It's almost game over for Puerto Rico. The commonwealth is racing to restructure some $72 billion in debt and next week, Padilla will need to decide between a partial default on a $354 million bond payment and ensuring that the government can continue to provide basic services.
As Puerto Rico stares down a $355 million bond payment due in less than two weeks, analysts warn that without federal intervention, the commonwealth could face growing social unrest and a prolonged depression.
Global policymakers have gone to incredible measures to stabilize market, financial and economic backdrops. Yet reflationary measures will continue to only further destabilize. When policy-induced “risk on” is overpowering global securities markets, fragilities remain well concealed. Fragilities, however, swiftly manifest with the reappearance of “risk off.” Rather quickly securities markets demonstrate their proclivity for illiquidity and so-called “flash crashes.” So after an unsettled week in global markets, the critical issue is whether “risk on” is giving way to “risk off” dynamics.
Angered that Facebook, Google, Amazon, etc. pay very little tax, an entire town in Wales decided to employ the exact same tax strategies used by big companies to reduce their own tax burdens. As the proprietor of the local smokery put it, the plan is "jolly clever." Doing this is not immoral or unpatriotic.
- Stock futures little changed as Yellen comments awaited (Reuters)
- Draghi stimulus hint underpins stocks, knocks euro (Reuters)
- Black Friday's Losing Its Mojo and Retailers Might Be Relieved (BBG)
- Macy’s Fights Downward Spiral With Bet on Off-Price Backstage Stores (WSJ)
- Greece Comes to a Standstill as Unions Turn Against Tsipras (BBG)
- Euro zone production falls more than expected in September (Reuters)
- Valeant played a key role in building, operating Philidor RX (Reuters)
"An upcoming election has highlighted the deep disagreement between native Hawaiians over what the future should look like. For some, it's formal recognition of their community and a changed relationship within the US. Others want to leave the US entirely - or more accurately, want the US to leave Hawai'i."
Bring On 'Operation Switch' - Bill Gross Calls For A Reverse 'Operation Twist' To "Benefit Savers And The Economy"Submitted by Tyler Durden on 11/03/2015 08:49 -0500
"But they won’t, you know. Yellen and Draghi believe in the Taylor model and the Phillips curve. Gresham’s law will be found in the history books, but his corollary has little chance of making it into future economic textbooks. The result will likely be a continued imbalance between savings and investment, a yield curve too flat to support historic business models, and an anemic 1-2% rate of real economic growth in even the most robust developed countries."
JP Morgan & Morgan Stanley Have Their CEOs on the Board of the NY Fed: Regulatory Capture & How to Neutralize ItSubmitted by Reggie Middleton on 11/03/2015 08:38 -0500
Is having the CEOs of two of the largest, most powerful banks sit on the board of their own regulator literally worse than putting a fox in charge of the hen house? Here's why the name "Morgan" get's you a regulator board seat and what regular people can do about it.
10-year Puerto Rico general obligation bond yields spiked to 12.3% - the highest on record - as the island’s Government Development Bank's $354 million of principal and interest due on December 1st looms. Puerto Rico is now 450bps 'riskier' than Greece, which means Treasury Secretary Jack Lew was wrong again in not taking the German FinMin's offer in July to swap Puerto Rico for Greece...
"Puerto Rico is not Greece"... but it increasingly looks like it will be in a few weeks, thanks to US taxpayers who are about to foot the bill for yet another creditor bailout.
- ECB Haunted by Paradox as Draghi Weighs Risk of QE Signaling (BBG)
- At odds with Republicans, Hillary Clinton to testify on Benghazi (Reuters)
- House tees up conservative plans to raise debt limit (Hill)
- U.S., Russia to Meet at Syria Conference to Discuss Crisis (WSJ)
- Putin Gains Record Support Among Russians Over Syria, Poll Shows (BBG)
- China Plans 2020 Deadline for Dismantling Capital Controls (BBG)
- Nyrstar Drops the Most on Record as Mining Hit by Metal Rout (BBG)
America is not Greece, but judging from the Obama administration's just-unveiled plans to bailout Puerto Rico's disastrous debt situation, the American territory may have to sacrifice a little more sovereignty to get some relief. Obama is pressing for Congress to give Puerto Rico (PR) sweeping powers to reduce its $73 billion debt burden through a form of bankruptcy protection not now available to American territories and will also ask lawmakers to establish an independent body to monitor the island’s fiscal affairs (a la Troika).
- China economic growth seen slowing despite policy easing (Reuters)
- FBI, Justice Department Investigating Daily Fantasy Sports Business Model (WSJ)
- Obama to slow pace of withdrawal of U.S. troops from Afghanistan (Reuters)
- Corporate America's Epic Debt Binge Leaves $119 Billion Hangover (BBG)
- Islamic State battles insurgents as Syria army prepares assault (Reuters)
- Why Hillary Clinton Can’t Win by Going After the NRA (BBG)
"As you know, the environment for global macro fundamentals-based trading continues to be challenging. That factor, combined with the lack of certainty over when a recovery will take hold, led us to conclude that the time was right to return capital to you."
- Global Markets Rebound on Yellen Speech (WSJ)
- Obama and Putin to meet; Syria and Ukraine vie for attention (Reuters)
- Obama to host China's President Xi amid simmering tensions (Reuters)
- Don't Fall for It, Xi! Chinese Take to Web to Scorn U.S.—and China, Too (BBG)
- Yellen Confirms Fed Still on Track to Raise Rates This Year (BBG)... but is still China dependent?
- Abe's New Economic Plan Confounds Analysts (BBG)
- It's All `Perverted' Now as U.S. Swap Spreads Tumble Below Zero (BBG)