Public sector workers should be very angry about debt buy back, but they won’t be

After 5 years of wage freeze, the PNP government has offered a mere 7% increase in wages to public sector workers, stating its inability to pay.

Now we know the government has taken a decision to pay over US$60m more per annum to service this new US$2B loan that it took at a very high interest rate.

So while  we cannot pay our poor public sector workers more, but we can cough up an additional US$5M or JA $938M more per month to pay to rich bankers both locally and overseas .

Public sectors unions should applaud this move move by the minister .

PetroCaribe Debt is NOT included in Jamaica’s overall debt numbers, so no reduction in Debt/GDP Ratio from debt buyback !

The financial analyst have all been saying that the recent debt buyback from Venezuela will reduce Jamaica’s Debt/GDP ratio, but amazingly this really NOT true as I am not finding out.

Here is the info

Jamaica’s public debt is expected to reach $2.072 trillion at the end of March, but PetroCaribe is not calculated in the amount, based on the way the debt is calculated.

If PetroCaribe were added to the stock of debt, the figure would climb by 8.1 per cent or move to $2.24 trillion.

http://jamaica-gleaner.com/article/lead-stories/20150304/jamaican-government-giving-serious-consideration-buying-back

The IMF calculation of the debt/gdp ratio uses the overall debt of $2.072 Trillion, which does NOT include the PetroCaribe debt numbers and hence having signed off on the US$2B bond issue, Jamaica will see no change in this ratio.

Why is it that not a single one of the various analyst who have been interview thus far has made this information available to the public.he

I keep saying the lack of research in this country is a huge problem and once again, I take the statements from these so called experts with a grain of salt and so end up doing my own research and come to my own position..

So folks there you have it, we have all been mislead by the Minister and his band of expert analyst on radio and tv.

Its amazing what a little bit of research can produce.

What is happening with the 360MW project ESET ?

Can we get further update on what is taking place here. JPS was working on and we were told had signed with GE to convert the Bogue plant to LNG. We were also told that LNG contarcts were being firmed.

JPS we were told was given approval to build a new power plant, what is going on their, when will construction begin ?

ESET please tell us what is going on .

Current crop of labourite leaders are the worst ever !

While I have huge dislike for the PNP as a government, given their inability to  address crime and generate growth in the economy, I must admit that the JLP is not yet ready to hold the reins and that is sad.

I firmly believe that the JLP having spent so much time in opposition, really do not know what leading the country means and have so far not placed themselves in a position to offer leadership.

The average age of the various spokesmen in the party is about 62, which is just 3 years shy of legal retirement for those in the public sector. Some of these guys are as old as mid 70’s and have not tasted power or been in the position to lead for more than 5 years of their entire political life.

What can Charles, Henry, Samuda, Chang, Baugh, Smith , Hutchinson  (he his not running again) etal bring to the table in a JLP led government?  They have been in opposition so long, they have nothing to teach the young JLP members what it means to lead, because they have not been in any position of leadership for such a long time.

Andrew Holness, the soon to be deposed leader of the JLP for example has been a MP for close to 20 years,  of which, 16 or 80% of which he has been in opposition. It is therefore not easy to make the transition from being one who is looking for problems, to one who is looking to solve problems hence the party is not seen as creating any avenue towards leadership.

The party cannot even put together a decent list of possible Representative, care takers at the local level without war, demonstration, throw wud and acrimony . If ths is how they behave in oppostion can you image what we are likely to see if they gain power.

Jamaicans do not want to take that chance again with the JLP and to make matters worst, the leader of the party Andrew Holness cannot hold it together. If Holness is not as selfish as I think he is, he will need to facilitate the entry of Tufton and soon rather than later step aside as party leader to give the party a better chance at victory.

I suspect much like his mentor Edward Seaga, he will NOT give up that position and will punish anyone who dares to challenge hi for leadership and will become the most “successful” opposition leader in Jamaicans history.

