May

Message of Puerto Rico Debt Crisis: Easy Bets Sometimes Lose

When some of Wall Street’s savviest hedge funds piled into Puerto Rico’s debt in 2014, it seemed like an easy bet: Buy up the island’s bonds at a discount, pocket the high interest and persuade politicians to make decisions that would raise the value of their investments.

Even if Puerto Rico’s economy collapsed and its government unraveled, the investors funds figured they had an ace in hand. Puerto Rico was a United States commonwealth, and thus — like the 50 states — legally barred from declaring bankruptcy as a way to shed its debts…

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Message of Puerto Rico Debt Crisis: Easy Bets Sometimes Lose

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