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First Default By U.S. Commonwealth In History: Puerto Rico Fails To Make Required Debt Payment

Tyler Durden's picture




 

Over the weekend Puerto Rico was supposed to make a modest principal and interest payment of some $58 million due on Public Finance Corp. bonds, which however few expected would be satisfied. As a reminder, on Friday, Victor Suarez, the chief of staff for Governor Alejandro Garcia Padilla, said during a press conference in San Juan that the government simply does not have the money.

Moments ago Melba Acosta, president of the Government Development Bank, confirmed as much, when he announced that only $628,000 of the $58 million payment, or just about 1%, had been paid.

Below is the full statement from Acosta on the service of PFC Bonds:

Today, Government Development Bank for Puerto Rico ("GDR") President Melba Acosta Febo issued the following statement on the service of Public Finance Corporation (PFC) bonds:

 

Due to the lack of appropriated funds for this fiscal year the entirety of the PFC payment was not made today. This was a decision that reflects the serious concerns about the Commonwealth's liquidity in combination with the balance of obligations to our creditors and the equally important obligations to the people of Puerto Rico to ensure the essential services they deserve are maintained.

 

"PFC did make a partial payment of Interest in respect of its outstanding bonds. The partial payment was made from funds remaining from prior legislative appropriations in respect of the outstanding promissory notes securing the PFC bonds. In accordance with the terms of these bonds, which stipulate that these obligations are payable solely from funds specifically appropriated by the Legislature, PFC applied these funds—totaling approximately $628.000—to the August 1 payment."

WSJ adds that the payment to bondholders is the first skipped since Governor Alejandro Garcia Padilla in June said the island’s debts were unsustainable and urged negotiations with creditors in an effort to restructure about $72 billion. "Still, analysts said it isn’t likely to provoke an acute market wide reaction from investors, many of whom have been inching away for the commonwealth for years."

Except for those hedge funds who haven't, and have been BTFD in hopes of another bailout of course.

And confirming that making just 1% of the contractual payment is not the same as making 100% of it, moments ago Moody's confirmed what most had already known:

  • MOODY'S VIEWS PUERTO RICO IN DEFAULT

More via CNBC:

"Moody's views this event as a default," Emily Raimes, vice president at Moody's Investors Service, said in a statement, adding that payment of "debt service on these bonds is subject to appropriation, and the lack of appropriation means there is not a legal requirement to pay the debt, nor any legal recourse for bondholders.

 

"This event is consistent with our belief that Puerto Rico does not have the resources to make all of its forthcoming debt payments. This is a first in what we believe will be broad defaults on commonwealth debt," she added.

In other words, small or not, PR has failed a mandatory principal repayment and is now in default under the PFC bonds. Up next, as per Bloomberg's preview "the default promises to escalate the debt crisis racking the island, where officials are pushing for what may be the biggest restructuring ever in the municipal market."

“An event like this is significant enough that it could hurt prices for Puerto Rico bonds,” said Richard Larkin, director of credit analysis at Herbert J Sims & Co. in Boca Raton, Florida. “I can’t believe a default on debt with Puerto Rico’s name will go unnoticed.”

It is unclear if creditors will now threaten the commonwealth with a "temporary" expulsion from the dollarzone as part of their hardball negotiating tactics. Nor is it clear if Schauble is still willing to trade Puerto Rico for Greece.

What is clear is that the first default by a US commonwealth is now in the history books.

 

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Mon, 08/03/2015 - 15:59 | 6386356 The Delicate Genius
The Delicate Genius's picture

Independence for Puerto Rico now!!!

Mon, 08/03/2015 - 16:18 | 6386494 Rainman
Rainman's picture

sorry.Somebodies musta looted all the wealth out of that commonwealth

Mon, 08/03/2015 - 16:20 | 6386505 remain calm
remain calm's picture

I will give you one guess, and a hint, the initials are GS

Mon, 08/03/2015 - 16:23 | 6386523 negative rates
negative rates's picture

well I guess something is better than nothing.

Mon, 08/03/2015 - 16:25 | 6386534 markmotive
Mon, 08/03/2015 - 16:28 | 6386548 Mountainview
Mountainview's picture

In comparison to Greece, nobody holds his breath!

Mon, 08/03/2015 - 16:30 | 6386560 halfasleep
halfasleep's picture

"and the equally important obligations to the people of Puerto Rico to ensure the essential services they deserve are maintained."

 

Deserve.. You Keep Using That Word, I Do Not Think It Means What You Think It Means.

Mon, 08/03/2015 - 16:34 | 6386594 Soul Glow
Soul Glow's picture

“An event like this is significant enough that it could hurt prices for Puerto Rico bonds,”

COULD hurt?  lolz.  More like WILL hurt.

