MacroPass: Danielle DiMartino Booth On The Debt-Default Reckoning Lying Ahead

Why Higher for Longer is the biggest nightmare imaginable for credit issuers

This week’s installment (our fifth) of our new MacroPass service for premium members of this Substack comes from Danielle DiMartino Booth, CEO & Chief Strategist for QI Research LLC and publisher of the book Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America.

It’s a recent report Danielle just sent to her private subscriber list explaining why rising default rates on debt buckling under 'Higher for Longer’ interest rates are going to force issuers to restructure.

That’s going to create a cascade of pain for institutional and retail investors, pensions and, especially, private equity AND private credit.

Danielle also rings a warning bell that, due to the risks they now pose to the financial system if they start defaulting, shadow banks have now, too, become ‘Too Big To Fail’.

If you somehow missed our previous announcements, MacroPass is a weekly rotating selection of premium analysis from many of the big thinkers interviewed on Thoughtful Money.

To-date that list of contributors includes experts like Stephanie Pomboy (Macro Mavens), Danielle DiMartino Booth (QI Research), Tom McClellan, Michael Howell (Capital Wars), Darius Dale (42 Macro), Doomberg, Kevin Muir (The Macro Tourist), Alf Peccatiello (The Macro Compass), Lance Lambert (ResiClub), Ed Yardini (Yardini Research), David Hay (Haymaker), Melody Wright (M3_Melody), David Stockman (Contra Corner), David Brady (FIPEST Report), John Rubino and Adam Kobeissi (The Kobeissi Letter). And more are joining each week…

The reports issued so far in this MacroPass series include

• David Hay on the wild action in the Japanese yen

• Kevin Muir on the emerging opportunities in Chinese stocks

• Alf Peccatiello on the growing fragility in credit markets

• Tom McClellan’s excellent April Market Report

If you’re already a premium subscriber to this Substack, just continue below to read this week’s report from Danielle.

And if you’re not (yet), I’m pasting an excerpt of Danielle’s report here. If you like what you see, just upgrade to premium and access the full report, as well as all past and future MacroPass content: