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In a bid to raise cash, foreign central banks and government institutions sold $57.2 billion of U.S. Treasury debt and other notes in January, CNN Money reported yesterday. That is up from $48 billion in December and the highest monthly tally on record going back to 1978. It's part of a broader trend that gathered steam last year when central banks sold a record $225 billion of U.S. debt. So what are foreign central bankers doing with these piles of cash? They're mostly using the funds to stimulate their own economies as the global growth slowdown and crash in oil prices continue to take their toll. For example, China has been liquidating its holdings of foreign debt to pump money into its slowing economy, plummeting currency and extremely volatile stock market. China, the largest owner of U.S. debt, trimmed its Treasury holdings by $8.2 billion in January, the Treasury Department said. The actual decline was likely larger considering China reported selling $100 billion of foreign-exchange reserves in January.

Atlantic City, N.J., Mayor Don Guardian said that he could live with changes proposed by Gov. Chris Christie through conditional vetoes to the state's rescue package of his troubled city, Philly.com reported today. He warned that the city needs the infusion of aid to continue to be solvent. "It's impossible without these bills," he said. "We absolutely need these bills to move forward." Guardian said that the additional state controls on aid to the city requested by Christie in his veto message on Monday do not represent a big change from what is already a heavily monitored and state-managed municipality. Guardian had stayed uncharacteristically mum Monday after the governor's complicated conditional veto of most of the package and some stinging characterizations of city stakeholders as lacking fiscal restraint. Others were not as reticent. State legislators expressed frustration that the governor had waited five months to take action and sent the bills back with a host of changes. Despite the governor's harsh rhetoric — Christie said the city's stakeholders eschewed "fiscal restraint and leadership" in favor of "self-preservation and vacillation" — Guardian said that he supported the specific changes. A day of studying the governor's line-by-line edits turned up nothing that would materially alter the mission of stabilizing the tax base, Guardian said. The city has been counting on these bills since they were proposed a year ago. They were passed by the legislature mnjin June.

The governor of Puerto Rico has decided that the island cannot pay back more than $70 billion in debt, setting up an unprecedented financial crisis that could rock the municipal bond market and lead to higher borrowing costs for governments across the U.S., The Washington Post reported yesterday. Puerto Rico’s move could roil financial markets and raises questions about the once-staid municipal bond market. In addition, with as much as $73 billion in debt, the island’s debt obligation is four times that of Detroit, which became the largest U.S. city to file for bankruptcy in 2012. Puerto Rico’s governor, Alejandro Garcia Padilla, will seek concessions from creditors, which range from mutual funds in the U.S. to large hedge funds that have been buying Puerto Rican debt at high interest rates, in an effort to stretch out loan payments and drive down borrowing costs that are hamstringing Puerto Rico’s struggling economy.

Puerto Rico’s governor submitted a $9.8 billion budget proposal calling for $674 million in cuts amid the U.S. territory’s economic crisis, The Washington Post reported on Wednesday. Gov. Alejandro Garcia Padilla did not present the budget during a televised address as is traditional, opting instead to file it after legislators recessed for the day. Legislators will soon hold public hearings before the House of Representatives approves the budget and turns it over to the Senate. The budget has to be approved by June 30. “We are facing a historic fiscal crisis where the available resources are extremely limited,” the 56-page proposal states. The proposed budget seeks to set aside $1.5 billion to help pay off Puerto Rico’s debt, an increase of $400 million from last year’s budget. Officials also have said the governor wants to close 95 schools and 20 public agencies to cut costs.

Greece will not be able to make a payment to the International Monetary Fund due on June 5 unless foreign lenders provide more aid, a senior ruling party lawmaker said on Wednesday, the latest warning from Athens that it is on the verge of default, Reuters reported yesterday. Prime Minister Alexis Tsipras's leftist government says it hopes to reach a cash-for-reforms deal in days, although European Union and IMF lenders are more pessimistic and say talks are moving too slowly for that. Payments to the IMF totaling about 1.5 billion euros (US$1.7 billion) fall due next month, starting with a 300 million euro payment on June 5. Talks between Greece and its lenders have foundered on Athens' demand to roll back labor and pension reforms as well as the lower fiscal targets set under its bailout program. Among concessions Athens is mulling is a tax on banking transactions to help raise revenue, although discussion of the levy is at an early stage.

There is a new twist in the fight between Argentina and a group of hedge funds that has been playing out in New York courts, The New York Times reported yesterday. A U.S. federal court has allowed Citigroup to make interest payments to investors holding $2.3 billion of Argentine bonds due at the end of the month. Citigroup also said that it had been authorized to make another interest payment on June 30. The move, outlined in an order that is expected to be filed in court on Monday, appeared to be a reversal by Hon. Thomas P. Griesa. As recently as March 12, Judge Griesa rejected an appeal by Citigroup to make the March 31 interest payments.

Eurozone leaders will tell Greece today that time and patience are running out for its leftist-­led government to implement agreed reforms to avert a looming cash crunch that could force it out of the single currency, The Economic Times reported today. Prime Minister Alexis Tsipras has requested a meeting with the leaders of Germany, France and the main EU institutions on the sidelines of a European Union summit to press for Athens to be allowed to raise short-­term funds to keep itself afloat. German Chancellor Angela Merkel delivered the same message in a speech to parliament ahead of the Brussels talks and a crucial visit by Tsipras to Berlin next Monday, saying that the crisis would only be overcome if Greece stuck to agreements. No one should expect a solution at Thursday's late-­night Brussels talks or from her meeting with Tsipras next week, at which she said they would have "time to talk to each other in detail and perhaps also to argue.” A political meeting of a small group of leaders could not and would not replace the formal agreement that Greece concluded on Feb. 20 with Eurogroup finance ministers. EU sources said that Greece had refused to provide any update on public finances or reform plans in a conference call of senior euro zone officials on Tuesday, and had denied EU, IMF and European Central Bank experts access to government buildings in Athens, insisting that all meetings take place in a hotel.

The nasty battle between Argentina and a group of New York hedge funds has claimed another victim: Citigroup, The New York Times DealBook reported yesterday. The bank said that it would shut its custody business in Argentina after a federal judge in New York last week rejected its request to lift an order that prevented the bank from making interest payments to investors holding $2.3 billion in Argentine notes. Citing an “unprecedented international conflict of laws,” Citigroup said that its Argentine branch was making plans to close the custody business “as soon as possible,” and will continue to pursue “all legal remedies.” The bruising defeat for Citigroup follows a decision from the Federal District Court in Manhattan last summer to block all interest payments on Argentine debt, a ruling that set off Argentina’s default last July 31. Citigroup’s action was the latest flash point for the investors and banks on the sidelines of a multi-year court fight that traces back to 2001, when Argentina defaulted on $100 billion of debt. Most investors have since traded in their bonds for discounted exchange notes, but a small group of hedge fund managers chose not to exchange their bonds and instead took Argentina to court in New York to seek full repayment.