28 June 2012

Puerto Rico Hangs Itself

"Puerto Rico’s financial condition is far worse than any U.S. state’s, and a default – though unlikely in the immediate future – is a possibility over the next few years."

"Puerto Rico is unique in its extensive use of public corporations to deliver public services. It directly and indirectly manages 48 public benefit corporations. This governance structure has tended to limit transparency and fiscal accountability in its public sector."

"The Puerto Rican economy entered recession in late 2006, and it has yet to emerge."

"...(M)edian household incomes in Puerto Rico remain at $15,000, and only 35% of Puerto Ricans are employed."

"Poor financial management has contributed to the length and depth of Puerto Rico’s recession. The Commonwealth is burdened by large annual deficits, a high debt burden, opaque financial practices, and severely underfunded pension plans, among other problems."

"Unlike healthy municipal issuers, the Commonwealth requires market access to meet payroll and other obligations."

"Annual deficit financing has caused the island’s debt-to-GDP ratio to rise. It is now 90%, compared to 57% in 2001. In fiscal years 2011 and 2012, the Commonwealth’s debt load grew while the economy contracted."

"Puerto Rico’s debt structure is less flexible than other municipal issuers’. The Commonwealth repays only 21% of its debt within 10 years."

"Puerto Rico consistently adopts aggressive economic and financial forecasts. The Government Development Bank has missed economic growth forecasts for three consecutive years. Politicians continue to tout progress on relatively weak financial and economic data."

"The Commonwealth’s major public corporations have significant and opaque financial relationships to each other and to the Commonwealth. These intra-governmental capital flows represent a significant portion of the island’s financial activities, and they are beginning to impact the island’s larger issuers. Last year, almost 28% of PREPA’s (Puerto Rico Electric Power Authority’s) unpaid bills were owed by delinquent public sector organizations."

"The Commonwealth’s vital Government Development Bank (GDB) is under stress. Roughly 35% of the GDB’s assets comprise loans to the Commonwealth and its public entities, and most of these loans are paid late. While the bank’s liquidity is ostensibly strong, it is weakly monitored. The GDB is unregulated by the Federal Reserve or Federal Deposit Insurance Corporation."

"The GDB’s loan book has become a bit politicized. In recent years, the GDB has entered into “fiscal oversight agreements” with several of the island’s large public corporations. These agreements require the public corporations to implement expense reductions, rate hikes, or submit to increased oversight to ensure the GDB is repaid. The bank’s intervention into areas traditionally reserved for policymakers increases its repayment risk."

"Puerto Rico’s public pension funds were 14% funded in FY 2010, and a staggering 22% of the funds’ assets include loans to members of the fund. The Employees’ Retirement System may deplete its net assets by FY 2014 despite recent reforms. The Commonwealth’s pension funding shortfall is far worse than any U.S. state."

"Conclusion: Although the threat is not imminent and the risk remains slim, Breckinridge believes the possibility of a default by Puerto Rico is sufficient to warrant the attention of municipal investors."

"We end with a graph that illustrates just how different Puerto Rico is compared a distressed U.S. state: Illinois. Illinois compares very favorably even though it faces several years of large structural deficits and large pension and retiree healthcare liabilities."

Taken from the Breckinridge White Paper, "Puerto Rico's Challenge," published in March on this year. All emphasis Mine.

The bad news is all Ours.

The Jenius Has Spoken.

Note: Due to a website change, the URLs for the images used had to be reloaded; 16 Sep 2012.

20 June 2012

PREPA Screwing Us Daily...Twice

Here, Brethren: Name the largest money-making, profit-centric agency in Our government?

Now those of you who passed PoliSci 101 will know that a democratic government such as Ours (chuckle) is not profit-oriented. Sigh. Theory is so wonderful, isn't it?

Those of you who get your news from the shoe-sized IQ of Primera Hora's front 8 pages will say "Hacienda, coño," and you would be partially right, as Our Treasury Department is set for collecting money. But technically it doesn't make money because it doesn't produce anything...of value to Us, that is. Plenty of pettifoggery and corruption, though, to serve syphilitic hyenas.

And for those of you "Brethren" who get your news mainly from a 6 o'clock closet gay puppet-brain with barely the morals of a back alley ghetto crack whore, you aren't reading this anyway, so screw all of you and the horses' asses you vote for with reptilian passion.

The answer is the Puerto Rico Electric Power Authority, PREPA for short. It makes money through its monopoly on electricity. It makes huge amounts of profits because it is a monopoly of electrical power. And those profits fuel the bond issues--the rising tide of long-term debt--that powers (pun intended) the current cash-grab We call government.

How does PREPA screw Us daily? Let Me repeat Myself:

1) By creating debt: Since 2009, as sales tax based (IVU) bonds were declining because (a) sales tax revenue was getting farther and farther away from projections and (b) the debt limit there was reaching the breakdown point, PREPA and its bonds emerged as the primary shafting device to mortgage Our future as the diseased hyenas raked in their gains now. Whether pretending to reinvent government and economic policy or trying to shove a GasoDildo through the Island, PREPA's bond issues have exceeded former limits by at least $1.8 billion and helped push Our national debt level to equality with our Gross Domestic Product. In other words, We owe as much money as We take in, while Our debt rises and Our "income" falls. You know what a recipe that makes.