Mon, 08/03/2015 - 16:54 | 6386698 Four chan
Four chan's picture

all those pr welfare scammers and their 20 kids finally sunk the island.

Mon, 08/03/2015 - 16:59 | 6386723 max2205
max2205's picture

We defaulted on some folks 

Mon, 08/03/2015 - 17:05 | 6386750 Perseus son of Zeus
Perseus son of Zeus's picture

What they say? 100 out of 10 Ricans are on the US welfare dole?

Hey Ricans. Cuban's are US friendly now. We DON'T fucking need you anymore.

Mon, 08/03/2015 - 17:05 | 6386765 NoDebt
NoDebt's picture

Throw those worthless Puerto Ricans out of the Union!

(Couldn't help myself)

Mon, 08/03/2015 - 17:07 | 6386771 Manthong
Manthong's picture

NBFD,… Buffett will buy the whole joint..
and Rosey Roads will be his new private airstrip-.

 

Mon, 08/03/2015 - 17:40 | 6386896 Save_America1st
Save_America1st's picture

P.R. is Florida's "Mexico".  Next thing you know, obama is going to be shipping the population of the whole fucking island into Florida. 

 

That oughta push FL into about 75% full blue libtard forever.  Kiss FL goodbye.  This will be another invasion of our borders and a massive infusion of millions of FSA soldiers to fuck shit up and to vote against the Constitution and our rights.

And if we don't like it then obviously we're just a bunch of Confederate flag waving racists, of course. 

There aren't too many places safe anymore from these treasonous cockroaches and their foot soldiers. 

Mon, 08/03/2015 - 17:48 | 6386923 willwork4food
willwork4food's picture

I happened to Catch Pedro Pierluisi (US Congressman PR) a month ago on CNBC with him spouting off shit like "This is all ridiculous talk, PR will NEVER default!!"

Piece of bought & paid for congresss shit should be gutted then hung out for the vultures.

Mon, 08/03/2015 - 19:14 | 6387210 knukles
knukles's picture

PFC, Puerto Rico Froed Chicken didn't get paid?
Oh cheeeit, mank!  Da essss velly velly batd.  I steeek you.

Mon, 08/03/2015 - 19:17 | 6387221 Handful of Dust
Handful of Dust's picture

I think NYC is 50% Puerto Rican and 50% Haitian. However, the PR chics are hot.

Mon, 08/03/2015 - 19:38 | 6387247 Manthong
Manthong's picture

bought & paid for congresss shit should be.....

 

Ok.. so how do we put the team together and who has the sharpest blades?

.. just a joke ..

PR ...what a lovely island.. land of tropical breezes  and the money owing.. and the hurricanes blowing  

Smoke on your pipe and put that in.

https://www.youtube.com/watch?v=Qy6wo2wpT2k


But a little OT, now but interesting.

It’s 40C in Qatar now as the political turkey’s are debating stuff and roasting.. as well as all of the press and their electronics.

 

Mon, 08/03/2015 - 19:40 | 6387283 Bunghole
Bunghole's picture

However, the PR chics are hot.

Pics or it didnt happen.

Can I find these hotties on porntube?

Mon, 08/03/2015 - 18:09 | 6386990 Antifaschistische
Antifaschistische's picture

Larry Ellison has a thing for islands...why doesn't he put another $30 Billion on his Oracle Credit Card (thank you FED/ZIRP) and buy himself a Carribean island..PR's got some nice beaches.  

Mon, 08/03/2015 - 18:40 | 6387087 sun tzu
sun tzu's picture

Vieques or Culebra is enough. The mainland has too many PR's infesting the place. He could probably buy both of those islands for less than $1 billion

Mon, 08/03/2015 - 20:30 | 6387465 knukles
knukles's picture

Irony of it all:  PR has too many PR's infesting (akin to bedbugs) the place.

I gotta tell y'all.  I had biz in PR with a few of the "gov't" "agencies" for a while and all it took was a few visits where we traveled about as opposed to just staying in the hotel/meeting/dinner/hotel/flight home routine and meeting quite a number of "civic leaders" to come to a very, very deep conviction that investing in PR is not a good idea.

                                      Dere's sumptink wrong, Luchi!

Tue, 08/04/2015 - 09:57 | 6389090 mtl4
mtl4's picture

When is Paul Singer going to buy the bonds and start trying to sue them in NYC courts?!..........he needs to make up ground after Argetina gave him a bit of a beating in default.

Mon, 08/03/2015 - 17:50 | 6386930 SWRichmond
SWRichmond's picture

All I want to know is what does ISDA  say about this?

