"... moments ago the NYT reported that the default wave has jumped the Atlantic and has hit Puerto Rico whose governor Alejandro García Padilla, saying he needs to pull the island out of a “death spiral,” has concluded that the commonwealth cannot pay its roughly $72 billion in debts, an admission that will probably have wide-reaching financial repercussions.
In other words, first Greece, and now Puerto Rico may be in a state of Schrodingerian default.
Why the ambiguity?Because while Greece is not technically in default until July 1, Puerto Rico does not even have an option to declare outright default.
But that doesn't mean that the commonwealth will service it.
Quoted by the NYT, García Padilla said "The debt is not payable."
He added that "there is no other option.
I would love to have an easier option.
This is not politics, this is math.”
...As the NYT adds, this is "a startling admission from the governor of an island of 3.6 million people, which has piled on more municipal bond debt per capita than any American state..."
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