Wha do Chuck Schumer, Rand Paul, and Nancy Pelosi all have in common? Hint: grab your wallets.
America celebrates the July 4 th holiday under the threat of homegrown terrorism while global financial markets face a trifecta of threats from Greece, Puerto Rico and China. And those are just the immediate threats - the world still...Show More Summary
Pain, but not on remotely the same scale.
“….Look at Puerto Rico.” [Nick Timiraos and Ana Campoy, W$J via @greg_ip] Similarly: Coyote takes issue with Paul Krugman. More on Puerto Rico’s woes: Anne Krueger et al via Tyler Cowen, Max Ehrenfreund/WP, earlier on protectionist, cost-raising Jones Act here, and more. Show More Summary
So how big of a deal is the Triad of Turmoil unfolding in Greece, China and Puerto Rico? Thus far, general contagion has been minimal.
Since several commentators have raised questions about the similarities between the debt situations of Greece and Puerto Rico, it is worth pointing out some important ways in which they differ. Puerto Rico gets the benefit of several important federal government programs which will continue regardless of the finances of its own government. Show More Summary
(July 3, 2015 02:22 PM, by Scott Sumner) The answer is probably yes (and the scare quotes head off complaints that big impersonal governments don't actually have human feelings.) The administration has clearly been upset that the Eurozone isn't doing more to help Greece. They complain that a... (0 COMMENTS)
Puerto Rico just signaled that it will file for Chapter 9 protection. They just hired former Detroit judge Steven Rhodes to assist them with this. This is the same tactic
Ricardo Mangual / (CC BY 2.0) As Puerto Rico begins to ration water, close schools and lose its healthcare system under the weight of a $73 billion debt, tens of thousands of its inhabitants are fleeing to the United States, where prospects...Show More Summary
Its economy has been shrinking for years, its debts have been piling up for even longer, and its government has finally admitted that even brutal tax hikes and spending cuts wouldn't be enough for it to pay back everything it owes. I'm talking, of course, about Puerto Rico. Its governor, Alejandro García Padilla, admitted to the […]
With Greece and Puerto Rico on the brink of bankruptcy, stock market volatility has returned. Even US Treasury bonds have sold off with the 10-year yield moving from 2% to 2.4% due to a strengthening labor market and signs of inflationary pressure on the horizon. Due to such headwinds, it’s getting incredibly difficult to make Read More...
From Max Ehrenfreund: …because of an obscure law known as the Jones Act, which bans foreign vessels from shipping goods between U.S. ports, businesses in Puerto Rico have to use the U.S. merchant marine to import anything. They can’t just hire whatever boats and crew are available, which makes shipping even more expensive. The cost […]
As we prepare for the Fourth of July holiday, all eyes are on Greece and Puerto Rico. While the situation in Greece is still changing hour to hour, it appears that Greece could still default on its debt which could in turn cause a ripple effect of “contagion” to other nations. Show More Summary
Two financial crises at the ‘sub federal’ are currently taking place – one in the Commonwealth of Puerto Rico, and the second one in Greece. This column highlights some surprising similarities between them, as well as the main differences. Show More Summary
Greece; Puerto Rico; Currency market rigging; Yelp sale; "Leopard mauls guide’s arm during safari tour"; and more.
On Monday, I highlighted the fiscal crisis in Puerto Rico. The island’s governor announced that it cannot fully pay back its $70 billion in outstanding debt. Much of the attention this week has focused on how Puerto Rico has mismanaged its finances. Show More Summary
Hum de hum hum. Greece is in trouble. Puerto Rico too. And don't forget China: Chinese shares plunged Thursday, even as Beijing grasps for solutions to stem the selling, including relaxing rules on the use of borrowed funds to invest in stocks....The Shanghai Composite closed down 3.5% while the smaller Shenzhen market was down 5.6%. Show More Summary
Danger and opportunity.
As Puerto Rico begins grappling with the steps that Gov. Alejandro García Padilla says are necessary for saving it from financial ruin, including cutting spending and stopping repayments on its huge debt as it is currently structured,...Show More Summary
Bloomberg It’s been a wild, holiday-shortened week in which Greek and Puerto Rican debt issues mixed with a tumbling Chinese stock market to stoke a bout of market volatility. Bank of America Merrill Lynch’s chief investment strategist, Michael Hartnett, is convinced that none of the above will lead to “black swan” events that trigger staggering [...]