Expect Corporate Bankruptcies and a Recession This Year

On this week's Stansberry Investor Hour, Dan and Corey welcome their colleague Mike DiBiase back to the show. Mike is the editor of Stansberry's Credit Opportunities and senior analyst for Stansberry's Investment Advisory.  Mike kicks off the episode by discussing the rampant fear in the stock market today. He notes that this fear is not yet reflected in the credit market, which is a "mistake," as credit investors should be more concerned. Mike then talks about the lack of good high-yield bonds out there, corporate bankruptcies being on the rise, the worrying number of zombie companies, the Starbucks recession indicator, consumer confidence hitting a 12-year low, and why he believes things are "not going to end well" for the economy. (1:40) Next, Mike examines the budget-deficit problem and the market's expectation that the government will always bail it out. He highlights the fact that the U.S. has been printing money at an above-average rate the past year and says he believes inflation will spike once more as a result. All of this is part of the "new world" that investors will need to learn to navigate, including permanently higher interest rates, bonds being a better choice than stocks, and an inevitable credit crisis similar to the one from 2008. (21:32) Finally, Mike explains the economic difference between tariffs and inflation, how investors can "make a killing" from what's about to happen, and the many advantages corporate bonds have over stocks – such as it being easier to spot a bottom with bonds. He says he's waiting until credit spreads surpass 1,000 basis points, and then he will deploy his strategy of finding the best bonds out there with the lowest risk of defaulting. (40:22)