In This Episode

Buck Sexton and Porter Stansberry discuss historical stock returns, the economics of AMZN and NFLX, and today’s growing consumer credit crisis in student debt, auto loans, and agriculture. Porter gives you three reasons why the next bubble could be bigger than anyone thinks.


Transcript

Male: Broadcasting from Baltimore, Maryland and New York City, you’re listening to the Stansberry Investor Hour.

[Music]

Tune in each Thursday on iTunes for the latest episode of Stansberry Investor Hour. Sign up for the free show archive at investorhour.com. Here are the hosts of your show, Buck Sexton and Porter Stansberry.

Buck Sexton:

Hey, everybody. Welcome to the Stansberry Investor Hour. A new show we plan to educate listeners about investing, economics and business. We’ve got, of course, the man himself, Porter Stansberry. Porter, say hi to everybody.

Porter Stansberry:

Hi, everybody.

Buck Sexton:

And Buck Sexton here with you now. We’re gonna be covering big picture issues on the market, the economy, politics, geopolitics, national security and just some fun stuff that we want to throw into the mix for your listening enjoyment. Might even be tackling some of your emails and comments later on in the show. But first, Porter, give everybody your big picture. What’s going on in the market right now? What’s happening with the economy?

Porter Stansberry:

Well, there’s a lot to talk about. There’s some big problems in the credit markets that I want to detail for everybody. But before I get to the dollars and the cents and the numbers, I think we should also just take a minute to recognize Buck Sexton. Buck, you’re new to the Stansberry research world. And a lot of our subscribers and a lot of our listeners may not be familiar with you. And Buck, if you’d take a minute just to let us know a little bit about ya. I know that you are a former CIA officer. That you’ve been around the world serving our country. And I know you live in New York City today and you started a big career with a number of different media companies. So you’re sort of an expert in this space where we are genuinely amateurs in terms of media and broadcasting. Can I ask you a starter question? Which is did you go to one of those radio schools at night to advance your career?

Buck Sexton:

Well, you’re expert enough to actually make sure that I explain to our audience who I am. So you have points on the board already whereas I wanted to jump right into the meat without letting anybody know who is this guy.

Porter Stansberry:

Cause I went to the truck driving school to learn how to be a stock analyst. And I wondered if you had a similar experience.

Buck Sexton:

I fell into media. So I grew up here in New York City. Born and raised. Went to Regis High School, which anyone in the Stansberry extended family who’s familiar with New York may know Regis. Went to Amherst College. Went into the Central Intelligence Agency right out of Amherst. Served in the counterterrorism center in the Iraq office. Spent time in Iraq. Spent some time in Afghanistan. Came back, went to the NYPD’s intelligence division for counterterrorism for about a year. And then, Porter, I wanted to actually make a little money, so I decided I was gonna leave government service and go to business school. I was in to business and at the very last minute, I mean weeks before starting, I got a very out of nowhere email from a woman who would turn out to be the president of The Blaze, which was Glen Beck’s media venture. They hired me pretty much on the spot. And from there I began writing, doing TV, a lot of TV, and then doing a lot of radio. And now I am a nationally syndicated radio host on over 100 stations with Premiere Radio Networks. Buck Sexton with America Now is the name of the show.

Porter Stansberry:

And let’s not forget, you’re also on the Stansberry Research podcast. Clearly the highlight –

Buck Sexton:

Well, yes, of course.

Porter Stansberry:

The highlight of any media star’s career. Well, we are very –

Buck Sexton:

When people ask me they say, what’s your favorite part of doing media? I said, well, filling in for Rush Limbaugh as one of his official fill-ins on radio and the Stansberry Investor Hour, of course, sir.

Porter Stansberry:

Yes. And getting to talk with Porter Stansberry. What could be finer than that? Well, we definitely appreciate your time and your willingness to help us out in this effort. And we hope that as we try to be a little more professional in this stuff, we’ll attract a larger audience. And if you’re a new listener to Stansberry Research, maybe you came to us because you heard that Buck was gonna be on our show. We’re glad to have ya. Just a couple points of reference. We are an independent financial research firm. We have about a million paying subscribers around the world. People in more than 150 different countries read our financial work. And very importantly, we are not in the banking business. We don’t manage money. We don’t make a maker in any of these stocks or products. And we don’t allow our writers to own any of the securities that they write about. The reason we have that policy is because we want to represent to you that we have zero conflicts of interest. Our only form of income is subscription. This podcast, as you’ll probably note, is free. And we hope that you’ll take an interest in our work and find that it’s superior to what you’ve been getting from your mutual fund, your hedge fund or your broker.