Mon, 08/03/2015 - 19:28 | 6387256 Temporalist
Temporalist's picture

"CDS?  Never heard of 'em." -ISDA

Mon, 08/03/2015 - 18:38 | 6387084 Montani Semper ...
Montani Semper Liberi's picture

Looks like Sharks vs Jets all over again.

Mon, 08/03/2015 - 17:06 | 6386767 Bumpo
Bumpo's picture

Good luck covering your expenses next month, Chica

Mon, 08/03/2015 - 18:50 | 6387121 Miffed Microbio...
Miffed Microbiologist's picture

Cue Obama proposing making Puerto Rico a State to solve this problem.

Miffed

Mon, 08/03/2015 - 19:18 | 6387225 Tall Tom
Tall Tom's picture

The 58th State?

Mon, 08/03/2015 - 19:41 | 6387285 Bunghole
Bunghole's picture

Just what we need.

Mon, 08/03/2015 - 19:56 | 6387331 Big Brother
Big Brother's picture

I don't know... that's a BIG hunk of dead wood floating out there.

Mon, 08/03/2015 - 19:46 | 6387296 Buck Johnson
Buck Johnson's picture

Exactly.

 

Mon, 08/03/2015 - 22:12 | 6387859 TeMpTeK
TeMpTeK's picture

Yo no soy mas dinero

Tue, 08/04/2015 - 11:58 | 6389692 UggSmash
UggSmash's picture

I also had a difficult time swallowing the word "deserve". I sure wish reporters and other media people would stop using loaded words like this. "Aww, the poor citizens don't get their entitlement to their natural right of existence, regardless of the degree of effort or planning they put toward the preservation of their own lives" or some such blatant nonsense (which is apparently missed by most people). 

Mon, 08/03/2015 - 16:34 | 6386587 Soul Glow
Soul Glow's picture

Greece was down 16% today.  That is a market crash.

Mon, 08/03/2015 - 16:55 | 6386707 Bunga Bunga
Bunga Bunga's picture

But but but off the lows (-23%).

Mon, 08/03/2015 - 17:10 | 6386789 EscapeKey
EscapeKey's picture

buying opportunity

Mon, 08/03/2015 - 18:26 | 6387047 tdag
tdag's picture

up 7% from the low...that's not a crash, it's a recovery! buy buy buy!

Mon, 08/03/2015 - 17:27 | 6386851 Occams_Chainsaw
Occams_Chainsaw's picture

Going Puerto Grico.....

Tue, 08/04/2015 - 00:30 | 6388269 TheRideNeverEnds
TheRideNeverEnds's picture

What I don't get is how they skipped straight past arrears and into default.  

 

At least greek only went into arrears, I don't think I ever saw the greeks go into default.  

 

This may be more serious than initially anticipated.

Mon, 08/03/2015 - 16:28 | 6386551 Haus-Targaryen
Haus-Targaryen's picture

Good for PR.  

Lets see what this does to Munis across the 50.   

Mon, 08/03/2015 - 17:02 | 6386744 Carpenter1
Carpenter1's picture

Yep, this sends the message that the days of back door bail outs are over. First, with many more to come....soon

Mon, 08/03/2015 - 19:45 | 6387291 Bunghole
Bunghole's picture

The teacher union pension funds are shitting their pants.

Bail out from Obammy in 3...2...1...

Mon, 08/03/2015 - 16:34 | 6386558 RafterManFMJ
RafterManFMJ's picture

Default?

Hold your horses, vaquero; it's only a default when the central banks *say* it's a default.  This is probably a temporal credit anomaly which is *nothing* like a default. So it's all good.

Mon, 08/03/2015 - 16:48 | 6386671 Mr. Bones
Mr. Bones's picture

I believe the preferred nomenclature is "indefinitely in arrears."

Mon, 08/03/2015 - 17:11 | 6386792 EscapeKey
EscapeKey's picture

they've "bundled" the payments - all payment up to and including 31st of Dec, 2063 have all been "bundled" into one payment.

no default.

Mon, 08/03/2015 - 19:19 | 6387229 Temporalist
Temporalist's picture

The new normal phrase is - indefinitely deferred non-payment.

Mon, 08/03/2015 - 19:21 | 6387234 Farqued Up
Farqued Up's picture

Will be magically converted to Zero Coupon. Now we know why they were excusing gringos from US taxes if they would move there. Well, grand idea but only about 20 years too late. Make the pharmas, the TAX FREE pharmas, pony up, they reneged on the Caribbean Basis Initiative's IRS 936 program. Hail to the FDA bootlicks and the IRS sychophants!

We are soooo fucked.

Mon, 08/03/2015 - 19:30 | 6387260 Antifaschistische
Antifaschistische's picture

exactly!!  Perhaps the IMF will declare them in arrears.   Kiss our arrears goodbye bankers..

