Greece (full story➚) isn’t the only place staring down the barrel of an imminent major default, it seems. So is the U.S. Commonwealth territory of Puerto Rico.
“Puerto Rico’s Governor Says Island’s Debts Are ‘Not Payable’” – The New York Times:
Puerto Rico’s bonds have a face value roughly eight times that of Detroit’s bonds. Its call for debt relief on such a vast scale could raise borrowing costs for other local governments as investors become more wary of lending.
Perhaps more important, much of Puerto Rico’s debt is widely held by individual investors on the United States mainland, in mutual funds or other investment accounts, and they may not be aware of it.
[…]
“There is no U.S. precedent for anything [in debt restructuring] of this scale or scope,” according to the report, one of whose writers was Anne O. Krueger, a former chief economist at the World Bank and currently a research professor at the School of Advanced International Studies at Johns Hopkins University.
Oh hell.
