Puerto Rico more important than Greece, China: Cramer

Cramer: Puerto Rico is the big story

As default looms large over Puerto Rico, CNBC's Jim Cramer said Tuesday the situation there is more important to investors than the Greek saga or the situation in China.

"Everybody had it. Rich people had Puerto Rico. Mutual funds had Puerto Rico [bonds]. A lot of hedge funds had levered up Puerto Rico because it was such a great trade. It turned out to be not so great," Cramer said on "Squawk on the Street."

Cramer made his remarks a day after the U.S. territory's governor, Alejandro García Padilla, told The New York Times that, as the situation stands now, Puerto Rico cannot pay its $72 billion debt. "This is not politics, this is math," García Padilla said.

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This led the stocks of many bond insurers, including MBIA and Assured Guaranty, to fall Monday.

MBIA shares dropped 23 percent amid the news and Assured Guaranty shed 13 percent. Midmorning Tuesday, MBIA was down 18 percent and Assured Guaranty was off slightly.

Cramer added that, after the news was released, the federal government might intervene in some way. Nevertheless, those hopes were dashed after White House spokesman Josh Earnest told reporters a Puerto Rico bailout was not in the cards.