Submitted by Tyler Durden: "If the politicians lead us into a
'prioritization of payments' situation for Treasury Secretary Lew or an
actual missed payment, there is nothing you can do to protect yourself
from that!" are the ominous words that Kyle Bass uses to
describe the farce that is rapidly approaching (and for now being
ignored by stocks). Bass went on to pull no punches in his
"disappointment" in JCPenney's performance (and dilution) coming as
close as he can to saying "sell." But his piece de resistance was a
dismal destruction of any silver lining for Puerto Rico and the significant implications that will have on Muni bonds in general.
On Default risk and "Un-hedgeable" implications:
On JCPenney - "Disappointed" - "didn't belive they needed to raise the capital... and now they have diluted us over 30%"
On Puerto Rico and the threat to the entire Muni market - "you look at their finances and you can only say - I have no clue how this can exist for very much longer"
Source
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