News about the economy page 8 - Puerto Rico forum

News about the economy

5509POSTS

9 years ago

Karenqc wrote:
Also saw this today for anyone interested, it's an concerning the diversion of revenue for toll backed bonds.

I could be wrong but I heard the funds were to be frozen until the tittle 3 judge makes a decision. What a tangled mess.

ReyP ViP

5509POSTS

9 years ago

#282

Seems that projections are that PR economy聽 will not start to grow until 2025 or 2026. I think it is way too early to make any projections, we have yet to implement the 1st balanced budget and as such we have not seen yet what effect it has in the economy.

WarnerW Serial expat

314POSTS

9 years ago

#283

Who's projections?

ReyP ViP

5509POSTS

9 years ago

#284

Governor office

WarnerW Serial expat

314POSTS

9 years ago

#285

Thanks!

I don't think it's too early for projections -- I just don't trust them to be terribly accurate.聽 But planning can only be done on the basis of projections.

Second, some projections are likely to be more reliable than others.聽 For example, I've said elsewhere that I don't expect the economy to improve in fewer than 10 years.聽 But that's a shot in the dark, based on what I see as the severity of the problem.聽 My "sense" is not a "projection" as it is not based on empirical data.聽 Others however may make more formal, rigorous studies of the economy, and their projections are more credible than my gut feeling.

Lastly, I appreciate the source because I'm interested in making an argument that the economy is not soon to recover and that real estate prices are likely to continue falling.聽 In this case, a projection from the governor's office is more persuasive.

ReyP ViP

5509POSTS

9 years ago

#286

The word improve can be interpreted many ways.聽 If the economy is in a downward roll to me improve means a shallower decline or a flat line that may continue to improve and start moving upward. In my definition it does not mean getting better than 2016-2017. Just better than whatever year we happen to be at in the future. So if it drops 10 percent, improve to me is the next year we do not drop further.

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WarnerW Serial expat

314POSTS

9 years ago

#287

A fair point, especially as it relates to the general economic problems facing the island.聽 If in the 2017 calendar year the island experiences 2% emigration, a rate of 1.5% for 2018 would be an improvement.聽 The situation is still getting worse, just not at the same rate.聽 Moreover, if the rate of emigration continues to drop, then we can indeed claim to be making progress.

The same holds true for the island GDP.聽 If the GDP falls by less and less each consecutive year, you can truly say that even though the island's economy is still shrinking, we are making progress.

However, if you are looking for the bottom, for the point when things begin moving in the right direction (as opposed to moving not so fast in the wrong direction), that may well be ten years out.聽 And since the point that I want to make is that real estate prices will likely continue to fall (and foreclosures continue to rise), I'm looking for that bottom point.

ReyP ViP

5509POSTS

9 years ago

#288

Agreed specially about the 10 years, I used to think 7 but now believe 10

ReyP ViP

5509POSTS

9 years ago

#289

Think on this, waiting for a bottom for years means years where you do not get to enjoy the property or years where you do not make money with the property. Properties can only go so far down and then there are few selling.

If I can rent something short term and make 40k, waiting a year or two for the price to drop 10k means I am loosing money by waiting.

adlin20 ViP

1057POSTS

9 years ago

#290

The downside of this scenario is the rent prices most likely will fall as well. Only select areas bring higher rental prices. Away from the metro or turist area the rental prices decline significant. If you invest, lest say, $50K on a property and you can only rent it for $400/m your ROI will take 8-10 yrs to be significant. If, in other hand you are looking to purchase for your personal use, then it is worthed buy as low as you can. Taken into consideration that it will be a long time before you can turn around and make a profit on the property.

This is an ideal market to purchase a retirement property in a beautiful place. You have a secure income (pension plan, 401K, ect) and don't need to worry about finding a local job. And are aware that with the beautiful island comes compromises.

The economy will turn around, it may take longer or shorter time. The deal is being prepared if the needs arises.

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ReyP ViP

5509POSTS

8 years ago

#291

Poll Results about personal financial situation:

WarnerW Serial expat

314POSTS

8 years ago

#292

ReyP wrote:
Think on this, waiting for a bottom for years means years where you do not get to enjoy the property or years where you do not make money with the property. Properties can only go so far down and then there are few selling.

If I can rent something short term and make 40k, waiting a year or two for the price to drop 10k means I am loosing money by waiting.

Once again, I'm in agreement with you.聽 I understand opportunity costs.

I'm hoping to make the case to a seller that my offer (which he has had in his hands for six months) is reasonable, if not exactly the asking price, because real estate prices will fall in the future.聽 I'm not looking to get "rock bottom" prices, merely trying to motivate the seller so I can buy now.聽 Lest you think I'm trying to "low ball" a seller, my initial offer is at 85% of the asking price, and I'm willing to go higher.聽 I just can't get him to make a decision.