I still laugh at the mere thought, of the absurdity, of any entity with a collective IQ in excess of 40, loaning billions of dollars to Puerto Rico.

Mon, 08/03/2015 - 21:28 | 6387533 RaceToTheBottom
RaceToTheBottom's picture

They be playing for the bailout, man.

Rumor has it Steve Lies-man was the advisor.

Mon, 08/03/2015 - 16:23 | 6386524 Headbanger
Headbanger's picture

Ya think we can sell it back to Spain now?

Mon, 08/03/2015 - 16:31 | 6386572 Black Forest
Black Forest's picture

Don't you dare. They use Maria for an excuse to start World War III.

https://www.youtube.com/watch?v=Qy6wo2wpT2k

0:40

 

Mon, 08/03/2015 - 18:40 | 6387088 Nobody For President
Nobody For President's picture

God, Rita Moreno was something else...

Mon, 08/03/2015 - 17:02 | 6386743 Larry Dallas
Larry Dallas's picture

Wait a minute. Aren't these Moral Obligation Bonds? Meaning not:

1. REvenue bonds

2. General Obligation Bonds

but the bottom of the heap Moral Obligation bonds?

Mon, 08/03/2015 - 18:33 | 6387065 Cadavre
Cadavre's picture

I will give you one guess, and a hint, the initials are GS

Absolutely jesus titty fucking christ right!

There always seems to be a Goldman Turd that will never flush without the plumber for the self anoints setting another alchemist lab that turns blood to gold... 4-x

June 2011: Puerto Rico selects the abertis/Goldman Sachs consortium as preferred bidder for a toll road concession 

The Puerto Rican government has selected the consortium headed by abertis and the investment fund Goldman Sachs Infrastructure Partners II as the preferred bidder to manage the PR-22 and PR-5 toll roads. The consortium, which will manage both toll roads for a 40-year period, will invest a concession fee of US $1,080Mn (€762Mn).

The contract will be carried out through a consortium formed by abertis (45%) and investment fund Goldman Sachs Infrastructure Partners II (55%). Approximately 40% will be funded through capital contributions by the partners, with the remaining 60% financed with long-term debt. The consortium, which will manage both toll roads through a jointly-owned company, Autopistas Metropolitanas de Puerto Rico LLC (Metropistas), has already secured a firm financing offer from a group of 12 banks.

The contract closing is expected to be finalized in late September, following completion of the bid process.

and on and on and on and on ... infinity.

Libya, Greece, US, and probably everybody else suffering the misfortune of narcissistic ignorance that allowed their government employees to visit the K-Street Kiddie Brothels, with GS discount coupons, meaning anybody doing business with the WZO (Yiddish for "London Shadow Bankers").

And how come long bond efts don't look like the expected mirrored reflection of a matched short bond etf?

Mon, 08/03/2015 - 19:36 | 6387273 Sofa King
Sofa King's picture

Probably the Govenor who went on vacation as the commonwealth defaulted.

Does it strike anyone as odd that they really don't care that they defaulted?

Mon, 08/03/2015 - 16:18 | 6386495 CrazyCooter
CrazyCooter's picture

Default? Only if ISDA says so!

Regards,

Cooter

Mon, 08/03/2015 - 16:54 | 6386693 fockewulf190
fockewulf190's picture

So, who has taken out some derivatives on PR debt and is looking for the fat multi-billion dollar paycheck?  Probably someone who is "richer than you" perhaps?  Good thing the FDIC is on the hook (they´ll be wiped out  by Thursday).

Mon, 08/03/2015 - 16:28 | 6386554 Tallest Skil
Tallest Skil's picture

If they had been made a state in the 1920s, this never would have happened.

Mon, 08/03/2015 - 16:31 | 6386575 RafterManFMJ
RafterManFMJ's picture

And If my Uncle had a cooter, he'd be my Aunt.

Mon, 08/03/2015 - 18:14 | 6387016 ThroxxOfVron
ThroxxOfVron's picture

"And If my Uncle had a cooter, he'd be my Aunt. "

 

LULZILICIOUS!

Mon, 08/03/2015 - 19:15 | 6387214 LibertarianMenace
LibertarianMenace's picture

This looks like a job for Commandante Pachuco.

Mon, 08/03/2015 - 16:30 | 6386566 Luck Dragon
Luck Dragon's picture
The Fall of Puerto Rico. Prepare Yourself Accordingly. - https://youtu.be/k4iuD7xQDxE
Mon, 08/03/2015 - 17:13 | 6386795 EscapeKey
EscapeKey's picture

nothing will happen. behind the scenes, this will be papered over, ensuring an even bigger crash somewhere down the line.

