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    Debt-plagued Puerto Rico defaulted on a bond payment for the first time Monday, triggering what is likely to be a long battle with creditors as it seeks to restructure about $73 billion in loans.The U.S. territory, whose governor has declared its debts “unpayable” and is seeking the largest restructuring ever in the country’s municipal bond market, paid just $628,000 of a $58 million payment owed by its Public Finance Corp. because the legislature didn’t provide enough money, according to the island’s Government Development Bank. “Due to the lack of appropriated funds for this fiscal year the entirety of the PFC payment was not made today,” bank president Melba Acosta Febo said in a statement. “This was a decision that reflects the serious concerns about the commonwealth’s liquidity in combination with the balance of obligations to our creditors and the equally important obligations to the people of Puerto Rico to ensure the essential services they deserve are maintained.”The default marks an escalation of the financial crisis on the island, which has been caught in a nearly decade-long recession that has crimped government revenues and triggered an exodus to the U.S. mainland.Moody’s Investor Services, which tracks the bond market, said the default is likely the first of many to come. “This event is consistent with our belief that Puerto Rico does not have the resources to make its forthcoming debt payments,” Emily Raimes, a Moody’s vice president, said in a statement. “This is the first of what we believe will be broad defaults on commonwealth debt.”[How Washington helped create Puerto Rico’s staggering crisis]In late June, Puerto Rico Gov. Alejandro García Padilla declared the island’s debts “unpayable” and called on creditors to come to the table to renegotiate repayment terms. Puerto Rico — unlike cities such as Detroit or Vallejo, Calif. — cannot seek protection under Chapter 9 of the U.S. Bankruptcy Code. García Padilla has called on U.S. lawmakers to grant Puerto Rico’s state-run corporations, which are highly indebted and provide vital services from electricity to water, the right to file for bankruptcy. That would allow those corporations an orderly process to restructure their obligations. The Obama administration has voiced support for allowing the island’s corporations bankruptcy protection, but it has continuously emphasized that there will be no federal bailout for Puerto Rico. In a letter last week, Treasury Secretary Jacob J. Lew told Sen. Orrin G. Hatch (R-Utah), chairman of the Senate Finance Committee, that Puerto Rico’s financial situation was “urgent” and said Congress should consider some orderly process to restructure the island’s debt.Lew also voiced support for ongoing efforts on the island to devise a long-term fiscal plan that points to how the island would fix its fiscal problems and reignite the economy if some form of debt relief is extended. A group of policymakers is expected to present the restructuring plan by the end of this month.Although some policymakers have embraced the idea of financial restructuring for Puerto Rico, many investors are opposed. They believe the island could continue to raise taxes, fees or utility rates, to pay what it owes. Moreover, they say, one reason they decided to loan money to the economically distressed commonwealth is precisely because it could not declare bankruptcy.Public Finance Corp., a fiscal arm of Puerto Rico’s government, recently notified investors who hold appropriation bonds, typically those backed by funds set aside by the legislature, that it had not transferred money to a trustee to pay the debt due at the beginning of this month. The corporation said the legislature never actually appropriated the funds. [Is it lights out for Puerto Rico?]David Fernandez, a public finance attorney in New York, said he hopes that the default shifts the conversation about Puerto Rico’s debt away from the overall size of the obligation, to one that focuses on the level of debt — and ability to pay — exhibited by the individual issuers of bonds on the island. While the island’s electric utility has one set of problems, he said, perhaps other debt issuers are in better shape to pay. They might also face greater legal mandates to pay as well. For example, the island’s constitution says that general obligation bond holders should be paid even before government workers.“It is the individual entities that have issued this debt. That is where the focus should be,” Fernandez said.






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    Don't think the Chinese economy is doing as well as Chinese government statistics say it is? A lot of companies seem to agree. When China reported last week that second-quarter gross domestic product was up by 7% from a year earlier--steady with the first quarter and better than the 6.8% economists anticipated--it raised more eyebrows than glasses.

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    Imagine a scenario in which the federal government helps households pursue the American dream with ultra-loose credit, only to see prices skyrocket and families take on loads of debt they can't repay. Yes, it sounds like the housing market of a decade ago, but some say it is also the challenge of today's higher- education system. The federal government has boosted aid to families in recent decades to make college more affordable.

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    Issue of Planned Parenthood funding snarls budget outlook. A fight over federal aid to women's health group Planned Parenthood could upend the Federal Reserve's plans to raise interest rates in September. It is now more-likely-than-not that there will be a shutdown of the federal government sometime around the start of the new fiscal year on Oct. 1 as a result of a Republican vow to halt federal aid to Planned Parenthood, said Stan Collender, a former Democratic Congressional...

