Here Comes "Prexit": Puerto Rico In "Death Spiral", Debts Are "Not Payable"

[Statistikhengst]

Could the debt crisis in Puerto Rico be the lynchpin for the US bond market? Will be interesting to see how this debt crisis evolves in the coming months now the sovereign debt crisis that has plagued Europe is a little closer to home.

As we noted last night, for a whole lot of time nothing at all can happen under the guise of "containment"... and then everything happens all at once. Because not even two full days after Greece activated the "Grexit" emergency protocol, leading to capital controls, and a frozen banking system and stock market, moments ago the NYT reported that the default wave has jumped the Atlantic and has hit Puerto Rico whose governor Alejandro García Padilla, saying he needs to pull the island out of a “death spiral,” has concluded that the commonwealth cannot pay its roughly $72 billion in debts, an admission that will probably have wide-reaching financial repercussions.

In other words, first Greece, and now Puerto Rico may be in a state of Schrodingerian default. Why the ambiguity? Because while Greece is not technically in default until July 1, Puerto Rico does not even have an option to declare outright default. But that doesn't mean that the commonwealth will service it. Quoted by the NYT, García Padilla said "The debt is not payable." He added that "there is no other option. I would love to have an easier option. This is not politics, this is math.”

Funny: math went out the window in 2009 when central bank "faith" took over. The problem is that faith has run out, as has the "political capital" to keep an insolvent global system running, and first Greece now Puerto Rico are finally realizing it.

As the NYT adds, this is "a startling admission from the governor of an island of 3.6 million people, which has piled on more municipal bond debt per capita than any American state."

The immediate implication, as accurately presented by the NYT, is that Puerto Rico's call for debt relief on such a vast scale could raise borrowing costs for other local governments as investors become more wary of lending. Indicatively, Puerto Rico’s bonds have a face value roughly eight times that of Detroit’s bonds.

Here Comes Prexit Puerto Rico In Death Spiral Debts Are Not Payable Governor Refuses To Kick The Can Zero Hedge

Ahhh, Zero Hedge!!!


"The sky is falling, the sky is falling, we are all gonna die, we are all gonna die!!!"

Go back to some Hilary Clinton thread or one of your autistic threads on polling for an election 2 years away that doesn't matter. Leave the discussion on puerto rico's debt crisis to adults.

Ahhh, the butthurt sits deep with you, I see...

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Fuck off loser. Stop polluting the thread.

You seem angry. Debating and critical thought are difficult for you, eh?

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[Steinlight]

Could the debt crisis in Puerto Rico be the lynchpin for the US bond market? Will be interesting to see how this debt crisis evolves in the coming months now the sovereign debt crisis that has plagued Europe is a little closer to home.
Here Comes Prexit Puerto Rico In Death Spiral Debts Are Not Payable Governor Refuses To Kick The Can Zero Hedge

Ahhh, Zero Hedge!!!


"The sky is falling, the sky is falling, we are all gonna die, we are all gonna die!!!"

Go back to some Hilary Clinton thread or one of your autistic threads on polling for an election 2 years away that doesn't matter. Leave the discussion on puerto rico's debt crisis to adults.

Ahhh, the butthurt sits deep with you, I see...

Gesendet von meinem GT-I9515 mit Tapatalk

Fuck off loser. Stop polluting the thread.

You seem angry. Debating and critical thought are difficult for you, eh?

Gesendet von meinem GT-I9515 mit Tapatalk

You aren't debating fuckface. You are trolling.