When things get bad, someone somewhere sees an opportunity to make money. Prices of distressed assets look cheap. But that does not mean they cannot get even cheaper.

The sale of $750m (£493m, €551m) worth of 10-year notes for a unit of Harrah Entertainment, the largest US casino operator, was priced initially in 2006 at about $99. Then came the credit crisis. Problems in the economy took their toll on gambling revenues. Harrah’s, which in 2008 was bought by a private equity company, began to post losses. By early November 2008, the notes traded at $19. That probably seemed like a bargain to some investors. Or, it did until early March when the notes were quoted at a price of just over $4.