And so with that, let’s kick something off here. Buck, I think you’ll think this is quite surprising.

Buck Sexton:

Ooh.

Porter Stansberry:

Yeah. Here’s a little paradox of finance. Which is something that I am fascinated by. So since 1928, so this is over the very long term, stocks on average have made a little over 9 percent a year. Okay. So if you happen to live for 90 years and you invested in stocks every year you’ve done pretty well. And that compares to a couple of your other choices that you have. So for example, you had long term government bonds as a choice. Those are known as ten year treasury bonds. And those have returned about 5 percent.

So, look, I’m a big believer in rounding. Because any time you try to get too specific about what happened in the past you’re probably fooling yourself cause a) the data’s not that reliable, and the second thing is any time you try to get really granular with what your expectations are you’re definitely fooling yourself because the future is not going to be just like the past. So let’s call it 10 percent in stocks, 5 percent in bonds. And about 3 percent a year in very short term treasury bills. So this is three month paper that you’d roll over every 90 days. Make sense to you? Because right, you’re a long term investor, you’re taking more risk, you get more return. Ten year investor you’re getting 5 percent. Three month investor you’re getting 3 percent. It makes sense. And that data, by the way, is – I mean that’s been audited and tested and run through the washing machine. It’s very reliable. I don’t question that data.

So knowing that’s true, I think you’ll think this is pretty surprising. Did you know that while stocks on average have beat bonds by a mile, they almost doubled the return, 9 ½ compared to 5 percent, about 60 percent of individual stocks have failed to outperform one month treasury bills over their lifetimes?

Buck Sexton:

That is surprising.

Porter Stansberry:

This is one of the paradox. When people start telling you you should plan your financial life according to finance or history. You gotta really make sure you understand what they’re saying. So while it’s true that on average stocks have outperformed treasury bills and treasury bonds even, the average stock didn’t. Does that make sense?

Buck Sexton:

What you’re saying makes sense, yeah.

Porter Stansberry:

So in other words, if you just were to go randomly go buy a stock, your most likely expected return would be inferior to a treasury bill. To a three month treasury bill. And so one of the things that I’m passionate about at Stansberry Research is helping people overcome those horrible odds. And now there’s a math guy out there who’s going, well, how could that possibly be? How could the average be so much higher but 60 percent of the stocks don’t beat the treasury bills? Well, the answer, of course, is that there outsized returns in very small numbers of companies. And this is a mind-blowing fact.

There’s a guy at the Arizona State University, Dr. Hendrik Bessembinder. And Bessembinder studied all this data. Which is in a database that the University of Chicago built and researchers all use the same database. So the numbers are pretty good. What he found is that there are only 4 percent of the stocks in the entire market accounted for all of the net market returns from 2006 to 2015. So in other words, you had to be invested in one of four out of 100 companies to earn a substantial return in stocks. And the lion’s share of those returns are found in just four companies. Exxon Mobile, Apple, General Electric, Microsoft and IBM.

So as you call your broker today, you might want to ask yourself, do you think I’m really capable of picking one of the four out of 100 stocks that’s gonna over time eat up all the returns in the market? And as an example of that, let’s take a look at what happens when a disruptor comes along. Buck, you buy anything from Amazon.com?

Buck Sexton:

Oh, all the time. I love Amazon Prime. I use it instead of leaving my apartment to get toothpaste. I’m one of those lazy people.

Porter Stansberry:

Well, so in the last ten years the stock of Amazon, I’m sure you know, is up 2,300 percent. But what’s interesting is there isn’t a major retailer whose stock is up over the last ten years. So Sears is down 96 percent. JC Penney is down 91 percent. Kohl’s is down 73 percent. Macy‘s is down 64 percent. Best Buy down 50 percent. And Target down 43 percent.

