Hedge funds take a hit on Puerto Rico debt

NY Times:

Message of Puerto Rico Debt Crisis: Easy Bets Sometimes Lose


Hedge funds bought up the island’s high-interest bonds at a discount, confident because the territory couldn’t declare bankruptcy. This week, it essentially did.
So many stories about hedge funds suggest they have become enormously wealthy because they are masters at managing risk, but this is another example of them being spectacularly wrong on occasions.  Another example of this is Chelsea Clinton's husband's bad bet on Greek debt that crashed his fund.

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