On Monday, we released three new research indices tracking distress in U.S. financial markets.   

The indices use Chapter 11 bankruptcy filing data to signal underlying financial distress which may not be reflected in broader stock market averages.  The indices and the full quarterly report can be found at www.distressindex.com.

The “FBT/TrBK Distress Indices” comprise three different measurements based on Chapter 11 filings:

  • The Chapter 11 Distress Research Index tracks overall business bankruptcy reorganization filings.
  • The Real Estate Distress Research Index tracks bankruptcy reorganization filings by single asset real estate businesses (companies owning property such as office buildings, healthcare facilities, retail outlets and multifamily apartment buildings.)
  • The Healthcare Services Distress Research Index tracks bankruptcy reorganization filings by healthcare services companies.

The indices and related analysis will be published quarterly on www.distressindex.com, with the first publication focusing on the level of reorganization filings in each of the index categories during the second quarter of 2014. As likely contrarian indicators of economic performance, the indices are intended to suggest potential health or trouble in the economy: a low index value is likely to occur in a strong economy and a higher value occurs when financial distress is escalating. The indices track the increase or decrease in Chapter 11 filings for prior quarters and years, starting in 2010. To be included in the indices, Chapter 11 filings are required to meet certain criteria, including minimum asset size.