2) By overcharging Us in the "fuel surcharge adjustment": I'll keep this simple, because it is. Regardless of how much PREPA lies--blatantly and consistently--about what the adjustment formula is and how it applies, the basis for it is simple: We are paying an extra fee based on one part of the electricity production cost. Why? Because the electrical rate is regulated, more for political reasons than economic ones. So rather than adjust the rates (fair, but costing whatever poopyheads are in power votes), We get the adjustment fee.

Look at the scanned bill. Yes, it's My bill. Actually, Mine and Dr. Mrs. Jenius'. It says We used 400 kilowatt/hours (kWh) of electricity in a 17-day period. (We moved recently.) The fuel adjustment charge came out to $70.65. The electrical rate was only $15.17, or $35.25 if you want to toss in the "basic charge."

We paid $70.65 for fuel, for 400 kWh. How many kWh does a barrel of oil produce?

1,700 kWh.

And what is the current rate (as of today) of a barrel of oil?


So how the fuck does PREPA justify """adjusting""" the fuel rate to make $299.64 a barrel? 

Now, it's true that the oil they bought was purchased several months ago. Let's check what the price of oil was averaging 6 months ago: about $104 a barrel. In any case, it topped out at $111 or so over the past year. Does that in any way """justify""" making close to 200% mark-up profit?

HELL no.

Unless of course, your primary goal is to rake in as much cash to sustain a severely bloated workforce, pay for executive-level compensation in the $200-300K each a year for a dozen or more lackwits, some of whom are actually stealing electricity and furthermore being the economic engine of graft, corruption and thievery know as the (non)government.

Who controls the electrical rate We pay? The government, """for the public good."""

Who controls the fuel surcharge We pay? PREPA, against the public good.

I'd say We should strap them all to an electric chair and throw the switch, but that would overload the system.

Let's set them on fire, instead.

The Jenius Has Spoken.

14 June 2012

Enslaving By Debt

One of My first posts to gain traction, as they say, was one where I incisively accuse My Brethren of falling all over themselves to become debt slaves, pursuing consumerism to the point of losing any chance at growth, prosperity and even happiness.

A gentleman in South Africa picked up on the title, I suppose, and accused Me of being over-dramatic. I excused his ignorance, since I am fully aware that for Me to consider a remark about his South Africa as "over-dramatic" I would have to actually know something about South Africa beyond "where it is, Nelson Mandela, Desmond Tutu, the Boer War, diamond mines and apartheid." I gather the gentleman from South Africa can't locate Us on a map, can't name two of Our leaders (and for you partisan pukes, governors and head beggars in D.C. don't count...ever) and can't name any of Our resources or major concerns. So there.

But look at this nifty quote worthy of reflection even if it is smeared on a redneck billboard:

Tell Me, Brethren O'Mine, that this doesn't make a ton of freaking sense in describing what has happened on Our little patch o'green since 1898. (Yeah, I'm going there...and more.) In fact, it's been happening since 1508. (See?)

Try--try, I ask you--to think back to the pathetic, nauseating, fecal-brained excuse for History of Puerto Rico classes We were subjected to over the years. You know, the ones where We went from Christopher Columbus (a guy many teachers implied was Spanish rather than Italian) "discovering" Us in his second voyage (ignoring the dramas and background of his other 3 voyages) and Ponce De León becoming Our first governor, then leaving to die in Florida (the only smart exit We've ever had at that position), to dead Taínos and the 19th century, then 1898, and zoom! The "American" years, blahblahblah. You know, the (Offthe)Cliff Notes version, sans any sense of culture.

Maybe there was a 10-minute segment somewhere, once in grade 4 or 7 or 11 when a teacher would yak about jornaleros, the practice of giving workers little booklets to keep track of their work. Without a jornal, you could be arrested for vagrancy, treated as a non-entity, so getting a jornal was key to making it in Our society. So of course, the system was abused.

One of the many abuses was the eventual development of vales, payment in scrip that wasn't real money anywhere except at the stores the jornalero selected, usually his own. Of course, the prices in these stores were high and thus the poor obrero was stuck having to go into debt to cover the needs of himself and his family, a condition exacerbated by the fact that without his jornal, he couldn't find a job elsewhere.

Debt slavery in its nascent form.

Let's imitate the lousy History of Puerto Rico crap We've been force-fed and skip to 1898, the Year the U.S. of part of A. treated Us like war booty then got all nasty on Our asses. Huge plantations went up, sugar cane as King of Crops, with workers doing six months of work and then being laid off for six months. No jornales, but every big Americuchin plantation had one thing: a big-ass general store. And if you worked for that company, you were expected--very much expected--to buy at that store.

Some of these haciendas even had their form of vales, though they didn't call them that...of course. But the function of the store and work system was the same: create debt to control the worker.

