There Will Be No Soft Landing

This is harder than a moon landing... It feels like spring 2008 all over again... Why the financial media won't warn you of the coming catastrophe... The banking crisis is not over... Inflation is not under control... The best way to safely profit... [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [Stansberry Digest] This is harder than a moon landing... It feels like spring 2008 all over again... Why the financial media won't warn you of the coming catastrophe... The banking crisis is not over... Inflation is not under control... The best way to safely profit... --------------------------------------------------------------- Editor's note: Today, I (Corey McLaughlin) am handing things over to Stansberry's Credit Opportunities editor Mike DiBiase, who has put together a special guest essay for all Stansberry Research readers. In short, Mike says the markets look to him a lot like they did in 2008 before the worst of the great financial crisis. He's not buying the "soft landing" narrative... He believes the next "credit crisis" is around the corner and that the time to prepare for it is now. In the following essay, Mike shares his analysis, a warning, and, importantly, a strategy for surviving the next crisis. Many investors never consider this option, which can deliver "stock like" returns with much less risk than equities... if only you know where to look. --------------------------------------------------------------- It was supposed to be America's triumphant return to the moon... On January 8, 2024, NASA launched a Vulcan rocket from Cape Canaveral, Florida. It carried what was to be America's first lunar rover to land on the moon in more than 50 years. The U.S. hasn't been to the moon since 1972 when NASA's Apollo 17 astronauts spent 75 hours exploring the surface. That was the last time men walked on the moon. The unmanned Vulcan mission was part of NASA's Artemis program, which aims to put humans back on the moon by 2026. But just hours after Vulcan's launch, the lunar lander developed a fuel leak that doomed the mission. The lander didn't have enough fuel to make it to the moon and eventually burned up in Earth's atmosphere over the South Pacific. NASA tried again a couple of months later and this time accomplished its goal. Well, sort of... On February 15, NASA launched lunar lander Odysseus, or "Odie" as its engineers dubbed it. The phone-booth-sized lander had to slow its speed by more than 4,000 miles per hour as it descended to the moon's south pole. The landing didn't go as planned... As Odie approached the surface, it drifted sideways. Instead of landing vertically, the 13-foot lander tipped over and landed horizontally on its side. Unable to get up on its own, and with some of its solar panels pointed away from the sun and antennae pointed toward the ground, Odie's mission was limited and cut short. Before running out of power, it sent its final goodbye to scientists and is now permanently asleep. Making a 'soft landing' on the moon is far more difficult than you might think... Last year, Russia's Luna-25 lander – the country's first attempt to land a craft on the moon in 47 years − crashed into the moon and created a new crater. The year before, an unmanned Chinese rocket crashed into the far side of the moon. And just hours after NASA's lander burned up in January, Japan's first lunar lander made it to the moon but hit the ground nose-first. Mankind has made a little more than 50 attempts to land on the moon. The success rate is only 43%. And that includes all six successful manned U.S. missions in the late 1960s and early 1970s. It seems all of our technological advances since then haven't helped much. Why am I (Mike DiBiase) telling you how hard it is to make a soft landing on the moon? Because achieving an economic soft landing is even harder... We use the term "soft landing" in economics because of the moon missions. The phrase made its way into everyday vocabulary in the early 1970s after the Apollo lunar missions. Economists and central bankers have been using it ever since to describe the ideal way to bring an overheated economy back to Earth without a recession. Over the past two years, the Federal Reserve has attempted to keep interest rates high enough for long enough to bring inflation down without causing a recession – in other words, achieve an economic soft landing. But just like with moon landings, navigating economic soft landings is much easier said than done. The only time the Fed was able to do it was in 1994. Every other time it failed... and the economy crashed into a recession. And yet, despite this dismal track record, investors are betting the Fed is going to somehow pull it off again. They're forgetting history. Investors made this same mistake back in 2008. Nearly everyone expected a soft landing back then. Very few saw the last financial crisis coming, despite the many obvious warning signs... In May 2008, the subprime mortgage crisis was well underway. Inflation had risen to more than 4% and consumers were showing signs of distress, just like today. Home sales and prices were falling. Borrowers were defaulting on their mortgages, and millions faced