Puerto Rico exposes dearth of bond vigilantes

January 7, 2016

Tax perks and a thirst for yield meant bond buyers tolerated bad fiscal practices for years. They only seriously pushed up borrowing costs after the island’s $70 bln debt crisis became all too obvious. Foolish financial crowds had better wise up to other U.S. danger zones.

Puerto Rico debt payment marks end of fiscal rope

December 1, 2015

The cash-strapped U.S. territory scraped together $355 mln for creditors, avoiding default on its government-guaranteed debt. A $945 mln payment due on Jan. 1 will be harder to deliver. Unless Congress offers relief soon, bondholders will still face a messy restructuring.

U.S. election complicates Puerto Rico repair job

November 3, 2015

President Obama wants Congress to help the island out of a $72 bln hole. His calls for debt restructuring, better oversight, tax and healthcare tweaks make sense, but risk falling prey to candidate posturing. It may take a full financial meltdown for D.C. to roll up its sleeves.

Treasury’s Puerto Rico superbond looks half baked

October 16, 2015

The U.S. territory and the federal government have discussed swapping some of the island’s $72 bln debt for a new bond paid from a Treasury-run kitty. The idea is politically fraught and may not work. It’s a poor substitute for a financial control board or Chapter 9 bankruptcy.

Rob Cox: Can we Grand Bargain before going bust?

By Rob Cox
May 29, 2014

Kumbaya has broken out in Detroit: Michigan’s legislature, the UAW and even JPMorgan are chipping in to help the city emerge from bankruptcy protection. While good news, it’s also a sad comment on America’s broken political system that it takes so much failure to come together.