Mon, 08/03/2015 - 19:54 | 6387323 Bunghole
Bunghole's picture

Kick the can is a monthly event in the USSA.

Mon, 08/03/2015 - 16:54 | 6386690 smokintoad
smokintoad's picture

PRexit?

Mon, 08/03/2015 - 17:32 | 6386868 doctor10
doctor10's picture

"strategic" -yeah -that's the ticket...why couldnta I thunka dat...

 

what'll they call when the whole whole USA does a Greece at 2.25%?--prolly "Putin's Fault"

Mon, 08/03/2015 - 17:50 | 6386929 Banker Buster
Banker Buster's picture

The greece playbook

As the Bond holders walk into the Pentagon to meet with the military to see what they can do about this default, they call Puerto Grico and say "ok ok ok, no problem here at all, I see you didn't make a payment but no need to worry we are all friends and I'm sure it was a mistake.  I tell you what I'll extend the payment deadline by one week my dear friend.  Have a great day, bye now."

Then said bond holders ask the military, "ok we have one week to figure out how we can take over Puerto Grico and make them pay dearly, they think we are friends...LOLZ"

The End.

Mon, 08/03/2015 - 18:05 | 6386983 orez65
orez65's picture

Independence Day for Puerto Rico, YES!!!!!

Stop their freeloading on US Taxpayers.

What do you have to show for the $72 BILLION THAT YOU OWE!!!

Mon, 08/03/2015 - 18:23 | 6387043 I-am-not-one-of-them
I-am-not-one-of-them's picture

freeloading?

 

the US is raping Puerto Rico

 

leave now and Puerto Rico will prosper when the parasites are gone

Mon, 08/03/2015 - 20:52 | 6387550 RaceToTheBottom
RaceToTheBottom's picture

Right, bailout via statehood.

It's for the children.....

Mon, 08/03/2015 - 18:09 | 6386991 Semi-employed W...
Semi-employed White Guy's picture

This wouldn't mean a damned thing to the US except that the piece of shit progressive Teddy Roosevelt "won" that island for us.  Now Central Florida is going to be flooded with still more of them as if we don't have enough already!  Does anyone know where Teddy is buried? I'd like to piss on his grave.

Mon, 08/03/2015 - 18:46 | 6387107 Nobody For President
Mon, 08/03/2015 - 19:29 | 6387258 Farqued Up
Farqued Up's picture

I heard Jimmy Margaritaville already cut another version of "They all got cousins in Manhattan". Miami has the cousins to the other 1,000 Carib Islands, mon.

Mon, 08/03/2015 - 18:28 | 6387051 nosoeawe
nosoeawe's picture

By Puerto Rico, are they referring to the island or NYC? 

Mon, 08/03/2015 - 18:47 | 6387108 sun tzu
sun tzu's picture

They don't want it. 

Mon, 08/03/2015 - 18:47 | 6387113 The central planners
The central planners's picture

They call the island commonwealth it should be called commondebt or commonbroke.

Mon, 08/03/2015 - 19:16 | 6387218 indygo55
indygo55's picture

Been to both. Greece is WAY better than Puerto Rico.

Mon, 08/03/2015 - 16:00 | 6386362 JustObserving
JustObserving's picture

Maybe it is hoping that 99% of the principal is written off.  Greece needs such a deal.  As do US unemployed students with high student debt

Mon, 08/03/2015 - 16:01 | 6386374 NoVa
NoVa's picture

PR has put a new spin on the "99%ers"

 

NoVa

Mon, 08/03/2015 - 19:23 | 6387243 LibertarianMenace
LibertarianMenace's picture

Shit, the whole global system needs to be written down. The proggie experiments to keep castles in the air have failed. Time to write the whole thing off and move on. But that would impair the trillionaires' ledgers, and they do so like to be trillionaires.

Mon, 08/03/2015 - 19:35 | 6387271 Farqued Up
Farqued Up's picture

Hey, PR, just give them the deed to that big satellite dish at Arecibo, call it even, throw in Jodie Foster and SETI to boot.

Mon, 08/03/2015 - 16:01 | 6386376 clade7
clade7's picture

Hey!  It works!  Lets all try that shit!  Gas is 2.6c/gallon!  And i'm living in my house for about $12/month!

Mon, 08/03/2015 - 16:03 | 6386382 Tinky
Tinky's picture

[Scene: married couple on winter holiday in a small, charming chalet in the mountains, after several straight years of record snowfall]

Wife: "Honey, what was that sound?"

Hubby: "Just some thunder. Pour me another glass of wine, will you please?"

Mon, 08/03/2015 - 16:09 | 6386432 Anglo Hondo
Anglo Hondo's picture

+100 for Hubby having someone to pour his wine.