foreclosure. Several small subprime lenders had already declared bankruptcy. But none of that mattered to the Fed and its economists. They had a rather rosy outlook. Ben Bernanke, the Fed's chairman at the time, assured investors there would be no recession. Just a few months earlier, in September 2007, the Dallas Fed had said that U.S. inflation pressures were easing and the economy should manage a soft landing. Janet Yellen, then the president of the Federal Reserve Bank of San Francisco, said, "I think the most likely outcome is that the economy will move forward toward a soft landing." But the bad news kept piling up. Credit continued to tighten. Big banks announced massive losses on their subprime loans. Investors started to worry, and the government really stepped up its efforts to "save" the economy... That's when the Fed began aggressively lowering interest rates, which coincidentally were around the same as they are today. Congress passed a tax rebate bill. The Fed began injecting billions of dollars of liquidity into the financial system, and it bailed out bond dealers and big banks. Dick Fuld, the CEO of investment bank Lehman Brothers, boldly declared in April 2008, "The worst is behind us." Investors believed it. The S&P 500 Index ripped 12% higher into May from its March 2008 lows. But the thing is... some problems are too big for a government bailout to solve... No matter how hard the government and central bankers try to steer the massive economy out of trouble, we still have unavoidable boom-and-bust economic cycles. Over the summer of 2008, regional banks started to fail. In September, Lehman Brothers collapsed. So did Washington Mutual, the nation's largest savings and loan association. The government had to take control of Fannie Mae and Freddie Mac to keep them from going belly up. It bailed out too-big-to-fail borrowers, including American International Group (AIG) along with carmakers General Motors (GM) and Chrysler. Finally, the economic reality set in. By March 2009 − in a span of 10 months − the stock market had collapsed by 53%. And the high-yield bond market melted down 39%. This was no soft landing. It was a full-scale crash. Why am I rehashing this history? Because today, I believe we're in a similar position to May 2008... That's the "We are here" point on the chart below. The stock market is up about 45% since its recent low in October 2022. It's obvious that most folks think the worst is behind us. Earlier this year, Janet Yellen, now secretary of the Treasury, boldly told us that we've already achieved a soft landing. Investors want to believe her. Searches for "soft landing" on Google are higher today than at any time since... you guessed it, May 2008. The chart below shows the relative number of Google searches for "soft landing" since 2005. It is measured on a monthly basis. An index value of 50 means the searches that month were 50% of the maximum number of searches during this period. Take a look... But here's the thing... You can't rely on government officials and the financial media to tell you the truth... Think about it. Did anyone in the mainstream financial media warn us of the most important financial event of the past 20 years, the 2008 financial crisis? No. How can that be? In his 2015 book, The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism, former Wall Street Journal reporter Dean Starkman attempted to answer that question. Starkman explained how the rise of the Internet and search engine Google in the early to mid-2000s sucked away advertising dollars from news organizations. It forced them to make big cuts to their staff. And the quality of their work plunged. As a result, journalism moved away from what he calls "accountability reporting" to "access reporting." Accountability reporting gathers information about powerful people and institutions. Access reporting gets information from them. It's a massive difference. Accountability reporting takes more time and goes much deeper. This type of reporting is more expensive to do. But it was the kind of journalism that gave the media a reputation as a "watchdog." In contrast, access reporting is all about getting the scoop and being first. There's less thinking and analysis. It's more about passing what others are saying on to your audience. This kind of reporting forces the media to maintain close relationships with the elite and powerful. According to Starkman, the shift is why the mainstream media never saw the 2008 financial crisis coming. A study by the Project for Excellence in Journalism analyzed the financial media's coverage of the economy during the first half of 2008... the critical time leading up to the depths of the financial crisis. The study found the vast majority (76%) of the economic stories originated from either New York or Washington, D.C. – the homes of the financial and political elite. That's why nearly all stories had a positive slant. Things have only gotten worse since then. The financial media does little more than pump out fluff stories that serve as a mouthpiece for the elite. Unbiased, independent financial research – like we provide at Stansberry Research − is the only place you're going to get the