The Great Default Cycle Has Started

"This default cycle has now begun and we're going to be seeing more defaults in the near future and the biggest reason for this is not surprisingly the higher interest rates."

"The default rates for credit cards and auto loans have begun to rise."

"if interest rates stay higher for longer which is what they predict that means that we would continue to see an uptick in credit card defaults and autoone defaults which would hurt the general economy."

"as the Federal Reserve Bank raised interest rates over the last 18 months along with that bankruptcy filings also pushed higher."

"as interest rates started to go up that meant the money flowing into these types of companies that are losing money started to go down and now if you're a company that's not making money that's actually bleeding cash and you can no longer get that outside money you can no longer get the debt you can no longer get the investment money that makes it much more difficult for you to continue your operations."

"the amount of distressed loans out there meaning companies struggling to pay their debts off has been rising and has risen quite a bit since 2021."

"in the coming 12 to 24 months as we start to see more of this commercial real estate debt come due for readjusting if you are an office landlord and your building is not producing much revenue but then your costs rise not just because of inflation but because your debt servicing costs are higher because interest rates are higher that means now you're not making enough Revenue as it is but now your expenses go up which could lead to more default issues."

"if we're starting to see less money in the economy because the Federal Reserve Bank is reducing their balance sheet they're trying to shrink the amount of dollars in circulation to fight inflation that can make borrowing a little bit more difficult because if there's less dollars out there it could be more difficult for corporations to go out and find more dollars."

"we're entering an environment with tighter credit conditions meaning it'll be more difficult for people and corporations to go out and borrow money because credit is tighter there's less dollars out there."

"there isn't as much good debt out there as there was before."

"ever since the early 2022 is when the Federal Reserve Bank started raising interest rates the amount of negative yielding debt in the world has fallen significantly."

"because of the higher interest rates what Apollo Management is saying is that it is easier for you to get a positive return by lending your money because the interest rate that you can get now through some of these lending Investments are higher than what inflation is."

"today in the 2020s we are seeing a lower debt to equity ratio than really ever before."

"now with this higher interest rate environment that creates more lending investment opportunities."

"if they keep interest rates higher for longer then that creates more debt investment opportunities."

"our economy isn't as strong as you might think."

"the new regime of Greater macro and Market volatility has resulted in greater uncertainty and dispersion of returns."