Will Defaults Rise Along With Interest Rates in 2015?

The video discusses structural issues in various industries, focusing on the oil and gas sector's distress and restructuring. It highlights the role of credit default swaps and derivatives, which create perverse incentives for investors. The discussion extends to financial engineering and its impact on bankruptcy processes. The video concludes with potential future economic implications, considering interest rates, global growth, and the rising dollar's effect on U.S. exporters.

What is a key reason why oil and gas exploration companies are experiencing distress?

• High interest rates

• Structural issues

• Lack of investors

• Government regulations

What role do opportunistic investors like Blackstone play in restructuring?

• They focus on court protection

• They provide lifelines to distressed companies

• They increase default rates

• They discourage restructuring

How do credit default swaps create challenges for restructuring bankers?

• They eliminate the need for court protection

• They create perverse incentives for investors

• They align the interests of all creditors

• They simplify the restructuring process

Why might some companies not be eligible for credit default insurance?

• They are too diversified

• They are too small

• They have too much cash

• They are too risky

What is a potential consequence of a rising dollar for U.S. companies?

• Higher oil prices

• Lower interest rates

• Decreased export competitiveness

• Increased profitability

What factor is NOT a primary driver of defaults according to the transcript?

• Economic downturns

• Credit default swaps

• Looming maturities

• Higher interest rates

What might happen if economic growth reverses, according to the transcript?

• Interest rates will decrease

• The Fed will pump more liquidity

• Oil prices will rise

• Export-driven companies will thrive