Bernie has recently made some ridiculously misinformed and clueless statements regarding Puerto Rico's potential default on it's municipal debt.
..............................................................................................................................................................................................................................................
Mr. Sanders said that what he termed “vulture funds” had been buying up Puerto Rico’s debt for as little as 30 cents on the dollar.
“Why should they get 100 percent of their investment when they are paying 30 to 70 percent for their bonds?” he said.
Mr. Weiss said that some debt securities were yielding 11 percent.
“Whoa!” Mr. Sanders exclaimed. “They are receiving 11 percent and children in Puerto Rico are going hungry. That, for me, is not an equation that works.”
Mr. Sanders said he had heard that some of the bonds the island is in danger of defaulting on might have been issued illegally and perhaps could be torn up. “Should debt be repaid if it was incurred in an unconstitutional way?” he asked, harking back to an argument that changed the course of Detroit’s historic bankruptcy. Whether that was true in Puerto Rico’s case was unclear.
http://www.nytimes.com/2015/10/23/business/dealbook/a-chilly-reception.html?_r=2
..............................................................................................................................................................................................................................................................
Bernie is conflating the secondary bond market with the primary bond market, and cannot see how a default would hurt the purchasers of the bonds in the primary market....
But what about the widows and orphans and union pension funds that bought Puerto Rico bonds at full face value (and a lower coupon rate)? Does Mr. Sanders care about them? Or should they be screwed just to satisfy Bernie Sanders’s lust to punish Wall Street?
Bernie, Bernie, Bernie...
Good thing he is only running for VP!