Mon, 08/03/2015 - 22:30 | 6387922 monad
Mon, 08/03/2015 - 16:03 | 6386391 Karlus
Karlus's picture

Why even bother wasting the 1%? Is it so you can say "I paid some?"

Mon, 08/03/2015 - 16:03 | 6386394 aliki
aliki's picture

if ur dumb enough to "invest" in a "sovereign" fixed income instrument, u deserve to lose all your $$$ if/when it goes belly-up

should lose double your $$$ if you "blindly invest/contribute" to bond funds which you THINK are safe/secure YET you don't research exactly what the fuck they are allocating too. up until now, there has been extremely limited mention of default risk, rather just a lust for yield in these high yield (for a good reason) vehicles.

simply 1 more reason she can't raise rates. spreads are widening. just check the differentials between investment grade corporates & high-yield; simply can't have the world's largest commodity (oil) blow-up (and continue to blow-up) wher 35% of the high-yield issuance the last 5-7 years was in energy and NOT have bodies floating in the water.

Mon, 08/03/2015 - 16:16 | 6386483 Clycntct
Clycntct's picture

+- Ouch!

Mon, 08/03/2015 - 16:24 | 6386533 Professor Fate
Professor Fate's picture

"An event like this is significant enough that it COULD hurt prices for Puerto Rico bonds,” said Richard Larkin, director of credit analysis at Herbert J Sims & Co".

Obviously with such financial insight and acumen, Larken should be nominated for the "Hawking / Nash" Financial Equilibrium award.  I'd say more but I'm going to try to beat the rush to sign up for the latest Herbert J. Sims Investor Insights newsletter.

Fate the Magnificent
"Push the Button, max" 

Mon, 08/03/2015 - 17:35 | 6386875 Ward cleaver
Ward cleaver's picture

Yeah that guy is very perceptive. I wonder what Gartman's take is on this event? He probably was long 6 months ago and now is bearish. Maybe these 2 guys could get together and start a hedge fund.

Mon, 08/03/2015 - 17:39 | 6386893 tarabel
tarabel's picture

 

 

Beat me to it, but I'm surprised you didn't refer to Sims as a thimble-headed gherkin.

Mon, 08/03/2015 - 16:06 | 6386409 Kaiser Sousa
Kaiser Sousa's picture

im sure this explains the ramp of the Dow over 100 points in the last 30 minutes of trading to avoid - wait for it - another triple digit loss....

FUCK OFF.

Mon, 08/03/2015 - 16:31 | 6386574 Mountainview
Mountainview's picture

For the stockmarket: No Puerto Rico, but I see few people with Apple watches.

Mon, 08/03/2015 - 16:11 | 6386451 insanelysane
insanelysane's picture

They don't pay federal income tax but the libs think the fed gov should bail them out.  Just what we need more riders instead of rowers.

Mon, 08/03/2015 - 19:27 | 6387252 Temporalist
Temporalist's picture

But if you don't have riders you dont' need rowers...right?  I thank the Fed for my degree in circular logic.

Mon, 08/03/2015 - 20:58 | 6387572 RaceToTheBottom
RaceToTheBottom's picture

Downvoted you for using the term LIBS asking for bailouts.

WTF, where have you been?  Bailouts are for corporitistas, not slaves.  For slaves, it is called EBTs.

GS is on the phone.....

Mon, 08/03/2015 - 16:13 | 6386461 Whewt
Whewt's picture

Quick.  Someone needs to loan them some money so they can repay their debts.

Mon, 08/03/2015 - 16:28 | 6386549 negative rates
negative rates's picture

Who? Those jumping grey men on the 14th floor.

Mon, 08/03/2015 - 18:50 | 6387122 BurningFuld
BurningFuld's picture

Is 14 high enough for terminal velocity? We don't want any mistakes.

Tue, 08/04/2015 - 11:19 | 6389417 Pure Evil
Pure Evil's picture

We could hand out nail guns as they approach the window to jump.

Mon, 08/03/2015 - 18:17 | 6387023 ThroxxOfVron
ThroxxOfVron's picture

It's officially shit.

Now Central Banks can buy it!

Mon, 08/03/2015 - 20:59 | 6387577 RaceToTheBottom
RaceToTheBottom's picture

"Bad Bank" evolves to "Bad Island"....

Mon, 08/03/2015 - 16:14 | 6386472 homiegot
homiegot's picture

In other words, we aren't sending enough in taxes to you to  pay us back for the loans you took from the U.S. government.

Mon, 08/03/2015 - 16:16 | 6386482 Bush Baby
Bush Baby's picture

Ouch - 70 Billion  - hopfully the pain will be spread thin amongst the hedgies and Mutual funds.