He would have been one of if not the only leader who would have led any party in Jamaica to to most electoral defeats in the national polls and never to have become Prime Minister of Jamaica.

PNP is bad, but sadly the JLP is not a viable alternative at this time and that is a tragedy.

Portia Simpson Miller dodges the public once again !

All news media yesterday afternoon reported that the Prime Minister of the country was going to give a rare broadcast to the nation at 8pm ( we got this news about 4:30pm).  Many were eagerly  awaiting this rather strange and impromptu broadcast, but lo and behold, within an hr of the initial announcement, were were told the broadcast would not happen.

We were never told why it was going to happen in the first place even though I believed the question was asked and we were never told why it would not happen and when it may now happen.

This is current governance the Jamaican way.

I guess we will have to wait until she is on the political platform come September before we hear any word from her again, unless the opposition ” draw har tongue”  before then.

Is this the best we can do in Jamaica ?

Are we willing to continue and accept this level of mediocrity ?

Andrew Holness will NEVER become Prime Minister of Jamaica

There are many labour party supporters who are still bitter with Andrew Holness, with how he and his party treated them the last time they were in office . Who can forget being asked to tender their resignation even though they had done nothing wrong . Many will not forget being pushed out of their jobs to make space for others, they shall not forget.

Comrades do not throw each other under the bus, but for Andrew he has no problems doing so with his own.  Many labourtite have said that as long as Andrew is the leader of the party, he will NOT get their votes , because they do not forget. Many to whom I have spoken to in recent times have said in their time of need, it was the PNP who offered them support after being kicked around by their own party led by Andrew.

I never thought the resentment for this man was so great even within the JLP itself. The senator resignation was pointed to as another of the signs of is underhanded approach and many therefore do NOT trust him.

I am told that Holness will not only never become Prime Minister in this country, but will have  hard time retaining his current seat, in fact I am told he will lose his current seat, thus paving the way for his removal as party leader in the next election.

Where is our PM, is she back from vacation ?

Last week Wednesday, we all say a news release suggesting the our most beloved Prime Minister was taking vacation and that Mr Robert “Gets nothing done” Pickersgill was going to be in charge of the government.

Its Tuesday, July 28, 2015 and the country has not heard ( at least I have not) if the Prime Minister is back from vacation and once again “in charge” of the government.

Despite all the murder and mayhem bedeviling the country, our Prime Minister has not yet seen it fit to address the nation of what her government will be doing to put an end to the murderous rampage by marauding  gunmen.

When will the Prime Minister see it fit to address her “subjects”?

I guess we will hear a lot from her the sooner it gets to the next election.

I guess the people are happy because the PNP has surged upwards by 7% points and not seems set to win the next General election on the back of what must be a good performance

That much talked about US$2B loan, was it a good deal for Jamaica ?

I have allowed all the  analyst (independent and political) as well as political commentators, news writers etc to say their piece before I commented. I will tell you this, I was asked by a few readers via email to comment on the deal as they anxiously await what I have to say on this one, which has been given thumbs up by the IMF and most economics and financial analysis.

Background

The Jamaica government is seeking to buy back US$3B of Petrocaribe debt at a steep discount of 50%, meaning instead of paying back US$3B, the GOJ would payback just US$1.5B if they chose to take up this offer.

No doubt this would be a very good deal, but it means us being very responsible in how we choose to undertake this buy back.

Had the government of Jamaica taken a loan for just the amount for which the Petrocaribe deal was worth, it would have reduced Jamaica’s debt to GDP by just about 8.81%, but due to the Minister apparent need to get money to finance the upcoming elections, he took an extra US$500m, thus cutting the debt to GDP ratio by 5.88%

Now this is where most analyst have been focusing, simply because this is the net effect of this entire structural adjustment program, but what is the true cost to Jamaica and was it worth in in the end

Jay’s Analysis.

