AB Disruptor Series: How Much Is Too Much? $31 Trillion Reasons to Understand the Debt Problem
Tuesday, March 21, 2023
1:00 PM EDT | 10:00 AM PDT
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Don’t Miss the AB Disruptor Series—$31 Trillion Reasons to Understand the Debt Problem
Past battles over the US debt ceiling have ultimately been settled—sometimes at the 11th hour. But the current political climate and pandemic-related debt surge leave many investors with not-so-fond memories of the 2011 ratings downgrade—and wondering about the implications of outright default.
The common wisdom may say that the impasse will be worked out because the cost of failure is steep, but at the center of the debate two key questions always emerge as markets monitor the give-and-take: How much debt is actually too much? And what happens when a country reaches that point?
In the latest installment of the AB Disruptor Series, Unpacking the Debt Problem, Rick Brink, AB’s Chief Market Strategist, and an expert panel will start with a deep dive into the US debt-ceiling discussions and then look more broadly at the debt question both here and around the world.
Key topics will include:
- How the US debt ceiling came to be and evolved over time, the government’s playbook to slow the march toward potential default, and what that default could ultimately mean for the US and the rest of the world.
- How much debt is too much—and do debt levels really matter? We’ll compare debt levels to debt service, examine the notion of “outgrowing” debt, and explore the key role of inflation—through both developed- and emerging-market lenses.
- The near-term market implications will feature twists and turns. In the long run, some impacts of the resolution will be direct—rates, currencies and valuations—and others less so. And who pays for all this? The answer will have major ramifications for future portfolio construction.
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Rick Brink, CFA
Chief Market Strategist
Richard A. Brink is a Senior Vice President and Chief Market Strategist in the Client Group. Previously, he served as a managing director in the Alternatives and Multi-Asset Group. Prior to that role, Brink was a senior portfolio manager in Fixed Income, and before that an investment director for fixed-income investments within the Global Retail Investments Group. Before joining AB in 2004, he was senior product manager at the Dreyfus Corporation, covering both retail and institutional fixed-income offerings. Brink was previously a senior trainer, dealing primarily with the design and delivery of product training to financial advisors and mutual fund sales representatives. He holds a BS in applied mathematics and economics from Stony Brook University, and is a CFA charterholder. Location: New York
Director—Developed Market Economic Research
Eric Winograd is a Senior Vice President and Director of Developed Market Economic Research. He joined the firm in 2017. From 2010 to 2016, Winograd was the senior economist at MKP Capital Management, a US-based diversified alternatives manager. From 2008 to 2010, he was the senior macro strategist at HSBC North America. Earlier in his career, Winograd worked at the Federal Reserve Bank of New York and the World Bank. He holds a BA (cum laude) in Asian studies from Dartmouth College and an MA in international studies from the Paul H. Nitze School of Advanced International Studies. Location: New York
Adriaan du Toit
Director—Emerging Market Economic Research; Senior Economist—Africa
Adriaan du Toit is a Senior Vice President and Senior Economist for Africa. He also leads AB’s team of emerging-market economists. He joined AB in 2017 as a Sub-Saharan Africa economist. Prior to joining the firm, Du Toit was a Sub-Saharan Africa currency and rates strategist and director at Citigroup in Johannesburg, where he worked from 2013 to 2017. Between 2007 and 2013, he held three roles at Standard Bank in Johannesburg (rates analyst, head of Macro Research and fixed-income strategist). Du Toit started his career in 2004 as an economist at the South African Reserve Bank. He holds a BCom (Hons) in economics and an MCom in econometrics (cum laude), both from the University of Pretoria in South Africa, and an MSc in financial economics from the University of Oxford. Location: London
Trader; Head—Global Rates, Securitized Assets, Multi-Asset and Currency Trading
Matthew Scott is a Senior Vice President and Trader, and Head of AB’s Global Rates, Securitized Assets, Multi-Asset and Currency Trading teams. In addition to managing these teams, he has been a trader since 2007 and currently focuses on trading interest-rate and inflation derivatives, government bonds (including US Treasury Inflation-Protected Securities) and securitizations. Scott previously worked as a portfolio assistant for high-grade bond portfolios and held numerous roles in derivative investment shared services. He holds a BS in finance and an MBA in finance, both from Seton Hall University. Location: New York