by Don Keelan
Father Paolo Benanti, a Franciscan Friar of the Third Order and a well-respected author and teacher of moral philosophy recently noted in his article, appearing in the Wall Street Journal, “What we cannot predict becomes what we must fear.”
At this moment there are at least a dozen or more external events that are taking place that as a neophyte-bystander, I cannot predict what the final outcome will be. If any one of them goes in the wrong direction an economic downturn, of major portions could follow. Below is just a sampling of six.
And right out of the gate I cannot predict what will be the impact of A.I., on the social, moral and economic foundation to our country. Staying just with the economic aspect for now recalls what Andy Kessler recently noted in the WSJ comparing the hallucinatory investments in A.I and the 1998 financial disaster with Global Crossing.
According to Kessler, in the ‘90’s, GC, securing its position to lay tens of thousands of miles of fiber cable underneath the ocean went public with a $400million in valuation. The then, dot.com stock market went euphoric, GC’s valuation went to $55billion. Then came the competition, AT&T and MCI. And four yeas later, in 2002, Global Crossing filed for bankruptcy, the bubble bursted.
Today, companies that we had never heard of 30 years ago, Anthropic, OpenAI, SpaceX and Alphabet, as well as a dozen others are investing/borrowing not millions of dollars but billions, tens of billions to get ahead of each other and control the forces that will underpin the A.I infrastructure—data centers, electric power generation, and coders. So much is being required that funds for other types of investments are being impacted both in availability and higher interest rates.
With the focus being on the rush to fund A.I., there are other concerns; the amount of credit card debt owed by millions. According to the WSJ’s report on May 30, 2026. The credit card debt is at $1.25trillion, the highest since 1999, when the NY Federal Reserve began keeping count. The interest rate that accompanies such debt generally is 25% or higher.
A close burden to the credit card debt is the debt that belongs to those who had to borrow to get through undergraduate, graduate, medical, and law institutions. Their debt obligations now exceeds $1trillon with an ever increasing percent in default.
What does not receive much attention is the percent of vacant office buildings that are burdened with huge mortgage obligations. Some major cities business districts are witnessing a 25 to 40% vacancy rate. Will owners just turn over their properties to their mortgage lenders?
And then there is the ‘Private Credit Funds,’ where borrowing is done outside the domain of banks. Also referred to as Business Development Company Funds, which lends money at high interest rates along with upfront fees ranging from 1 to 5% of the borrowing. An investor in such a fund may only repatriate up to 5% of their investment annually. Some tried to get back more last year and were blocked. According to Investment Management, the total outstanding borrowings was $3trillion at the beginning of 2025.
I cannot predict what the impact will be with restrictions currently being removed from those who are referred to as Pattern Day Traders. Such trader’s behavior during the dot.com era was impactful and reckless.
The financial and economic experts may try and explain away why the Dow Jones Industrial Average went from 39,000 at Liberation Day in April of 2025 to 51,000 in early June, 2026. The fact is they like the rest of us have never been in an environment of such unpredictability.
There are only a few that control huge investment portfolios of bonds, stocks, commodities, private equities, venture capital and they work with algorithms. They only need to hear one word, whether it be tariffs, war, defaults, assassination, inflation, embargo, or impeachment, the reaction is panic and a sell-off is created that impacts all of us.
Father Benanti noted in his commentary regarding A.I., “ A handful of companies and their investors hold the power. The transformation they are engineering will touch every human being; the decisions about how to engineer them will be made by very few.”
Hopefully, one of the handful will not lite the match in 2027.