So in other words, if you’re an investor in the entire retail space and you didn’t own Amazon, you probably haven’t made any money at all on a net basis over the last ten years. And that’s our challenge, Buck, as equity analysts and as portfolio managers and as people who were in the media advising folks what to do with their money.

I get criticized a lot and, Buck, as you hang out with me more and more you’re gonna see this. I get criticized all the time for being the boy who cries wolf. I’m constantly warning about what might go wrong. Because investment survival is really difficult. First of all, you gotta look for the 4 percent of the companies that are gonna be successful over the long term. And then you gotta avoid the 96 percent that are gonna crush you if you end up owning them. And that’s not even to mention all the harebrained stuff that we’ve got going on right now in our economic policies and our central bank’s buying index funds and problems in consumer credit.

But let’s talk about the big current event I think in the market, which is that consumer credit really rolled over in the last 30 days or so. So let’s talk about – Buck, will you tell our listeners, if it’s not too personal, how old you are? I know you have some professional experience. You worked for the government in a couple different capacities. So you must be, what, in your early 30s?

Buck Sexton:

Yeah, I’m 35. Relatively soon to be 36. It makes it sound like I’m, you know 35 and a half or something. I’m 35. By the way, your point about stocks made me think about government employees. We used to always joke that about 10 percent of the employees did 90 percent of the work. So in the stock market there’s a similar dynamic.

Porter Stansberry:

Yeah. Yeah.

Buck Sexton:

Gotta get a very small number of stocks, the ones responsible for a lot of gain.

Porter Stansberry:

And, you know there’s been a lot of management studies about -that’s called Pareto’s law. The 20/80 rule. And the interesting thing I think about that is the 80/20 rule is like the Russian dolls. It applies inside that. So if you look at the 20 percent or the 10 percent of the people that are doing 80 percent or 90 percent of the work, that law applies to those 20 percent as well. So you go inside the 20 percent that’s doing all the work and there’s another 10 or 20 percent of people inside that smaller pool that’s doing 80 percent or 90 percent of the work inside that pool.

And I don’t think people really, I don’t think social science has really figured out why this is or why these kinds of pyramids of value creation and effort and wealth occur, but they certainly do. And you have to be on the right side of it.

But let’s talk about student loans for a minute. I think this is probably a subject that Buck knows more about than most of our listeners given his age and experience. Now, Buck, you said you didn’t end up attending business school. If you had, were you planning on financing that endeavor with loans?

Buck Sexton:

It’s funny you ask. That was the decision, I mean the whole value proposition for me of going to business school or not was largely influenced by the fact that I have an older brother who had just finished Columbia business school. And my father had gone to Harvard business school decades before that. But when he went, when my dad went it was – I’m fudging the numbers here, but you could mow lawns over the summer, do some help around the house for different people and make enough money that you could actually put a dent in it a little bit. Two hundred fifty thousand dollars I think is what it costs to go to business school now by the way you pay it back. So when Glen Beck came along and said, hey, how about you just come work for me at my new media company, we will pay you a salary, I said, yeah, let’s do that. Because I went through the whole process of signing up for the federal loans and I was going to finance it. And I just decided I didn’t want to do it.

Porter Stansberry:

Well, the growth in student loans has been what’s powered our economy over the past decade. So a lot of folks didn’t make that choice. They did take the money and they did go spend on all kinds of stuff. And I don’t know if this is your experience, but I knew some folks back when I was an undergraduate at the University of Florida who would get student loans, and the student loans would pay for their ski trip over spring break.

Buck Sexton:

Oh, yeah. That still happens for sure.

Porter Stansberry:

It didn’t pay for their books. So I think a lot of the boom in casual restaurants, a lot of the boom in spirits, you know all the sudden right about ten years ago people got into paying a whole lot of money for Patron, tequila. And I just wonder how correlated that’s all gonna be to the student loan bubble.

So let’s take a look at the numbers. I think they’re really pretty incredible. So over the last ten years the outstanding student loans have more than doubled. And they now total 1.3 trillion dollars. If you think about that, that’s about a fifth of all of the conventional mortgages in the country. That’s a pretty shocking number. And then I think this number’s pretty shocking too. Forty-two million Americans have a student loan. Forty-two million people.

