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Reading Tea Leaves – And Ripple Effects – Of Corporate Default Risk  

PYMNTS

The scenario comes to mind in the wake of news that default probability risk is increasing among companies owned by private equity firms. The Wall Street Journal reports that such risk is 2.5 That estimation comes from analytics firm Credit Benchmark. times greater than what is seen with public companies.

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Transcript: Rick Rieder

Barry Ritholtz

And because remember, Lehman had the Lehman Agg and that was the benchmark. And you know, it’s really been extraordinary around if you can analyze your risk, anything about optimizing your return, you could build, you know, how do you look at correlations, diversification. There is alpha. Can you manage that through downturns?

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Transcript: Kristen Bitterly Michell

Barry Ritholtz

And so, with this gave me exposure to everything from investment banking to retail, looking at like checking account campaigns, like how do you get more assets in the door to credit risk. BITTERLY MICHELL: … this isn’t a generalization, but they have a higher risk tolerance. They understand currencies. RITHOLTZ: Sure.