unvarnished truth. If you think for yourself and understand history and economics, one thing is for sure... There will be no soft landing this time either... I don't know if we'll see the kind of carnage and devastation we saw back in 2008. Every crisis is different. But all signs point to the same thing... We'll soon be in a recession and credit crisis. I believe we'll see a new bear market within the next year. All three of the stock market indicators we use in our flagship publication, Stansberry's Investment Advisory, are bearish today. That rarely happens. One of them − our proprietary Complacency Indicator − just flashed a new warning last month. It tells us that a market correction of 10% or more is coming in the next 12 months. You should take this warning seriously. This indicator predicted 10 out of the last 12 market corrections or bear markets, with only one "false signal." And even that one preceded a market drop of 9%, just shy of 10% to qualify as a correction. Remember, recessions typically only begin after the Fed begins lowering rates. That's what happened in the last financial crisis. The Fed will start lowering rates later this year. In the meantime, I'm seeing all the troubling signs you'd expect to see leading up to a recession. Credit-card debt is rising fast and at an all-time high. Delinquency rates on credit cards and car loans are rising. This is the same thing we saw back in May 2008. And just like back then, I believe... The banking crisis is not over... Banks are sitting on billions of dollars of losses on commercial real estate loans. For years following the pandemic, lenders were waiting for things to return to normal. That meant folks going back to the office in the numbers they were before the pandemic. It's now clear... that's not happening. Many office buildings are still half vacant. We're now starting to see what these buildings are worth. Bloomberg recently reported that office buildings in New York and Los Angeles are selling for up to 50% less than buyers paid a decade ago. In late January, New York Community Bancorp (NYCB) reported a massive increase in its reserve for loan losses that was 10 times higher than analysts expected. Its stock has plunged 70% since then to its lowest level in more than 25 years. This is the same regional bank that bought parts of bankrupt Signature Bank last year. This is only the beginning. The charge was just a tiny portion of NYCB's commercial real estate portfolio, which totals more than $13 billion. I believe NYCB is the first of many regional banks that are in for significant pain this year. Regional banks hold around three-quarters of the $3.1 trillion in outstanding U.S. commercial real estate loans, according to investment bank Goldman Sachs. Expect many more regional-bank failures this year. And that means even tighter credit for individuals and businesses. Meanwhile, inflation is not under control... And it's not going away until we live through the next recession. This is not what folks want to hear. But it's the truth if you understand economics. As [I've written before]( no one understood inflation as well as the late Nobel Prize-winning economist Milton Friedman. As he explained, inflation is caused by one thing and one thing only... a rapid increase in the money supply. The U.S. money supply never increased faster in its history than it did in the two years following the pandemic. It's why we have a sticky inflation problem today. Friedman said the only way to get rid of the scourge of inflation is to persist with a combination of higher interest rates, higher unemployment, higher taxes, and a contraction in credit and the money supply. There's no avoiding it. We've seen higher interest rates. But unemployment is still low, and the money supply is still far too large to bring prices back down to Earth. Let me show you what I mean... Over the past six decades, the money supply has grown annually by an average of around 6.2%. Even though the money supply was contracting for most of 2022 and early 2023, it still has a long way to go to get back to "normal." You can see this in the chart below with the M2 money supply – which includes money in checking accounts, savings deposits, and money-market funds... This is why inflation is not under control yet. The consumer price index increased by 0.4% in March, making for a 3.5% year-over-year gain. Core inflation, excluding volatile food and energy items, also accelerated by 0.4% in March and by 3.8% year over year. In the first two months of the year, the Fed's preferred inflation gauge – the personal consumption expenditures index – showed inflation running at a pace closer to 5% annualized rather than the central bank's 2% goal. The chart also shows that the money supply appears to be increasing again. It has risen in five of the past nine months. This is a troubling sign for folks who think inflation is licked. The trend is likely to continue. The only way our government can realistically fund its ballooning budget deficits is by printing even more money. Investors are ignoring basic economics. Inflation and higher interest rates won't subside until we see real economic pain and a steady contraction in