default

There are a few correlations that we find particularly compelling...

At 108 four-year colleges, at least half of all students hadn’t paid even $1 of what they owe within three years of leaving college. Those colleges got more than $10 billion in federal student loans and grants last year.

Needless to say, these names are just the beginning: once the redemptions - and gating - genie is out of the bottle, there is no putting it back.

Despite every effort by The Fed to convince the world that everything is awesome, it's not. From China growth risks to concerns about tightening financial conditions, Goldman warns so-called 'grey swan' fears are rising with Brexit, Trumpe elected, widening terrorist threats, and increased protectionism the most impactful.

Financial fraud is any method by which deception or duplicity induces those with money to "invest" in a scheme...   

Puerto Rico may be teetering on the verge of default but that doesn't mean public sector employees won't be going home with some extra cash for the holidays. Ten days before $1 billion in interest payments come due and two weeks after resorting to an absurd revenue clawback end-around to make a $354 million payment, the commonwealth just paid out $120 million in bonuses.

Taken together with the rather steep drop in US industrial production, the risks of a full-blown and perhaps severe recession have undoubtedly grown. Unlike what the FOMC is trying to project via the federal funds rate, a rate that isn’t being fully complemented, either, at this point, visible economic risk is not just rising it is exploding.

"My minions in the Federal Reserve - such loyal servants! - continue feeding an orgy of leverage and debt, spreading ruination under the false guise of prosperity. What a delicious irony, that the fools doomed to eternal damnation in my Empire believe themselves prosperous as they absorb the poison of exponentially rising leverage and debt."

"Typically rate rises start when profits are growing faster than debt and when companies are still deleveraging. This is around “half-past two” on our leverage clock2: 1994 and 2004 both fit this pattern. Now, with companies having been leveraging up for the past four years, and net debt/EBITDA in both Europe and especially the US at its highest non-recessionary level ever, it feels more like eight o’clock, or possibly even later."

“To the intelligent man or woman, life appears infinitely mysterious, but the stupid have an answer for everything.” ~Edward Abbey

A world where money is decentralized means a world where nothing you’ve ever seen before will become the new norm and the new norm is unlikely to include a scrap of paper issued by a bankrupt government.

What happens the next time global GDP takes a nosedive when Central Banks have already used up all of their ammunition?

When last we checked in on Puerto Rico’s seemingly intractable debt debacle, Governor Alejandro Garcia Padilla was busy using an absurd revenue clawback end-around to avoid defaulting on $273 million in GO debt. On Friday, we get the latest out of Puerto Rico and the news is ... well, good we suppose. PREPA - Puerto Rico’s power authority - has reached a restructuring agreement with bondholders and insurers to refinance some $9 billion in debt via securitization.

“I have a feeling that they will not pay us back because they are crooks.”