Original  PC debt	$     3,000,000,000		Savings
Write off	$     1,500,000,000		$        1,500,000,000
Petrocaribe Debt	$     1,500,000,000
New Debt	$     1,350,000,000	$        650,000,000
Orginal Int Rate(PCD)	1.00%
New Ave Int	6.750%	7.875%
Duration	13	30
			Total Int Payment
Total Int Payment	$         681,406,136	$    1,046,662,377	$        1,728,068,513
Net Savings			$          (228,068,513)
Total Payment	$     2,031,406,136	$    1,696,662,377	$        3,728,068,513

The savings to be gained by purchasing for this 50% discount is US$1.5B, the total interest payments over the life of these two loans will be $1.728B

What this is saying, is that due to the interest rate at which the Minister of finance took these two loans, it will cost the country an additional US$228M (Ja $26.8b) in interest payment, if both are held to maturity.

If we should look at the current debt owed, which stands at US$3B and were this to be held for 25 yrs at 1%, which I believed was the Petrocaribe loan terms, the total interest payment over this period would have been US$391,852,088 .

Under this new arrangement which is being praised both locally and the IMF, the total interest payment on the US$2B loan, will be US$1.72B for a total payout at maturity ( interest and Principal) of US$3.728B.

Had the Minister not taken that extra $650m on which we will end up paying interest of US$1.046B, I would have said we got a good deal, but unfortunately I cannot say so at this point in time as the maths does not allow me to arrive at that position.

The Minister of Finance appeared to have hastily arrived at the position he did, for reasons only he knows and did not get the best possible loan terms.

He has also not stated why he choose to take an additional US$500M and how he plans to spend this money.

The word is a significant portion of this money will be used to help prepare for National elections and if this is true, it really would be a a tragedy, but that is not beyond the capacity of this government, who is willing to do anything to win an election.

I know some good financial analysts will suggest that we cannot compare two different projects ( loan ) with various maturing dates ( timelines) and so I have sought to address that, by looking at monthly interest payments, as shown in the table below.

Original  PC debt	$     3,000,000,000		Savings
Write off	$     1,500,000,000		$        1,500,000,000
Petrocaribe Debt	$     1,500,000,000
New Debt	$     1,350,000,000	$        650,000,000
Orginal Int Rate(PCD)	1.00%
PC Mthly Int Pay	Current debt obligation/mth		$              11,306,173
New Ave Int	6.750%	7.875%
Duration	13	30
			Total Int Payment
Mthly Int Payment	$           13,021,834	$            4,712,951	$              17,734,785
Net Change/mth			$              (6,428,612)
Total Pay/yr	$         156,262,008	$          56,555,412	$            (77,143,344)

As we see, this new arrangement increases of debt obligation by a whopping US$6.428M per month or Ja$ 755m per mth. 

On an annual basis our debt obligation now becomes a whopping US$77.143m per year or Ja$9.06b per annum.

Summary

This new US$2B deal will cut our Debt/GDP ratio by around 5.88% in one swoop, but in the end it will add over US$228B  or JA$26B to the national debt in interest payment alone, over the life of both loans.

In context of the IMF deal, it is good

In terms of the country, very bad deal.

What this goes to show is to CANNOT focus on a single metric ie a single factor, as we can see in this case , our Debt/GDP ratio will get lower, but that comes at a US$228M cost to the country over the next 15 -30 years.

The above shows the danger or focusing on these numbers and how it can allow people to not seek out the best possible deal to dig ourselves out of trouble

Petrocaribe offered us a great deal and yet we managed to screwed it up royally by not seeking better loan rates.

Something Sinister has occurred in West Kingston and here is why ?

The recent killing of a policeman attached to the Denham town police station has raised a number of troubling  questions both of the Commissioner himself and of those senior officers stationed in that area.

When the female constabale Crystal Thomas was killed, the report from the police was very clear, it clearly and in a detailed manner outlined exactly what happen, where it happen, how it happened and what occurred after that tragic incident.

