Ten years ago, Puerto Rican municipal bonds were cheap, easy to purchase, and tax-free. Now, U.S. investors may face the consequences of purchasing Puerto Rican debt, realizing that the territory may not be able to pay. Puerto Rico’s sluggish economy, combined with rapid emigration, has reduced the tax revenue. As a result, the territory has the highest per capita debt of all U.S. states without the necessary means to pay investors.
The Puerto Rican debt crisis has much greater implications for domestic markets than Greece. Unlike Detroit, Puerto Rico’s government and public corporations cannot file for Chapter 9 bankruptcy. Governor Padilla hopes to postpone debt payments; however, many question what would stimulate economic growth in the territory. To make matters worse, Puerto Rican muni-bonds trade in the U.S. markets, unlike Greek debt that is “in the hands of the IMF”. Of the $350bn in Greek debt, only $14bn is owed to U.S. banks. Meanwhile, much of Puerto Rico’s $72bn debt is owed to traditional muni-bond investors (Hedge funds and crossover investors holding the remainder).
In some respects, the Puerto Rican debt crisis is very similar to Greece. It has an overwhelming debt burden and has limited means to pay off the debt. Still, the holders of Puerto Rico’s municipal bonds are U.S. Investors, and the domestic markets will feel the brunt of the crisis.
Google’s education platform, “Classroom”, is helping teachers and students communicate. It operates in a similar space as Blackboard or Canvas, where users can organize assignments, syllabi, and curriculum. Although “Classroom” launched a year ago, the recent facelift will make the platform more competitive in the space.
Google has introduced a new API and “Share” button, creating a better user experience for teachers and students. With the new Classroom API, admins can easily populate the platform with information and sync content from their Student Information systems. Admins also have a better way of monitoring the classes taught in their domain. The “Share” button facilitates the creation and completion of assignments for students and teachers. It allows teachers to post links to sources that augment the curriculum, and students can similarly post relevant information. The recent upgrades to Google “Classroom” could change the way students and teachers interact.
On Thursday, Alibaba launched an all-digital bank, MYbank, which services the financial needs of China’s rural areas. MYbank has no physical branches but uses cloud computing, providing 24/7 access for users. It also uses facial-recognition technology to verify account holders’ identities. With lower operating costs, the digital bank may pass on savings to customers. Still, people cannot open accounts as MYbank faces off against strict regulation.
MYbank could open up the tightly regulated banking sector in China. It has a registered capital of 4bn yuan and is capable of issuing loans of under 5mn yuan. MYbank could also encourage development in the rural areas of China, providing loans and capital inflows to the region. Digital banking has a promising future in China, tapping regions that were previously underserved by traditional banks.
AOL – You’ve Got Bought.
This morning, Verizon announced that it closed on a $4.4bn acquisition of AOL. The telecommunications giant plans to use AOL’s technology for online video marketplaces. For years, Verizon has struggled to penetrate the online video marketplace space, but now it can take advantage of AOL’s technology for selling ads and delivering high-quality Web video. Decades ago, AOL was the authority in web-based platforms, allowing users to combine email and web browsing. Now, the company is a wholly owned subsidiary, purchased to increase digital ad revenue.
When was the last time you’ve heard “You’ve Got Mail”? Tom Hanks and Meg Ryan’s 1998 romantic comedy is a distant memory – a ruin from a different time. Still, the acquisition proves that AOL has a lot of use in the modern world. While apps like Tinder and Hinge have taken over the chat room space, AOL has a lot more to offer than email services.