Did Paul Ryan just agree to a bailout of Puerto Rico?

As we’ve said before Puerto Rico is Detroit with palm trees. Its massive patronage system, its army of “public” employees and big government generally bankrupted the island. Now the Dems want the government employees to get the pensions for which there is no money, all the while stiffing the people who lent Puerto Rico the money it now owes.

There are pretty much no good guys here. The government workers are to blame. The bondholders knew they were buying sketchy stuff but assumed they’d be indemnified.

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Puerto Rico default possible, What to do?

The refrain from politicians and Wall Street has now become all too familiar.

Bail us out or the world will blow up! Financial dysfunction will catch like wildfire. If you don’t give us piles and piles of money (taxpayer money of course) you may just wake up to a world which is a smoldering cinder. It will be Mad Max in the streets. The sun will go down and never come up. In short, do YOU Mr.

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The Year Nothing Worked: Stocks, Bonds, Cash Go Nowhere

Flat as your returns.

It is no secret that we at ACC believe there are deep systemic problems in the economy. All the current cronyism, economic obfuscation, over spending, over taxation, government intrusion, and most importantly Keynesian central bank meddling does not bode well for the future. (Though we can and must correct our ways in an historic way.)

Will 2015 be looked upon as the year the “recovery” began to completely stall? Will 2016 be worse than a stall?

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Are we feeling the first winds of the next large economic storm right now?

Many think that junk bonds now are similar in some respects to the subprime housing debt bulge of a few years ago. (Junk by definition is subprime.) It is possible that the distressed bond market which is seeing challenges currently indicates serious challenges to come in the short term for the economy in general.

Junk bonds are highly exposed to economic trouble (they are distressed debt) and the market is large.

Think of them as a bluff on the economic sea which feels the effects of an approaching storm first in a similar way to how no doc mortgages were the first to be buffeted in 2006/2007.

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Art Cashin on the recent instability in the markets, Reminds him of 2007 blowups, “Monday morning could be very interesting.” (Video)

It’s funny how words and names flash up out of the darkness and suddenly become important. Friday’s was Third Avenue, a mutual fund company whose junk bond fund just blew up. The fear is that there are other bond mines out there. Cashin says that it reminds him of the early part of the financial crisis in 2007.

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Obama’s radical proposal for Puerto Rico’s debt (Here it comes, how California, other big government states will get bailed out by US taxpayers)

That’s not Uncle Sam’s money he’s giving away. He actually doesn’t have any money. That’s YOUR money.

Watch this. Many states with large union presences, with exorbitant pension obligations for state employees, don’t really see a way out of their situation without cutting pension payouts. No one will say it officially but the promises made many of these people by politicians (who were funded by state employee unions by the way) won’t be honored because they were BS from the very beginning.

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