In this case, I have seen no less than 4 reports, all very different, none very clear on what happened, how it happened, the circumstances leading in up to what happened and what happened after the incident.

Let’s contrast both cases.

	Crystal Thomas	Lynden Barret
1	Clear outline of what happened , where it happened, how it happened , the circumstances leading to how it happened	No clear outline where it happened, how it happened nor the circumstances leading up to how it happened
2	Gun was taken by criminals	Gun not taken by prepetrators
3	Occurred about 9pm	Occurred about 8pm , 1 hr earlier
4	Reports of how many bullet wounds before 24 hrs	No reports of number of bullet wounds after 60 hrs
5	Suspects identified in less than 24 hrs	No suspects identified after almost 60 hrs
	Constable fiream was taken by criminals ( usual modus operandi)	Constable fiream was not was taken by criminals (unusual modus operandi, always taken when targeted)
6	Constable firearm  covered in less than 24 hrs	Gun was not taken
7	Suspects taken into custody in less than 24 hrs	No suspects identified after almost 60 hrs
8	Spent shell recovered from crime scene	No reports of any spent shell recovered from offiial police report
9	Body langauge of the senior cops very militant and angry	Subdued body langaued from very same cops
10	Residents provided critical information to cops to nab suspects	Same residents, refuse (according to cops) to assist in this case
11	No controversy about who killed this cops	Disputed claim about who killed this cop
12	Not necessary	There is “scientific” evidence to support the fact, this killing was not done by the police

Re : Item number 12.

This can only be possible if an autopsy has been done on the body, the slugs have been removed and sent to ballistic lab for testing and it has been confirmed that the slugs removed are not of the type issued by the police.

As far as I know, this has not yet been done and we know in Jamaica that these kind of test takes weeks and not hours so I doubt the police have any sort of refutable scientific evidence.

Let’s however assume that all what I said above was in fact done and by some miracle we have test results to suggest that the slugs found were not from standard police issue, does that really prove the policeman was not killed by a cop ?

No readers, hell no, it could mean the cop was in fact killed by the police who were not using the standard issued firearm that was supplied by the JCF

This would therefore raise another set of even more troubling questions (

1. Why would the police have a different weapon from that supplied by the police  force
2. Why would the police have different set of bullets that that supplied by the police force
3. Why would the police open fire on him, did they mistake him for a gunman?
4. What reason would they have to think he was a gunman, did he have a exposed firearm.
5. What would cause the cop not to use his government issued firearm to do this particular shooting
6. Was this intentional. If not why would you use a none issue firearm unless it is to conceal something?
7. Was this killing a setup, was it premeditated or a case of mistaken identify. Even so, the action to use a non-issued firearm and or bullets could not have been an error it would have had to be a deliberate choice. In this case why ?
8. This would mean the presence of illegal firearm as well as bullets in the possession of the police.

The longer the Commissioner takes to clear the air on this the faster his goodwill would have diminished and he would be seen like all the other COP, cover up from your men and put up straw-men, who will ultimately be taken out having been wrongly accused of a criminal event, while those truly responsible are allowed to get away with it.

Something just does not seem right, feel right about this case and I am now wondering about the Commissioner of police capacity to get this one right.

Dr Williams your officers are working overtime to suggest they are not responsible and less time to find who they believe are responsible

DO NOT ALLOW YOURSELF TO BE HOODWINKED !!

Dr Williams, you have less than 24 hrs to regain the trust of the people of Jamaica, do not waste it.

Bless

Suspect(Triggerman) implicated in woman constable killing is dead ?

Commonsenseja understands that the apparent trigger man who was implicated in the killing of woman Constable Crystal Thomas is reported to have died at hospital.

The circumstances surrounding his death are unclear, but we understand that he became ill while in police custody and was taken to the hospital were he died while undergoing treatment.

The major news outlets  need to get an official statement from the communication arm of the police. The should also ask the CCN to indicate how the gun from the cop was retrieved or was in brought to the station by a certain individual.