 

Mon, 08/03/2015 - 18:53 | 6387135 The central planners
The central planners's picture

When you owe the bank $7,000 you have a problem when you owe 70,000,000.00 the bank has a problem.

Mon, 08/03/2015 - 19:08 | 6387186 ThroxxOfVron
ThroxxOfVron's picture

"When you owe the bank $7,000 you have a problem when you owe 70,000,000.00 the bank has a problem. "

 

It isn't in the bank.

It has been stuffed into the Pension Funds trying to outrun ZIRP.

When the retired school teachers, cops, teamsters, and IRS flunkies start screaming it's gonna all get shoved up the Taxpayer's ass to shut them up...

Tue, 08/04/2015 - 06:25 | 6388627 The central planners
The central planners's picture

All the shit always gets straight down to the taxpayers.

Mon, 08/03/2015 - 16:19 | 6386500 the not so migh...
the not so mighty maximiza's picture

Kick ass crazy Ricans

Mon, 08/03/2015 - 16:19 | 6386503 Grinder74
Grinder74's picture

If I make the payment for them, can I declare myself Rey de Puerto Rico?

Mon, 08/03/2015 - 16:24 | 6386535 uhb
uhb's picture

i'm sure you can get a prettier title for less

Mon, 08/03/2015 - 16:31 | 6386576 Grinder74
Grinder74's picture

How about Comandante Supremo y Señor de Protección de la hermosa isla de Puerto Rico

Mon, 08/03/2015 - 18:19 | 6387027 ThroxxOfVron
ThroxxOfVron's picture

"White Boy don't know nuthin' 'bout Conga."

Mon, 08/03/2015 - 16:38 | 6386573 Closet Boy
Closet Boy's picture

Si.

Mon, 08/03/2015 - 16:49 | 6386675 DarthVaderMentor
DarthVaderMentor's picture

Yes, until the next payment is due....then you become  "el dogpoo"

Mon, 08/03/2015 - 18:12 | 6387005 Semi-employed W...
Semi-employed White Guy's picture

No but you can call yourself Rico Suave.

Mon, 08/03/2015 - 22:46 | 6387598 RaceToTheBottom
RaceToTheBottom's picture

I don't normally defaut, but when I do, I make sure it is from an Island.....

Stay Over Leveraged my friends....

Tue, 08/04/2015 - 04:07 | 6388533 StychoKiller
StychoKiller's picture

RaceToTheBottom for the thread winning comment!!

Mon, 08/03/2015 - 16:20 | 6386508 inevitablecollapse
inevitablecollapse's picture

todos somos puertoriqquenos

Mon, 08/03/2015 - 18:55 | 6387140 The central planners
The central planners's picture

The CFR is not involved in this. BTW that patent registered.

Mon, 08/03/2015 - 16:21 | 6386514 Chuck Knoblauch
Chuck Knoblauch's picture

Put PR into the World Conservation Trust.

World Soverein Debt coming soon.

Mon, 08/03/2015 - 16:30 | 6386565 negative rates
negative rates's picture

Sweet, consequences? Bitches!

Mon, 08/03/2015 - 17:40 | 6386894 optimator
optimator's picture

Give it back to spain, retroactivly, and have all of them here go back.

Mon, 08/03/2015 - 16:23 | 6386515 kchrisc
kchrisc's picture

For Zion the roof is not falling: Zion will, on paper, lose some of their printed plunder, fiat-debt, and gain hard assets based on claims derived from those fiat-debts.

The only ones that will lose real wealth are those not close enough, connected enough, or "chosen" enough to Zion.

Liberty is a demand. Tyranny is submission..

 

The slithers will slither away, while Zion will slither in deeper.

Mon, 08/03/2015 - 16:22 | 6386518 Jack of All Trades
Jack of All Trades's picture

Time to change PR's name.

 

Puerta Dueda

Mon, 08/03/2015 - 16:23 | 6386521 youngman
youngman's picture

Come this fall and winter..there will be many many meeting in PR..cause that is when the weather is the best.....then they will get this worked out..IMF..everyone will be there..even the EU I bet

Mon, 08/03/2015 - 16:25 | 6386537 Chuck Knoblauch
Chuck Knoblauch's picture

Fun to watch the bankers play monopoly.

The monopoly board should be changed.

One deck of cards called "for the good of the earth".

