Would Puerto-Rican crisis remind you of Greece’s situation 4 years ago?
- same relative size compared to their respective mainland counterparts
- similar cultural differences versus their “mainland”
- both being the vacation destinations for arrogant “Northerners”
- both have shrinking populations
- both had chronic budget deficits, potholed tax collection, and poor tax
- reporting system
- I have many friends at both:)
What can we learn from the Greek crisis, though?
- The crisis would last a really long time. This is a today’s headline from BBC: “Greece hopeful of a deal on next bailout loan tranche.”
- Bondholders should and would take a cut.
- No serious investor had any illusions before, therefore… Eat it!
- Ultimately, it requires structural reform which is painful.
- At the worst point for during the debt crisis, it is a terrific time to scoop up those distressed bonds.
Do you see those similarities too? Anything to add?