Adlin is spot on -- the declining economy means all prices, including rents, should fall as income falls.聽 Our goal is to buy for retirement and live on investment income.聽 If the property can also provide some modest income (airBnB for instance), then that is a bonus.聽 I'm not an investor looking to turn a profit on the purchase, merely hoping to buy in a buyer's market.

ReyP ViP

5509POSTS

8 years ago

#293

AirBnb type rents should not be affected much by the downturn. What affects it is mostly too much competition in my mind.

A full house 3 bedrooms that sleeps 6 or more is a steal at 200 a night instead of 3 hotel rooms.

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Mrkpytn Serial expat

373POSTS

8 years ago

#294

My airbnb income grows yearly. More places are listed at highly competing prices but the figures improve regardless. Tourism has been increasing from my statistics. There is definitely a shift in process.聽 I will be getting a contract on my building that I have for sale in North Carolina for July and by August I will be in PR full time.聽 All my eggs will be in one coop but in a few baskets. I seem to be in tandem with the Chinese. They are building a cultural center and I am building a nature/art/ agriculture/indigenous cultural center. They plan on building an eco tourism聽 hotel and I am building an eco tourism Taino finca/ colonial home聽 resort. They are investing hundreds of聽 thousands of dollars and I am investing little thousands. We are on the same page. We believe in the potential of Puerto Rico.聽 I am tiny they are big. I have always have had difficulty wrapping my brain around the fact that a lot of Americans (excluding expats of course), individual and corporate do not see the true value of Puerto Rico culturally and naturally. The can live and work without the restrictions of foreign ports.聽 Corporations seem to use the Island to get what they can from it and then leave when they have gotten their fill and is no longer profitable. The oil refinery in Guayanilla for example聽 in the 60's, I think, closed and left 35.000 people unemployed,聽 the effects are still taking place on the South coast and Dominion sugar before that. I hope the Chinese and other investors have more integrity. I plan on doing my part and I will share the ups and downs as I continue on this adventure.

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ReyP ViP

5509POSTS

8 years ago

#295

Sounds like a great plan to me.

1 member reacted to this post

adlin20 ViP

1057POSTS

8 years ago

#296

Sounds like a great investment for you. Hopefully it will be profitable to keep you happy and secure. I have our rental property in place and generating an income. We are finishing the guest room to make it into a airbnb, hopefully very soon. Now that we are in the island on a more permanent position we should be able to have the room ready sooner.

This week we are traveling so work will have to wait until we come back next week.

ReyP ViP

5509POSTS

8 years ago

#297

While this article about emigration has statistics, it reads more like an opinion piece to me so I was not sure if I should post it, but here it is. It does seem to clash with other articles that say emigration is increasing and it seems to me that this article defies logic.

Gary ViP

1845POSTS

8 years ago

#298

No clue if it is a representative group of respondents and then the decreasing number is not the actual emigrations but the intend to move to the lower 48.

They also mention more than once that for every person that moves to the island four people are leaving. Sounds like a lot to me..

The sub-header of the article is:
"However, they warn that this does not mean that less migration will take place in the next few years."

I guess that that is exactly what we will see...

ReyP ViP

5509POSTS

8 years ago

#299

Truths, lies and then there are statistics.
Most people expect an increase in the emigration.
Joking: If we get enough Puerto Rican in the continental US and they start multiplying like rabbits, maybe Spanish will be the most spoken language in the US and the roasted pig will supplant the turkey at the dinner table.

Gary ViP

1845POSTS

8 years ago

#300

ReyP wrote:
...roasted pig will supplant the turkey at the dinner table.

That would be a good development.

ReyP ViP

5509POSTS

8 years ago

#301

7.8 millions down the drain. For those interested in the Plebiscite that will be voted on tomorrow (Sunday):

The governor was told in April that in order to get the second review of the plebiscite language, review of the ballot, certification by the justice department and the 2.5 million allowed by law, the plebiscite would have to be delayed. Yet the governor decided to forgo that and kept the June 11 date, he also apparently decided to tell the people that the justice department was sitting on the paperwork and that we could not wait, when in reality he was told to delay or there will be no review, certification or money.I am not sure about you guys but in my home town we call that a lie.

The part I loved the most in the article is the big lie about coming out of the crisis, this is what they stated: the governor decided to maintain the original date of the plebiscite 鈥揓une 11th- so that the people have the opportunity to decide their future and, in so doing, "emerge from the crisis鈥�,claimed yesterday the Public Affairs Secretary of La Fortaleza, Ram贸n Rosario

This would imply that waiting 3 or 6 months would mean that people would not then have an opportunity to decide their future. Also the way I read it it implies that if PR decided on a status change, then PR would come out of the crisis - which we all know one has nothing to do with the other as it will be many years before the crisis can be over regardless of the status of PR.

