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This week's World Peace Update doesn't veer too far from its default distress curve on the bruised and bloodied axes of planetary suffering: some Slovenians got really angry with their government, a group of Tunisian protesters got blinded and the Syrians got booted off the internet.
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Beginning The New Year With A Bang! In this issue, we redefine default and distress to recognize fundamental shifts in the municipal market.
A handful of bonds backed by yearly payments from tobacco companies under a landmark settlement with 46 states are in the earliest stages of default, and more distress is expected.
Page B1 STATE BONDS IN JEOPARDY A handful of bonds backed by yearly payments from tobacco companies under a landmark settlement with 46 states are in the earliest stages of default, and more distress is expected.
And they could give both FHA and bankruptcy judges the right to recast mortgages in much the way that a bank pursues a workout of a troubled loan to forestall default and financial distress.
But with the economy slowing again, housing could also relapse, with falling prices provoking more defaults, foreclosures and distress sales, and ever-lower prices.
At the risky, subprime end of the mortgage market, there are already signs of distress: defaults and foreclosures have been soaring.
For firms, the project studies how they should manage their debt maturity structure over the business cycle to reduce the risks of financial distress and default.
Even aside from neglecting the systemic damage to the economy that banks' distress and default cause, such claims are invalid because banks have multiple small creditors and are unable to commit effectively to their overall funding mix and investment strategy ex ante.
More than $60 billion worth of outstanding oil company debt is already in distress or default, with another $50 billion rated B, or well below investment grade.
The finance research field offers the majority of publications on overleveraging as a cause of crisis, finding positive correlations between the severity of financial distress and default probability (Campbell et al. 2008; Ofek 1993; Pandit 2000; Smith and Graves 2005).
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com