For all talk of change since the Great Financial Crisis, there has been practically none, which also applies to the investing behavior of supposedly sophisticated credit investors. Yes, they may be far more focused on "capital preservation" instead of ruinously betting it all on red or black (believing in momentum, "story stocks", dartboards and "1 in 10 homerun is enough") as equity investors are seen by the credit world, but just like during the peak days of the last credit bubble, debt investors would rather someone else do the actual work. Someone such as the much despised, humiliated and mocked rating agencies for example. Which is why the Top 5 Most Viewed issuers block on the Moody's website [7]provides a treasure trove of information about what the "crowd" is most concerned and worried about.
Not surprisingly, Detroit is the most recent entrant into this category. However, at number three it is still behind perennial top spot holder, and the firm with the largest nominal gross derivative exposure [8]in the world (if rapidly deleveraging [9]) Deutsche Bank. Barclays is a recent runner up having displaced perennial distressed bank name Credit Agricole. That the "other" French bank BNP rounds up the rankings is no surprise. However, perhaps most curious is that to the credit world, it is a rapidly rising Chicago that has become the biggest threat to "capital preservation."
Why? Perhaps the article we posted last week on just this topic, i.e., "Chicago Next? Windy City Cash Balance Plummets To Only $33 Million As Debt Triples [10]" may have something to do with it...