What's going on?

Noble Group, the major Asian commodity trading house currently fighting for survival, said it lost almost $5 billion in 2017 � effectively wiping out the value of everything the company owns (at least on paper).

What does this mean?

Noble is a major commodity trader (a speculator in everything from metals to gas) which used to rival the likes of Glencore before falling on hard times after questions were raised about its accounting practices (in short, it was accused of fraud, a charge it has always denied). Last month, Noble proposed giving some of its lenders a 70% stake in itself in return for a partial forgiveness of its debt. Unusually, its current shareholders would also keep 10% of the company � although certain other investors in Noble would face being all but wiped out.

Why should I care?

For markets: Noble�s huge loss may actually help it complete its restructuring plan.

Noble is now, on paper at least, virtually worthless (in fact, its debt far outweighs its �assets�). But this also has the helpful effect of deterring its lenders from asking for more in the proposed restructuring. If there�s nothing left, then those lenders holding out for a better deal don�t really have a strong argument. And so, perversely, the terrible results may make it more likely that the current management is retained and current shareholders end up owning 10% of the new Noble.

The bigger picture: Riskier investments are risky for a reason.

Noble�s proposal is complicated and not guaranteed to be accepted (nor guaranteed to see off any legal challenges) � but as things stand, holders of certain �hybrid� investments in the company are set to receive less than 4% of their money back. These investments were meant to act kind of like a high-interest loan, and were likely purchased by investors looking to increase the income of their portfolio. The lesson? When something offers a high interest rate, there�s often a very good reason.