After what has been the slowest of slow-motion train wrecks, Puerto Rico’s federal overseers have finally taken the inevitable first step toward considering the use of bankruptcy-ish proceedings, known as Title III, to allow the island to escape it's $70 billion debt burden.
The last 5 days have seen the biggest crash in Puerto Rico muni bonds since June 2015 when the Governor declared debts "unpayable." As Bloomberg notes, investor speculation about the scale of the losses Puerto Rico will foist on bondholders caused the price of the island’s most active bond to continue to slide in the heaviest trading in nearly four months.
Puerto Rico bonds are in the midst of the biggest three-day rout since April 2016, when island officials advanced a moratorium bill that paved the way for the first default on its general-obligation debt.
The recent blow-up of the Dallas Police and Fire Pension System was entirely predictable. The combination of overpriced financial markets, inadequate contributions and overly generous pension promises mean dozens of US local and state government pension plans will end up in the same situation.
“At various points…he said he carried out the attack because of government mind control,” prosecutor Ricardo Del Toro said. “But he later said he did so because of [ISIS]…after participating in jihadi chat roms.”