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    Look around the country, and you'll find the same impassioned argument about pay for low-wage workers is taking place. The $15 minimum wage was approved in Seattle last year, and is currently being proposed in New York City. Bernie Sanders is pushing for a federal $15 floor. Donald Trump, the Republican presidential candidate leading the latest polls, would prefer it remain as is, at $7.25 an hour.But raising the minimum wage carries a different significance depending on where you live. A dollar goes a lot further in the South than it does in New England, as my colleague Niraj Chokshi explained earlier this month.The Pew Research Center used regional price parities, supplied by the Bureau of Economic Analysis (BEA), to estimate how fluctuations in purchasing power affect the real implications of a $15 minimum wage around the country. Many of the findings are fairly obvious—in New York City, where things are 22.3 percent more expensive than the national average, the hike wouldn't mean quite as much as it would in Macon, Georgia, where prices are 12.2 percent below average. But the overarching takeaway is still an important one.The map above shows the real purchasing power of $15 in every state. In Honolulu, the priciest urban area in the United States, a $15 minimum wage is only worth about $12.24; in rural West Virginia, meanwhile, where prices are lower than anywhere else in the country, $15 is worth closer to $20. The only place where $15 is actually worth $15 is Allentown, Pennsylvania, according to Pew.In some senses, local, price-driven minimum wages already exist. “There is a strong correlation between the purchasing power parity data and the minimum wage amount, which shows that local policymakers are actually responsive to the conditions of their states,” Alan Cole, an economist with the Tax Foundation, told The Washington Post earlier last month.The picture is similar to one BEA data painted recently, which showed the value of state-level minimum wages. States with higher minimum wages don't necessarily pay employees a higher relative salary.And it underscores an important part of national minimum wage policy that doesn't often get discussed. If the goal is the ensure that all workers are paid a living wage—whatever that living wage might be—and the cost of living varies not just by state, but by county, then regional pay floors make more sense.At the moment, there is at least one aspiring presidential candidate seems to agree. Democratic presidential hopeful Hilary Clinton has said she supports a $15 minimum—just not for everyone. "I think part of the reason that the Congress and very strong Democratic supporters of increasing the minimum wage are trying to debate and determine what’s the national floor is because there are different economic environments," Clinton said in a town hall in New Hampshire last month. "What you can do in L.A. or in New York may not work in other places."






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    Look around the country, and you'll find the same impassioned argument about pay for low-wage workers is taking place. The $15 minimum wage was approved in Seattle last year, and is currently being proposed in New York City. Bernie Sanders is pushing for a federal $15 floor. Donald Trump, the Republican presidential candidate leading the latest polls, would prefer it remain as is, at $7.25 an hour.But raising the minimum wage carries a different significance depending on where you live. A dollar goes a lot further in the South than it does in New England, as my colleague Niraj Chokshi explained earlier this month.The Pew Research Center used regional price parities, supplied by the Bureau of Economic Analysis (BEA), to estimate how fluctuations in purchasing power affect the real implications of a $15 minimum wage around the country. Many of the findings are fairly obvious—in New York City, where things are 22.3 percent more expensive than the national average, the hike wouldn't mean quite as much as it would in Macon, Georgia, where prices are 12.2 percent below average. But the overarching takeaway is still an important one.The map above shows the real purchasing power of $15 in every state. In Honolulu, the priciest urban area in the United States, a $15 minimum wage is only worth about $12.24; in rural West Virginia, meanwhile, where prices are lower than anywhere else in the country, $15 is worth closer to $20. The only place where $15 is actually worth $15 is Allentown, Pennsylvania, according to Pew.In some senses, local, price-driven minimum wages already exist. “There is a strong correlation between the purchasing power parity data and the minimum wage amount, which shows that local policymakers are actually responsive to the conditions of their states,” Alan Cole, an economist with the Tax Foundation, told The Washington Post earlier last month.The picture is similar to one BEA data painted recently, which showed the value of state-level minimum wages. States with higher minimum wages don't necessarily pay employees a higher relative salary.And it underscores an important part of national minimum wage policy that doesn't often get discussed. If the goal is the ensure that all workers are paid a living wage—whatever that living wage might be—and the cost of living varies not just by state, but by county, then regional pay floors make more sense.At the moment, there is at least one aspiring presidential candidate seems to agree. Democratic presidential hopeful Hilary Clinton has said she supports a $15 minimum—just not for everyone. "I think part of the reason that the Congress and very strong Democratic supporters of increasing the minimum wage are trying to debate and determine what’s the national floor is because there are different economic environments," Clinton said in a town hall in New Hampshire last month. "What you can do in L.A. or in New York may not work in other places."






