Among the many facts of life in financial markets is that today's disaster is tomorrow's money-making opportunity-if, that is, your timing is right.
Consider Brady Bonds and a new predictive model from J.P. Morgan that helps owners better time their purchase and sale. Devised by former Treasury Secretary Nicholas Brady, the bonds were basically Chapter 11 for nation states-the 1990 refinancing solution to the enornmous sovereign debt problem created by the U.S. bank's efforts to solve the problem of the Real Estate Investment Trust crash of the '70s. The problem for Bradys, issued to ten countries that pay coupons ranging from eight to 19.43 percent, is that they have call features based on asset values, which reduce their value. Luckily, most Brady countries' credit ratings are still lower than the trigger.