Puerto Rico to Default on $37 Million Bond
Payments Due Jan. 1 - (www.bloomberg.com) Puerto
Rico will default on about $37 million in bond payments due Jan. 1 and divert
revenue to make others, escalating a conflict with investors as Governor
Alejandro Garcia Padilla seeks to restructure a $70 billion debt burden. The
amount is a fraction of the almost $1 billion in interest due at the start of
the year. The island will miss payments on $35.9 million of non-commonwealth
guaranteed Puerto Rico Infrastructure Financing Authority debt and $1.4 million
of Public Finance Corp. bonds. The money is being used to help pay investors
who are owned $328.7 million of interest on general-obligation debt. Garcia
Padilla has warned for weeks that if forced to choose between paying creditors
and paying for essential services, he would favor his people. A skipped
general-obligation payment would have marked a turning point in Puerto Rico’s
debt crisis because the securities are considered to have the strongest legal
protections among the island’s different issuers. The commonwealth’s
constitution states that general-obligation bonds must be repaid before other
expenses.
Here's
one huge sign that Saudi Arabia is in for a difficult new year - (www.businessinsider.com) A number of oil-dependent countries could see
their fortunes turn in the new year, thanks to a global
plunge in crude prices and
the possibility of increased supply thanks to the anticipated removal of
most oil-related sanctions on Iran. Although Saudi Arabia is second in the
world in proven reserves
and daily production — a gaudy9.7 million barrels per day in 2014 — there are already signs that the
country isn't going to remain unscathed. On December 28, the Saudi government
announced a budget that included an unprecedented round of austerity measures.
Oil Investors Suffer Record Second Year of
Misery - (www.bloomberg.com) Another
horrendous year is drawing to a close in the oil patch. After starting out with
hopes of a rebound, 2015 will instead punctuate the worst two years ever
suffered by U.S. crude producers. West Texas Intermediate futures are
heading for their biggest-ever two-year drop, while the Standard &
Poor’s Energy Sector Index is set to mark its first consecutive decline since
2002. Futures and equities will post December decreases, signaling more
discomfort as 2016 starts. Oil has tumbled since Saudi Arabia led
the Organization of Petroleum Exporting Countries in November 2014 in deciding
to maintain output and defend market share against higher-cost producers,
generating a record supply glut. Record output this year from Saudi
Arabia, Russia and Iraq has boosted global stockpiles to an all-time high, theInternational Energy Agency said on Dec. 11.
Buffett’s
Utility Monopoly In Nevada Socks Musk’s Solar Firm - (www.wolfstreet.com) In a clash of the titans, Warren Buffett just
defeated Elon Musk. The fight was over solar net-metering in Nevada, a state
that has the fifth largest installed solar capacity in the country. Nevada is
home to Tesla’s ‘Gigafactory,’ which will produce batteries for electric
vehicles. In addition to CEO of Tesla, Elon Musk is also the chairman of
SolarCity, and net-metering – the policy that allows homeowners with solar
panels to be paid for the power they produce – is central to solar economics. But
while Musk has quite a bit of sway in the Silver State, he came up short
against Warren Buffett. NV Energy, a major Nevada utility and subsidiary of
Buffett’s Berkshire Hathaway, strongly opposed the net-metering provision.
The
Wheels Just Fell Off: US Trucking Has Not Been This Bad Since The Financial
Crisis – (www.zerohedge.com) Earlier
this month, we profiled yet
another casualty of slumping trade, falling commodity prices, and mediocre,
double-adjusted economic “growth”: trucking. More specifically, we
highlighted the dramatic November decline in Class 5-8 orders. The numbers for
Class 8 - those trucks with a gross weight over 33K pounds and which, you’re
reminded, make up the backbone of U.S. trade infrastructure and logistics -
were a veritable disaster. “Class 8 orders of 16,600 were below our
channel check based 22,000-25,000 expectation, dropped 59% yr/yr and 36% from
October (vs. the ten-year average 7% decrease in November from October), and
was the weakest order month on a seasonally adjusted basis since August 2010,”
Wells Fargo exclaimed, before adding that “clearly, November Class 8 orders
slowed to weak levels and were beneath expectations.”
Brazil Real Plunges as Minimum-Wage Hike Worsens Fiscal Outlook - (www.bloomberg.com)
Stocks Drop With Commodity Currencies as Offshore Yuan Weakens - (www.bloomberg.com)
Oil rebound fizzles, sending global shares lower - (www.reuters.com)
Offshore Yuan Declines to Five-Year Low as China Loosens Grip - (www.bloomberg.com)
Ruble Caps Third Annual Slump as Oil Seen Stoking Losses in 2016 - (www.bloomberg.com)
China Market Meddling Widens Rift in Onshore-Offshore Prices - (www.bloomberg.com)
China central bank temporarily suspends some FX business of several foreign banks: sources - (www.reuters.com)
China eyes fiscal splurge to cushion reforms, slowing growth - (www.reuters.com)
Emerging-Market Sentiment Turns More Bearish on Oil, Fed's Path - (www.bloomberg.com)
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