Soaring Debt Levels Pose Major Threats to Economy and Markets

U.S. government debt has exploded to nearly $34 trillion and poses an existential threat long-term. Interest costs will balloon as rates rise.

Corporate debt levels are still high. Refinancing at higher rates will pressure margins and earnings.

Commercial real estate debt is most acute near-term issue. Spiking delinquencies and plunging valuations point to wave of foreclosures.

Regional banks very exposed with 30% of CRE debt. More bank failures likely.

Debt hangover an unpriced risk. Recession likely in 2024. Short-term treasuries offer safe haven.