Mon, 08/03/2015 - 16:25 | 6386538 3rdWorldTrillionaire
3rdWorldTrillionaire's picture

No, no, they paid some of their debt today. From CNN:  "On Monday, Puerto Rico had to make a monthly debt payment of $483 million. Puerto Rico paid all its debt due except the $58 million due to creditors of its Public Finance Corporation. The government is strategically choosing not to pay the PFC debt because the entities that own the debt, credit unions and ordinary Puerto Ricans, have little legal power to fight back in court. The other debt -- some of which is owned by Wall Street hedge funds and hence has more legal clout-- was paid on MondayPuerto Rico has the same amount of outstanding debt as New York. Yet its economy -- worth $69 billion -- is just a fraction of the Empire State's $1.2 trillion."

 

And there you have it...

Mon, 08/03/2015 - 19:20 | 6387231 Handful of Dust
Handful of Dust's picture

The Chinese already own Radio City so maybe they want to buy PR also? It's a beautiful island if they could get the crime under control; as joblessness rose, crime and drugs rose same time.

Mon, 08/03/2015 - 16:26 | 6386542 dicksburnt
dicksburnt's picture

This 70 billion is just child's play.  The monied interest of W.st will just stuff the losses onto the backs of the 401(k) holders. 

Let's be real here, they are NOT going to let something like this bring down the party.  

Mon, 08/03/2015 - 16:33 | 6386583 negative rates
negative rates's picture

Their shitting bricks in NYC about it right now, but you didn't hear that from me, NOO sir re.

Mon, 08/03/2015 - 16:46 | 6386661 Grinder74
Grinder74's picture

Their =/= they're

Mon, 08/03/2015 - 16:48 | 6386672 gatorengineer
gatorengineer's picture

20,000 dollars of debt for every rican, and the us is likely sending them another 20,000 per head in welfare annually.  this is some serious corruption, common Shitcago catch up.

Mon, 08/03/2015 - 16:27 | 6386546 Gringo Viejo
Gringo Viejo's picture

Every month, I take the names of my creditors, write their names on a slip of paper and put them in a hat. Then, I draw one name and pay that creditor.

If you don't stop bustin'my balls,

your name don't even make it to the hat.

Mon, 08/03/2015 - 16:36 | 6386601 Winston Churchill
Winston Churchill's picture

So, you're a billionaire as well ?

Actually my billionaire clients pay promptly, its the ones in the 100's of millions that

don't.

Mon, 08/03/2015 - 18:22 | 6387034 ThroxxOfVron
ThroxxOfVron's picture

In NYC when Puerto Ricans don't pay their debts it is customary to call them Dominicans.

Mon, 08/03/2015 - 21:09 | 6387618 DOT
Mon, 08/03/2015 - 16:29 | 6386556 Soul Glow
Soul Glow's picture

There goes the, "It won't happen here" meme.

Mon, 08/03/2015 - 16:31 | 6386568 Jethro
Jethro's picture

So can we expect of flush of chrome spinner rims from government vehicles on EBAY?

Mon, 08/03/2015 - 21:10 | 6387624 RaceToTheBottom
RaceToTheBottom's picture

I have seen some Prius's with spinners lately, except those were usually during a drive by shooting...

 

Mon, 08/03/2015 - 16:33 | 6386588 ThroxxOfVron
ThroxxOfVron's picture

IMHO, the Democrats are going to do whatever it takes to get some kind of bailout.

Public and Private Sector UNION Pensions were padded with PR Bonds.

.GOV pulled the GM UNION Pensions out of the fire and what is at stake here is vastly larger in scope and magnitude.

Mon, 08/03/2015 - 16:36 | 6386603 are we there yet
are we there yet's picture

Macafie keeps crashing my ZH site as if it is a virus. Over and over, Why? Only on ZH, no other sites.

Mon, 08/03/2015 - 16:47 | 6386663 Tinky
Tinky's picture

Because you misspelled their name.

Mon, 08/03/2015 - 16:50 | 6386673 jomama
jomama's picture

Adblock Plus. Macking Fee is basically a virus itself.

Mon, 08/03/2015 - 21:11 | 6387630 RaceToTheBottom
RaceToTheBottom's picture

Push some BathSalts into the USB port.

Mon, 08/03/2015 - 16:37 | 6386611 Marvin pickles
Marvin pickles's picture

Even the San juan whores will soon be credit downgraded

Mon, 08/03/2015 - 16:50 | 6386676 Closet Boy
Closet Boy's picture

Highly likely; however, I will continue to pay a premium for morenas.

Mon, 08/03/2015 - 16:38 | 6386617 Poundsand
Poundsand's picture

Let me get this straight, an island nation with almost no natural resources, dependent on foriegn imports, with 41% of it's population living below the poverty line, who's GDP is inflated by the IRS tax code, with a population of just over 3 million (leaving just 2 million over the poverty line) have how much debt? 

Thank you sir may I have another?

https://www.youtube.com/watch?v=qJhJGBM7Wvo

We get what we deserve.

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