Puerto Rico Will Default on Bank Debt as Crisis
Intensifies - (www.bloomberg.com) Puerto
Rico will default on a $422 million bond payment for its Government Development
Bank, escalating the pressure on investors to negotiate a broad debt
restructuring and on Congress to act on legislation to help lessen the island’s
financial crisis. Governor Alejandro Garcia Padilla invoked a debt moratorium
law approved last month, saying during a televised address Sunday that the
commonwealth needs to focus on providing essential services. The bank, already
operating under an emergency period, has until the end of Monday to make the
payment. “Faced with the inability to meet the demands of our creditors and the
needs of our people, I had to make a choice,” Garcia Padilla said during his
10-minute speech. “I decided that essential services for the 3.5 million
American citizens in Puerto Rico came first.”
Iraq declares state of emergency as protesters
storm Green Zone, parliament - (www.usatoday.com) Iraqi
Prime Minister Haider Al-Abadi said Saturday that security had been
restored in Baghdad but called on demonstrators who stormed the
capital's heavily fortified Green Zone and broke into parliament to return
to "designated protest areas." The prime
minister issued the appeal on Twitter after hours of rowdy protests
by hundreds of people chanting and waving Iraqi flags in the highly protected
zone that houses government ministries, parliament and foreign embassies,
including the U.S. embassy. Security forces generally appeared to maintain
restraint amid the chaos, but did use tear gas against crowds at one
entrance to the Green Zone, according to the Associated Press.
Former Goldman Sachs president says our
economic situation 'will end in tears' - (finance.yahoo.com) Taking
the long view is one of those easier-said-than-done propositions, right? For
instance, while you might think that the economy has pretty much recovered from
the Great Recession of 2008, one prominent financier thinks the problems that
caused that big meltdown have been papered over and will come back to hurt us
again. And then there’s the little issue of China’s economy surpassing ours
soon. John Thornton, the former president of Goldman Sachs (GS), who likes to take the long view, says he’s
“feeling uneasy” about the global economy right now and thinks we’re living on
borrowed time. “After the events of 2008, really since then, the central banks
either collectively or individually have tried to implement policies which
would, in effect, buy time for individual governments to take the actions they
should take to put their houses in order,” Thornton says.
Saudis Heed an Oil Warning From History - (www.bloomberg.com) After
the failure of the Doha deal to freeze oil production, Saudi Arabia's output is
now almost certain to rise in the coming months. It wants to regain market
share in China and meet the summer peak in its own domestic demand without
cutting exports. As I wrote a couple of weeks ago, it's no surprise that Saudi
Arabia refused to join the output freeze championed by Venezuela and Russia. It
has little interest in seeing oil prices rise far enough to throw a lifeline to
high-cost producers, who are beginning to buckle. With the failure
in Doha, the kingdom will probably lift production over the
summer, helping prolong the oil glut. The use of crude for Saudi's
domestic power generation usually rises more than 400,000 barrels per day
between winter and summer, and we can expect oil production to follow a similar
path this year to preserve the volume available to export.
US banks sound caution on commercial property
loans - (www.ft.com) Top
US bankers have sounded caution over commercial real estate lending as concerns
rise that bubbles are forming in parts of the country’s property market. Lenders
have helped fund a boom in recent years in cities such as New York and Miami,
where luxury high rises have sprung up across the skyline. But
executives at several banks signalled during results season that they were
tightening up standards for CRE lending, which includes mortgages secured
against big apartment and office developments. “We want to be careful on CRE,”
said Brian Moynihan, chief executive of Bank of America,
which has a $58bn commercial real estate portfolio. Richard Davis, chief
executive of US Bancorp,
told investors that the country’s fifth-largest lender by assets was being
“very watchful”. “We’re protecting what we have, and probably being more
careful,” he added. “A lot of the banks are growing that [CRE] a lot. It’s been
flat for us.”
Sadr followers dig in inside Baghdad's Green Zone, political
crisis deepens - (www.reuters.com)
Russia defends intercept of U.S. reconnaissance plane over Baltic - (www.reuters.com)
Russia defends intercept of U.S. reconnaissance plane over Baltic - (www.reuters.com)
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