Daily Rewind: Crisis in paradise
Puerto Rico filed for bankruptcy today. It’s the biggest municipal bankruptcy filing ever in America. Here are the details:
- Puerto Rico owes creditors a whopping $70 billion.
- A judge still has to approve the bankruptcy filing.
- Many prominent Wall Street firms don’t want the island to enter Bankruptcy proceedings. That’s because they own Puerto Rico’s bonds and could end up getting paid less than they’re owed.
- The island has been suffering through an economic recession for about a decade. Unemployment is at 11.5% — meaning more than one in 10 adults can’t find work.
- President Trump has repeatedly said he won’t bail out Puerto Rico.
- Citizens have been fleeing Puerto Rico for mainland America. The island’s population has declined by 350,000 in the past 10 years.
- Puerto Rico had been unable to declare bankruptcy because it doesn’t have access to bankruptcy rights under a process called Chapter 9, which only applies to the 50 U.S. states.
- The debt crisis got so bad that Congress created a special Title III process similar to Chapter 9 bankruptcy. It was established in 2016 under a bill called PROMESA.
Other important news to know:
Fed won’t raise interest rates … yet. Federal Reserve leaders announced they won’t raise key interest rates today after raising them in March and December. But Wall Street predicts there’s a 67% chance of a rate hike in June, according to CME Group. While the economy grew at a sluggish pace for the first three months of 2017, the Fed is confident it’ll pick up. Read more from CNNMoney’s Patrick Gillespie.
Facebook closes in on the 2 billion user mark. It added 80 million monthly users last quarter and reported better-than-expected sales of $8.03 billion. Today’s earnings report comes just hours after CEO Mark Zuckerberg’s announced Facebook is hiring 3,000 people to review user content. Several high-profile videos of suicide and murder have been broadcast on the platform, including a Cleveland murder video that remained up for hours on Facebook being removed. Read more from CNN Tech’s Seth Fiegerman.
Big headlines from around the web:
*Hulu launches a live-streaming service (Gizmodo)
*FBI Director defends his handling of the Clinton email probe (CNN Politics)
*House approves $1 trillion budget to keep the gov’t running (LA Times)
You’re all caught up for now. We’ll see you again tomorrow!
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