Now those were the bad old days, when Puerto Rico was under-funded and lacked a general infrastructure for growth. Now We are over-funded (We are; topic to revisit another day) and We have a general infrastructure for--cough cough--growth. And yet, look around, Brethren: how many of you and the people you know are on a treadmill of "I have to keep this job because I have debts to pay?"

Now remember, please, that less than half of Our adults are in the workforce. So half of Our "labor force" is pretty much dead weight for whom debt slavery would be a step up. Of the other half, how many are in debt slavery? 10%? 30% 50%?

I'm estimating that close to 80% of Our workforce--small as it is--is in debt slavery. I'm basing it on two simple principals: observation  and the Pareto Rule. Yes, I'm saying that 80% of Our working folks are debt slaves. Want additional proof? Check out Our use of credit and shopping habits: they're not all driven by "welfare-dependent non-producers."

Wrapping up, are We enslaved? Hell, yeah. But back to the premise of My original post, now We are choosing the enslavement, rather than knuckling to overwhelming pressure.

In a time when the power of the individual is at its highest (in Our part of the World), the capacity to see and use that knowledge must be developed, and the basis for it is to ground the individual in a culture and society where making one's own choices are more important than ignorance and following the crowd.

When--if ever--were you told that?

Yeah, I know. There's a first time for everything, eh, Brethren?

The Jenius Has Spoken.

[Update: 5 July 2012: From EconMatters, Americans are "Enslaved to the Debt System." Well la-di-dah.]

07 June 2012

Health As In HELLth

I had surgery yesterday, for an umbilical hernia I aggravated more times than I care to admit. It wasn't as traumatic an event as one might think for three very good reasons:

1--This was My third operation, the first occurring when I was 3 years old.

2--I wanted the operation, since My overall health was being compromised.

3--My Wife is a medical doctor.

What struck Me most about My surgery was several seconds after having an anesthetic dropped into My IV, while watching the nurse place a blood pressure cuff on My arm, I went blank. Out like a light. Zap. Woke up about 3 hours later with Dr. Mrs. Jenius sitting next to Me and within an hour of that I was getting into the car to go home.

All's well that ends well, right?

Not exactly. For although My surgical experience was relatively painless, the whole procedure leading up to it was a sidewalk in the upper levels of Hell.

It took a total of eleven visits to doctors' offices to get the required paperwork, seven of them to the same fat toad of a bitter bitch who after the fourth visit "suddenly remembers" at 3:00 o'clock that I need an X-ray done that day... with the radiology center closing at 4:00. If I had followed My instincts, the fat toad's bitter box of an office would have harbored My arrest for vandalism, but Dr. Mrs. Jenius' wisdom and practicality prevailed.

The problem, as several doctors took the time to tell Me, is that Our health system is a shambles, where insurance companies make out like bandits, specialists are being used primarily to pad medical records (in attempts to ward off lawsuits) and general practitioners are treated like wage slaves. And since the focus of the health system is on treatment rather than prevention, We as patients get less-than-stellar service that borders on fostering addiction rather than enhancing health.

Nothing new, right? Well then Why do We put up with this? I see 3 reasons:

1--Health care as politics: The overwhelming vision about Our society's health system is that it is a political issue rather than a medical one. In other words, health care is manipulated to garner votes, not to actually improve health services. And since We are what We are, the political side invariably leads to corruption, so hospitals are sold in sweetheart deals, insurance companies play merry-go-round with health services and medical personnel are respected yet treated like peons.

2--The business of health care is business: If mechanics worked on Our cars the way the health system works on Us, they'd staple, glue, tape or jury-rig autos to run for a few miles and then break down again in order to create a steady stream of clientele. Insurance companies count as profit the money they don't spend on Our health, so the system is set up to generate revenues by not really curing a patient and not really treating a patient. That's where the real tug o'war emerges, further pushed by pharmaceutical companies and laboring under the weight of potential lawsuits...that raise the already-crushing insurance rates for doctors.

3--We believe in "magic cures" rather than taking care of Ourselves: Take Me. Knowing I was already injured, I kept indulging in sports, hell-bent on competing. I knew surgery was needed to patch the break in My abdominal wall and kept putting it off until it wasn't optional anymore. Many of Us do the same with Our diet, alcohol, drugs, laziness and more. In short, We do what We want and then expect the health system to fix Us up so We can go back and do what We want again. Because We don't take care of Ourselves, We care very little about the system. Because We don't take care of Ourselves, We end up needing the system, especially when it comes to diabetes, high blood pressure and heart conditions. And because We don't take care of Ourselves, We end up being held hostage by fat toads with bitter bitchiness spewing from every pore.

I'm feeling fine now, somewhat sore and walking in a hunched manner. I already know I'm going to very careful in the next several months, exercising to get back into shape, but making sure I don't let My competitive side take over and push Me too far. What's crystallized in My Mind is that to every extent I can, I will not be held hostage by another fat toad of bitchy bitterness. That's part of hell I don't want to visit again (or have Dr. Mrs. Jenius do for Me.)

Odd, but the very hellish nature of the system make actually be My strongest incentive to focus on prevention. That and avoiding another look at the ugly toad's sour wreck of a face.

The Jenius Has Spoken.