Now when I went to college, Buck, I don’t want to date myself too much. I’m about ten years older than you. And I graduated from high school in1991. And I went to University of Florida. And if I had kept my grades up I probably could have gone for free. But there were so many other fun things to do at the University of Florida that that’s not what happened.

So I ended up paying something like $55.00 a credit hour. And I could finance my whole education by working on the weekends down at Walt Disney World as a lifeguard. And I also did some stuff around the university. I worked at Lake Walberg. I drove a ski boat. Fun stuff. It wasn’t even like work. But my point is, I never borrowed a penny. I didn’t even have a credit card. My parents wisely counseled me that that was a disaster in the making. So I stayed away from all that stuff. I graduated from college. I didn’t have any money, but I didn’t have any debt.

And now I’d say probably more than half of the people that I employ at Stansberry Research that are under the age of 35 have a student loan and they have significant amounts of student debt. And I can’t imagine trying to buy a house or get started just furnishing an apartment if you’re already carrying 10,000, 20,000 dollars’ worth of debt. And I think the average balance is –

Buck Sexton:

I think the average for the class of 2016, Porter’s, $37,000.00 in debt.

Porter Stansberry:

Yeah. It’s just insane, isn’t it? I mean the only thing –

Buck Sexton:

That’s the average.

Porter Stansberry:

The only thing I really learned in college was how to talk to girls and how to drink too much beer. And I can’t imagine being in debt $37,000.00 for those skills.

Buck Sexton:

I think that that hasn’t changed. In fact, it's only gotten worse. The average undergraduate degree is up 200 percent. I can’t remember if it’s in the last ten years or the last 20. But the expense is going up all the time as well. And because you have more people than ever before getting undergraduate degrees the value of an undergraduate degree is actually less now in the marketplace than it was before. It’s like an arms race. People now need to get – this is – and I was looking at it from this perspective too. That’s why you have so many folks going to get MBAs. My little sister just graduated this week from law school. This is what is now expected for a certain kind of job or certain kind of job prospects. And that puts more pressure on people to take out these loans in the first place.

Porter Stansberry:

Well, there’s a follow on effect that I want people to be aware. Because we are at a new all-time high level of consumer debt. And so let me explain what that means. It’s basically all the debt you have that’s not your mortgage. And so the major categories of consumer debt are student loans, auto loans and credit cards. All right. And because student loans have grown so much they now dwarf the other categories and they’re squeezing out other forms of credit. And what’s bad about student loans is they can’t be adjudicated in bankruptcy. Generally speaking you can’t get out of paying them.

And so I don’t think we as a country have figured out yet how we’re going to handle this crisis. And by the way, it’s not a crisis that’s going to happen. It's a crisis right now. There are currently 8 million people, Buck, who collectively owe 137 billion dollars. And they are seriously delinquent. That means they haven’t made a payment in more than a year. Eight million people.

So if you know there’s about 100 million US households. You figure there’s probably some overlap, right? There’s a couple of people who are in the same household who both are delinquent on their student loans but not – so let’s say 5 percent of households are now gonna be – are not gonna have access to credit at all. Of any kind. Because they’re currently completely in default on a very large debt.

So to give you some idea, that’s 19 percent of all of the student loan borrowers haven’t paid anything in over a year. And I want to be clear. These aren’t people who are enrolled in some kind of government granted deferment. They’re not still in college. They’re not – you know there’s all kinds of ways to get out of paying it. But these are folks who are supposed to pay and aren’t. Twenty percent of the borrowers.

There’s another 3 million people – so that would take the total to over 10 million people – who are at least a month behind in their payments and are considered very likely to default. You put all that together, that’s 25 percent of all student loans are currently in default. That is an amazing number. That’s far higher default rate than we saw during the mortgage crisis, and we’re talking about almost 1 ½ trillion dollars’ worth of underlying loans. That’s a huge problem. And these loans are not gonna be foreclosed on, right. You can’t just go and, Buck, give me your diploma back. I’m gonna auction it off and get what I can for your loan. There’s no collateral. And there’s no way to adjudicate these debts.

