015) industry at the state and local level. It has been the largest sector dedicated to direct spending by such governments ever since 1977. There are also looming questions about not just the funding, but how the funding is being used, and its progressivity and “fairness.” To start, it helps to see the patterns of spending. In 1977, the state and local governments spent less than half of today’s spending. Even still, it’s lessened as an overall cost from 26% of direct expenditures to 22% in 2015, due to the excess of spending in other sectors outweighing any sense of growth. Today, about 40% of local funds are dedicated to education spending, and more interestingly- 99% of state and local K-12 spending comes out at the local level- only 5 states have state governments also provide for some of their total education spending. The federal government is also involved, but relative...
1 comment
Read more