Monday, January 12, 2009

Dead Men Walking in South Beach

In what is the greatest annual boondoggle in the hedge fund community, the JP Morgan South Beach Conference, this year held February 2-4 in the Loews Hotel, one should be able to spot some very good leading trends of the credit markets for this year. Aside from this being the biggest job fair among the very nervous hedge/mutual fund analyst pool, one will be keeping a close eye on which companies redefine the rhythm method and pull out ahead of their scheduled presentations, presumably to amend bank agreements, shut down plants, or outright file chapter 11 (or 7), and not have to answer compromising questions just ahead of Q4 earnings.

JPM lists 150 overflowing with debt companies participating at the conference, the majority of which make up the HY11 index (which trades at around 1125 bps spread and implies 63% of the companies in it will go bankrupt by March 2014), so for people on a credit death watch, this will likely be a very interesting venue to cast stakes and take coffin measurements.

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