AdvancedMAD Academy0:46Fixed Income

Default Is Not Zero

A default is a missed payment rather than a total loss, and what a holder gets back depends almost entirely on where they sat in the queue.

0:46 · 6 scenes

This lesson is part of a MAD Academy plan.

What the Lesson Covers

  1. 0:00A bond defaulting does not mean the holder gets nothing.
  2. 0:05What default means. A missed payment or a breached covenant. It starts a process rather than ending one.
  3. 0:14Recovery by seniority. Where you sat in the queue decides almost everything about what comes back.
  4. 0:24The correlation problem. Defaults cluster in recessions, which is exactly when recovery values are lowest.
  5. 0:33The expected loss. Probability of default times one minus recovery. Both halves matter equally.
  6. 0:41Check the seniority, because it decides the recovery.
MAD AcademyYou hold No active plan

This section is part of MAD Academy

The whole course, with live boards to practice on. Learn the market properly.

What Academy includes

  • Every training video the plan opens, all 305 lessons across 20 subjects
  • A Start Here path for newcomers, and every subject's lessons in order from Foundations to Advanced
  • Your progress, your trophies and your next lesson, tracked on your own Academy home
  • Every concept guide, all 24 trading set-ups and the 151-term glossary
  • The real-time Market Dashboard, Premium Scanner and Pro Charting, on the same feed every member plan reads
  • Heatmap and sectors, inside the member platform with your lessons rather than beside it
  • Unlimited watchlists, in the drawer on every tab and on the scanner and chart
  • The real-time Market News Feed, narrowed to your own watchlist in one click

Not included

  • No premium alerts, MAD Setups, alert archive or performance record
  • No personalized dashboard: My Dashboard starts at Analysis Tools Only
  • No research desk: Corporate Events and Institutional Ownership start at Analysis Tools Only
  • No product tutorials or Deep-Dives, which come with Premium Membership
  • No MCP Connector: connecting an AI app starts at Analysis Tools Only

Add MAD Academy

$39per month

or $279 per year (about $23.25 a month)

Start MAD AcademyPay yearly instead

Or get both

Premium Membership

$0for 5 days

then $149 per month, or $1,099 per year. Tools and Alerts together cost $188 a month bought separately.

Start 5 days free

Card required. After 5 days it is $149 per month or $1,099 per year until you cancel. First-time members only.

Compare every plan on the pricing page
Educational content only. MadStockAlerts provides market commentary, research, and educational content. It is not personalized investment advice, and nothing here is a recommendation to buy or sell any security. Trading and investing involve substantial risk, including loss of capital. See the Risk Disclosure and Customer Agreement.
Educational content only. MadStockAlerts provides market commentary, research, and educational content. It is not personalized investment advice, and nothing here is a recommendation to buy or sell any security. Trading and investing involve substantial risk, including loss of capital. See the Risk Disclosure and Customer Agreement.
Default Is Not Zero — MAD Academy Training Video · MadStockAlerts