the money supply. Now, there are lots of ways you can prepare... You could buy only the highest-quality companies or allocate a portion of your portfolio to gold. These are good ideas. But there's also another strategy you've probably never considered... It's a strategy that the world's best investors use in times of crisis to make a fortune – but that many folks in the market overlook or never learn about. I'm talking about investing in distressed corporate bonds. You see, when the next credit crisis unfolds, bond prices are going to plummet. Even corporate bonds that are safe are going to trade for pennies on the dollar. That's when you can earn massive, stock-like returns with investments that are much safer than stocks... Bonds offer bigger returns the cheaper they get, and corporate bonds have legal protections that stocks don't have. Companies must pay you or go bankrupt. This is why I say this strategy is the safest and best way to prosper from the next crisis... and why you don't need to fear what's to come. The tough times ahead will create one of the best opportunities of the next decade for astute investors who know where to look. In our Credit Opportunities newsletter, my colleague Bill McGilton and I focus on corporate bonds. Since launching Credit Opportunities in November 2015, we've closed 63 positions with a win rate of 81%. The average annualized return of all closed positions is 10%. That's not a bad return from "boring" investments that are much safer than stocks. But we've really shined during credit crises. That happened twice... once right after we launched our bond newsletter in 2015 and again during the first few months of the pandemic. We booked an average annualized return of 36% on five recommendations – all winners – in 2015. And we booked an average annualized return of 59% on eight recommendations during the onset of the pandemic (before the Fed stepped in with its massive stimulus efforts, which helped create the inflation that we have today). Now, buying corporate bonds might sound daunting. But Bill (a former corporate lawyer who scrutinizes all the legal documents) and I have shown thousands of subscribers how to do it over the years, much like you would buy shares of a stock. Bill and I do the work for you, identify the best investments, and walk you through how to buy them. But you don't want to wait until the crisis starts to learn how to do it, but before. Now is the perfect time. [Click here to learn more]( starting with a story of how one of our subscribers used this strategy to retire early at age 52... and why he says that, because of it, he won't be worried about another market crash ever again. You'll also hear how you can access three of my top bond recommendations right now – and get started putting them to work. The Market Is Still Sideways In this week's Diamond's Edge, Ten Stock Trader editor Greg Diamond discusses the potential market impact of multiple catalysts – including mounting tensions in the Middle East, sticky inflation, and upcoming earnings reports – and how stocks haven't yet reacted much. As a Digest reader, you get the first look at Greg's new Diamond's Edge video each Monday. For more free videos, [check out our YouTube page](... And, if you're interested in more research and analysis from Greg, [click here for information]( on how to get started with a subscription to his Ten Stock Trader advisory. --------------------------------------------------------------- Recommended Links: [100X Potential Recommendation Goes Live at 5 p.m. Eastern Time Tomorrow]( The man who has booked more 1,000% gains than anyone else at our firm just met with a former Nvidia engineer. He pointed him to a tiny investment that could make you 100 times your money if you get in now. It's "like buying Nvidia for pennies," he says. [He's posting the ticker tomorrow at 5 p.m. Eastern time](. --------------------------------------------------------------- [BREAKING NEWS: A Global GOLD LOCKDOWN Is Now Underway...]( All over the world, vaults are being emptied out by financial insiders. And soon, you may not be able to purchase gold at ANY PRICE – period. Forty-year market veteran and former Goldman Sachs Vice President Dr. David Eifrig reveals what is happening behind the scenes in the gold market and [what you must do immediately to prepare](. --------------------------------------------------------------- New 52-week highs (as of 4/12/24): Alpha Architect 1-3 Month Box Fund (BOXX) and Enerplus (ERF). In today's mailbag, yet more feedback on the bridge collapse here in Baltimore, which has been a hot topic in our mail the last few weeks... