With the recent SCOTUS decision in Puerto Rico v. Franklin California Tax-Free Trust it is clear the government in Puerto Rico will not be able to restructure its own debt. My guess is congress will pass its legislation setting up a financial review board for the island who will force haircuts upon some of Puerto Rico’s debt holders. This should be the canary in the coal mine for other municipal and sovereign debt holders. Chicago, the State of Illinois, Detroit and maybe even California will have great difficulty paying off their debt and heir bond holders will see harsh haircuts. Just ask the GM bold holders how much trust one can place in governmental debtors.