SO I WAS A LITTLE OFF ON MY BET ABOUT THE PROPORTION OF PUERTO RICO BONDS HELD BY SMALL INVESTORS, BUT MY ARGUMENT, THAT CHANGING THE RULES ON THEM WOULD BE BAD, STILL HOLDS
On Friday I posted about the Puerto Rico debt crisis and pointed out that there will undoubtedly be individual investors who will be adversely affected if the government changes the rules on those investors’ priority for repayment. According to a report from CNN Money that I hadn’t seen when I wrote that post, but that is dated February 22, about 45% of Puerto Rico’s bonds are held by individual investors, either directly or through mutual funds. So I was a little off when I said I’d be willing to bet that the majority of the bonds are held by small investors.
My point still holds about why changing the rules would be very bad. In fact, if the figures in that CNN Money report are accurate, nearly a third of the bonds are held by individual citizens of Puerto Rico. So changing the rules on priority will hurt a substantial number of Puerto Ricans whose savings are invested in their homeland. How is it fair to change the rules on them after they made those investments?
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