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com. "I have a hard time believing that the structural integrity of the bridge was actually in place when the authorities said after the collapse that the bridge had PASSED its latest safety inspections. Yeah! Maybe with a grade of D minus! Anyone who has read or heard about the conditions of the bridges and roadways in our country knows that they are barely passing these inspections. Seems to me just another way to keep the blame on something or someone else! "I myself do not want to use bridges or tunnels for fear it would collapse or, in the case of tunnels, end up full of water. Perhaps this event will help to prompt our governments to take action and get our infrastructure back to a better and safe place rather than argue who will pay for what like is happening now. It's disgusting that money seems to take the place over human lives. Unfortunately, it takes these disastrous situations to make lives a priority." – Stansberry Alliance member Karen T. Regards, Mike DiBiase Atlanta, Georgia April 15, 2024 --------------------------------------------------------------- Stansberry Research Top 10 Open Recommendations Top 10 highest-returning open stock positions across all Stansberry Research portfolios Investment Buy Date Return Publication Analyst MSFT Microsoft 11/11/10 1,375.1% Retirement Millionaire Doc MSFT Microsoft 02/10/12 1,340.6% Stansberry's Investment Advisory Porter ADP Automatic Data Processing 10/09/08 885.7% Extreme Value Ferris WRB W.R. Berkley 03/16/12 749.7% Stansberry's Investment Advisory Porter BRK.B Berkshire Hathaway 04/01/09 615.0% Retirement Millionaire Doc HSY Hershey 12/07/07 456.0% Stansberry's Investment Advisory Porter AFG American Financial 10/12/12 445.5% Stansberry's Investment Advisory Porter TT Trane Technologies 04/12/18 376.4% Retirement Millionaire Doc NVO Novo Nordisk 12/05/19 350.9% Stansberry's Investment Advisory Gula TTD The Trade Desk 10/17/19 346.5% Stansberry Innovations Report Engel Please note: Securities appearing in the Top 10 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the model portfolio of any Stansberry Research publication. The buy date reflects when the editor recommended the investment in the listed publication, and the return shows its performance since that date. To learn if a security is still a recommended buy today, you must be a subscriber to that publication and refer to the most recent portfolio. --------------------------------------------------------------- Top 10 Totals 5 Stansberry's Investment Advisory Porter/Gula 3 Retirement Millionaire Doc 1 Extreme Value Ferris 1 Stansberry Innovations Report Engel --------------------------------------------------------------- Top 5 Crypto Capital Open Recommendations Top 5 highest-returning open positions in the Crypto Capital model portfolio Investment Buy Date Return Publication Analyst wstETH Wrapped Staked Ethereum 12/07/18 2,291.8% Crypto Capital Wade BTC/USD Bitcoin 11/27/18 1,683.6% Crypto Capital Wade ONE/USD Harmony 12/16/19 1,188.4% Crypto Capital Wade MATIC/USD Polygon 02/25/21 825.4% Crypto Capital Wade CVC/USD Civic 01/21/20 444.1% Crypto Capital Wade Please note: Securities appearing in the Top 5 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the Crypto Capital model portfolio. The buy date reflects when the recommendation was made, and the return shows its performance since that date. To learn if it's still a recommended buy today, you must be a subscriber and refer to the most recent portfolio. --------------------------------------------------------------- Stansberry Research Hall of Fame Top 10 all-time, highest-returning closed positions across all Stansberry portfolios Investment Symbol Duration Gain Publication Analyst Nvidia^* NVDA 5.96 years 1,466% Venture Tech. Lashmet Microsoft^ MSFT 12.74 years 1,185% Retirement Millionaire Doc Inovio Pharma.^ INO 1.01 years 1,139% Venture Tech. Lashmet Seabridge Gold^ SA 4.20 years 995% Sjug Conf. Sjuggerud Nvidia^* NVDA 4.12 years 777% Venture Tech. Lashmet Intellia Therapeutics NTLA 1.95 years 775% Amer. Moonshots Root Rite Aid 8.5% bond 4.97 years 773% True Income Williams PNC Warrants PNC-WS 6.16 years 706% True Wealth Systems Sjuggerud Maxar Technologies^ MAXR 1.90 years 691% Venture Tech. Lashmet Silvergate Capital SI 1.95 years 681% Amer. Moonshots Root ^ These gains occurred with a partial position in the respective stocks. * The two partial positions in Nvidia were part of a single recommendation. Editor Dave Lashmet closed the first leg of the position in November 2016 for a gain of about 108%. Then, he closed the second leg in July 2020 for a 777% return. And finally, in May 2022, he booked a 1,466% return on the final leg. Subscribers who followed his advice on Nvidia could've recorded a total weighted average gain of more than 600%. --------------------------------------------------------------- Stansberry Research Crypto Hall of Fame Top 5 highest-returning closed positions in the Crypto Capital model portfolio Investment Symbol Duration Gain Publication Analyst Band Protocol BAND/USD 0.31 years 1,169% Crypto Capital Wade Terra LUNA/USD 0.41 years 1,166% Crypto Capital Wade Polymesh POLYX/USD 3.84 years 1,157% Crypto Capital Wade Frontier FRONT/USD 0.09 years 979% Crypto Capital Wade Binance Coin BNB/USD 1.78 years 963% Crypto Capital Wade You have received this e-mail as part of your subscription to Stansberry Digest. If you no longer want to receive e-mails from Stansberry Digest [click here](. Published by Stansberry Research. You’re receiving this e-mail at {EMAIL}. Stansberry Research welcomes comments or suggestions at feedback@stansberryresearch.com. This address is for feedback only. 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