ReyP ViP

5509POSTS

8 years ago

#302

Suggested reading :

I personally think this current agreement should be thrown out and move the issue to Title III to be solved by the court. A haircut on the 9 billion of 8% under this current deal is way too low. Under title III they can probably get at least a 25% cut on the original 9 billion debt.

Just my opinion, you guys may have a different one given that lack of maintenance until funds are available can cause more disruptions to the electrical system.

lgustaf Serial expat

401POSTS

8 years ago

#303

I agree, Rey. 8% is just a feel-good gesture. Anything less than 25% won't help PR at all and would likely prolong and exaccerbate the damage.

ReyP ViP

5509POSTS

8 years ago

#304

Also interesting read:

Since the language of the bill previously introduced (with zero backers) was based on expectation of聽 the approval of the justice department of the Plebiscite, the language and the ballot. The approval never occurred, so they are introducing a new bill.

Excerpt from the news article: "The Resident Commissioner has to (throw away) her project and explain the Congress why it has to respond over the result of a plebiscite that does not even comply with what she proposed in January this year鈥�, said Acevedo Vil谩.

Until last night, the president of the Energy and Resources Committee, Republican Rob Bishop (Utah), had kept silence over the plebiscite results, despite multiple moves.

However, the Subcommittee on Insular Affairs president, Republican Doug LaMalfa (California), said to The Hill鈥檚 publication that the priority is still the fiscal crisis, especially after the low participation in the plebiscite.

The comissioner foresees an status hearing in September at the latest, but Bishop said last week that his plan is to hold another view over the fiscal crisis and the public debt."

lgustaf Serial expat

401POSTS

8 years ago

#305

I thought this an interesting read:

lgustaf Serial expat

401POSTS

8 years ago

#306

Some good news for PR:

ReyP ViP

5509POSTS

8 years ago

#307

lgustaf wrote:
Some good news for PR:

I have not seen anything about this in any of the normal news, so this is likely false.

Why false?
Because the Junta created by the Promesa law does not have the power, only congress does and it is my understanding that there is opposition in congress to the idea.

lgustaf Serial expat

401POSTS

8 years ago

#308

ReyP wrote:
lgustaf wrote:
Some good news for PR:

I have not seen anything about this in any of the normal news, so this is likely false.

Why false?
Because the Junta created by the Promesa law does not have the power, only congress does and it is my understanding that there is opposition in congress to the idea.

You could be right. It was posted by one of our X-pat members on Facebook. I wasn't able to find any corroborating source.

ReyP ViP

5509POSTS

8 years ago

#309

lgustaf wrote:
ReyP wrote:
lgustaf wrote:
Some good news for PR:

I have not seen anything about this in any of the normal news, so this is likely false.

Why false?
Because the Junta created by the Promesa law does not have the power, only congress does and it is my understanding that there is opposition in congress to the idea.

You could be right. It was posted by one of our X-pat members on Facebook. I wasn't able to find any corroborating source.

I posted one from the same site about a nude beach in PR and I was told it was not true. Same web site so I don't believe anything from there anymore.

If it was true it would be all over the PR news.

Gary ViP

1845POSTS

8 years ago

#310

Too bad. We could use this but it looks like nobody in DC gives a d...

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SawMan Serial expat

577POSTS

8 years ago

#311

This article presents the a view on the Jones Act and the effect it would have on Puerto Rico investment, etc. and why (according to the author) repeal would do more harm than good.聽 Presented with no opinion other than long-term problems never have short-term solutions:

ReyP ViP

5509POSTS

8 years ago

#312

SawMan wrote:
This article presents the a view on the Jones Act and the effect it would have on Puerto Rico investment, etc. and why (according to the author) repeal would do more harm than good.聽 Presented with no opinion other than long-term problems never have short-term solutions:

Interesting how excepting Puerto Rico would cause all that damage to the US and its security,聽
I think is ridiculous. It is a monopoly, US ships get delayed, and they sink like any other ship.

With competition we get better prices and delays hurt the shippers since they would loose the business that would go to somebody else that is more reliable. PR also wants to create their own shipping fleet and run their own ports.

lgustaf Serial expat

401POSTS

8 years ago

#313

I also think it's ridiculous. But then. I think there are many things ridiculous about the US relations with our Caribbean neighbors.

WarnerW Serial expat

314POSTS

8 years ago

#314

I am, in general, opposed to government-mandated market distortions.聽 However, I trust the AMP's statement that the Jones Act is a net benefit about as much as I trust the UPR economists' that the Jones Act cost the island over $500 million in 2010.聽 A link to the GAO report cited in the article above is .

As far as I'm concerned, the most compelling reason to grant the exemption is to demonstrate to Puerto Ricans that the economic mess they find themselves in is of their own doing.聽 Playing the victim isn't going to help them at all.

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