Debt as a percent of nominal GDP has approached a 30-year high (yellow line), while defaults are hovering at all-time lows (green line). Why does that matter to you? Over the last three decades debt accumulation tended to occur several quarters before the default rates began to accelerate. This setup, illustrated in the chart, indicates that a large amount of defaults in the debt market are set to occur again. That historically leads to an increase in interest rates which can have a negative impact on the stock market and other risk assets. Sincere thanks go out to Rodd Mann, who shared the chart with us.