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    Look around the country, and you'll find the same impassioned argument about pay for low-wage workers is taking place. The $15 minimum wage was approved in Seattle last year, and is currently being proposed in New York City. Bernie Sanders is pushing for a federal $15 floor. Donald Trump, the Republican presidential candidate leading the latest polls, would prefer it remain as is, at $7.25 an hour.But raising the minimum wage carries a different significance depending on where you live. A dollar goes a lot further in the South than it does in New England, as my colleague Niraj Chokshi explained earlier this month.The Pew Research Center used regional price parities, supplied by the Bureau of Economic Analysis (BEA), to estimate how fluctuations in purchasing power affect the real implications of a $15 minimum wage around the country. Many of the findings are fairly obvious—in New York City, where things are 22.3 percent more expensive than the national average, the hike wouldn't mean quite as much as it would in Macon, Georgia, where prices are 12.2 percent below average. But the overarching takeaway is still an important one.The map above shows the real purchasing power of $15 in every state. In Honolulu, the priciest urban area in the United States, a $15 minimum wage is only worth about $12.24; in rural West Virginia, meanwhile, where prices are lower than anywhere else in the country, $15 is worth closer to $20. The only place where $15 is actually worth $15 is Allentown, Pennsylvania, according to Pew.In some senses, local, price-driven minimum wages already exist. “There is a strong correlation between the purchasing power parity data and the minimum wage amount, which shows that local policymakers are actually responsive to the conditions of their states,” Alan Cole, an economist with the Tax Foundation, told The Washington Post earlier last month.The picture is similar to one BEA data painted recently, which showed the value of state-level minimum wages. States with higher minimum wages don't necessarily pay employees a higher relative salary.And it underscores an important part of national minimum wage policy that doesn't often get discussed. If the goal is the ensure that all workers are paid a living wage—whatever that living wage might be—and the cost of living varies not just by state, but by county, then regional pay floors make more sense.At the moment, there is at least one aspiring presidential candidate who seems to agree. Democratic presidential hopeful Hilary Clinton has said she supports a $15 minimum—just not for everyone. "I think part of the reason that the Congress and very strong Democratic supporters of increasing the minimum wage are trying to debate and determine what’s the national floor is because there are different economic environments," Clinton said in a town hall in New Hampshire last month. "What you can do in L.A. or in New York may not work in other places."






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    Mortgage loan demand continued to grow in the second quarter but fewer banks eased lending standards than in the prior three months, a Federal Reserve senior loan officer survey released Monday showed. Only seven banks said they had eased standards on mortgage loans somewhat on GSE-eligible loans in the second quarter, down from 13 in the first quarter. Banks reported little change to business lending over the second quarter.

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    The trend for stronger demand for mortgage loans continued in the second quarter, a Federal Reserve senior loan officer survey released Monday showed, suggesting financial strains on households are easing. About 44% of banks reported moderately stronger demand for mortgages, compared with only 5% reporting weaker demand, according to the survey of 71 domestic and 23 branches of foreign banks operating in the U.S. The increase in mortgage demand was across the spectrum,...

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    Traders anxiously await Friday's July jobs report. The dollar finished the first trading session of the month higher against its main rivals, retaining gains from early in the session despite a disappointing reading of U.S. manufacturing in July. The Institute for Supply Management's manufacturing index showed a slight deceleration in July, after the index grew at its fastest rate in five months in June.

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    Big banks scored a minor regulatory victory Monday. But this may be overshadowed by comments from Federal Reserve officials indicating that annual stress tests could become even more stringent. The win came in the form of a change to the way the Fed will calculate a capital surcharge it applies to global systemically important banks.

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    Standard & Poor's Ratings Services cut its rating on Atlantic City, New Jersey's general obligation debt three notches to 'B' from 'BB', citing continued uncertainty regarding the long-term fiscal stability and recovery of the city.

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    The U.S. government expects to borrow $127 billion in the July-September quarter, an estimate that is $61 billion higher than previously projected in May, the Treasury Department said Monday. The increase in borrowing in the current quarter is due to changes in cash balance assumptions as well as a small increase in financing needs, the department said. The estimate includes an assumption of an end-of-September cash balance of $225 billion.

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    The U.S. Treasury said on Monday it would borrow more in the July-September period than previously estimated so that it could hold a bigger cash buffer and because of a slightly larger than anticipated fiscal shortfall. The Treasury said in a statement it would borrow $127 billion through credit markets during the period, up from an initial estimate of $66 billion.

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    Copper falls to six-year low. Gold futures started August on a sour note, with the precious metal weighed down by a stronger dollar ahead of a key employment report Friday that could set the tempo for the Federal Reserve's first interest-rate hike since 2006.. Renewed expectations that the Fed will hike rates as early as September has bolstered the dollar and tarnished the attractiveness of the yellow metal, which has been trading at its lowest level in five years.