Debt Wall Looms: Billionaire Warns of Corporate America Impact

• Billionaire investor Chamath Palihapitiya is warning that a “massive debt wall” is about to hit Corporate America and could incinerate equity values.
• Palihapitiya predicts this will create opportunities for those with capital on the sidelines to act as buyers and recap the best of these companies.
• He believes interest rates are likely to remain higher than expected due to China printing money through quantitative easing.

Billionaire Investor Warns of Coming ‘Debt Wall’

Billionaire investor Chamath Palihapitiya is warning that a “massive debt wall” is about to hit Corporate America, which could have dramatic consequences for equity values. The Social Capital CEO and early Bitcoin investor took to Twitter to caution his 1.6 million followers of the looming issue.

Pressure On Companies

Palihapitiya explains that a ‘debt wall’ describes how much debt is due at various times, and if there’s a lot coming due at once, it puts immense pressure on companies. He believes private equity firms may suffer acutely since their business model involves wrapping their companies in high yield debt.

Opportunities For Capital Investors

Palihapitiya sees potential opportunities for those who have capital on the sidelines to act as buyers and recapitalize the best of these troubled companies when they inevitably go bankrupt in the fall.

Interest Rates To Remain High

The billionaire investor also expects interest rates will stay higher than most people would like for longer than they would like due to China cutting its own rates in order stimulate its economy through quantitative easing (QE). He says Fed Reserve Chair Jerome Powell was predicting this outcome when he spoke recently on the matter.

Pay Attention To Market Developments

Palihapitiya concludes by urging investors to pay attention closely so they can benefit from any market developments that come up. With corporate bankruptcies predicted for later this year, he emphasizes there will be lots of money available if you’re paying attention