Oct 16: Prof Edward Altman discusses distressed debt returns

Edward Altman, the Max Heine Professor of Finance at NYU's Stern School of Business, says the only way to make money is to go short the credit of companies in trouble through the credit default swaps market. Being long distressed debt has caused quite significant losses. So far, the NYU's index is down 33 per cent this year for defaulted bonds and 16 per cent for defaulted loans. It is close to being the worst-ever year for defaulted bonds.