So these people –

Buck Sexton:

Well, you also have the – Porter, you know you have this movement predictably among the Bernie Sanders supporters in this last election, and also Senator Elizabeth Warren, of students who just expect the government will forgive this. They’ll just wipe it away. And that is an expectation that a lot of them have.

Porter Stansberry:

Yeah. There’s a lot of denial out there. Oh, I’ll just ignore this and somehow someone’s gonna come and save me. But I don’t want to talk for a minute about the ethics or the politics of it. I know there’s a lot we can talk about there. What I want to focus on on what’s the financial outcome of this for our economy. Because these numbers are definitely big enough they’re going to affect consumer spending. And by the way, this isn’t just kids. Okay. So there are – this boggles my mind. I love my children. I’ve got a nine year old, Traveler, and I’ve got a six year old, Seaton. And they are the apple of my eye and they are more fun. And if I could, I wouldn’t have them grow up from here. This is the perfect age. Because when you’re nine and six years old you actually believe that your dad is the smartest, strongest and best looking man in the entire world. And from here it’s just gonna be a very sad journey into reality for my kids. So I don’t want them to change.

But when they come and – they come and ask me for help to go to college, assuming that they’re good kids with good prospects and good scores, I’m sure I’ll do what I can to support them in some way. I won’t pay for it all because I think that sends a bad message. Anytime someone gave me something I promptly destroyed it. So they need to work for it and earn it. But I can help them.

But if they came to me and said, would you go into debt to pay for my student loan or to pay for my college, I’d say, you’re out of your mind. But there are 3 ½ million adults who have borrowed almost 100 billion dollars on behalf of their children. Isn’t that nuts?

Buck Sexton:

Yeah, so there’s also in on this.

Porter Stansberry:

They’re complicit. But anyway, so one of the things that’s happening right now as we speak is the entire buildup of this consumer debt bubble. Which started in earnest in the last 2000s. Actually as the mortgage bubble was busting, the consumer bubble began to grow. And so people started to borrow more and more money to buy cars. People started buying more and more money to go to college. And I see this, Buck, as a natural consequence of some of the deeper things that are going on in our economy. We’re talking about Pareto’s law. About how much – how few companies are winning. Not many people have paid attention to what’s happened in terms of the employment in the country.

So the number of people who are not gainfully employed has soared. Something like, we’re down to something like 65 or 66 percent of able bodied adults are working now. And that number has fallen steadily for three or four decades. And it’s funny, to me –

Buck Sexton:

So this is like the workplace participation thing versus the unemployment rate, right? Because everyone says the unemployment rate is so low. Things are good. Meanwhile, you drive around large parts of this country, nobody would agree with that sentiment who actually has to get a job or have a job.

Porter Stansberry:

Right. And by the way, it's because you don’t have to anymore. You can get on disability or you can go borrow money to buy a car. You can get a student loan. I know- I don’t want to name any names, but I know several adult people that just go from school to school borrowing money to avoid getting a job. And there’s lots of folks out there. So it seems like if you are a certain demographic, if you are a certain age, if you are a certain intellectual ability, you borrow money continually and pretend like you’re a student. If you’re in a different demographic, perhaps at a lower intellectual capacity, you find a way to get a disability. But the bottom line is no one’s just going and getting a job.

And one of the reasons, there’s a lot of reasons behind that, but one of the reasons is the n umber of entry level jobs is collapsing. So, you know politicians like to go for some reason to the steel mills and the coal mines to talk about economic problems. But department stores. We were talking about Amazon. Department stores employ a third fewer people now than they did in 2001. That’s a half a million traditional entry level jobs gone. That’s eight times as many jobs that were lost in coal mining over the same period.

And how about a career that’s –

Buck Sexton:

And those retail jobs are never coming back, by the way.

Porter Stansberry:

No, and they’re never coming back.

Buck Sexton:

No people talk about this in retail. It’s never gonna happen. So this isn’t a seasonal or even a cyclical job loss. This is a forever job loss.

Porter Stansberry:

And how about newspaper publishing? You know I’m in the publishing business. So I know a little bit about this. So 300,000 people – that’s two-thirds of the work force has been laid off, fired, bankrupted in the newspaper business since 2000. It is amazing the quality and caliber of people I can hire now because there is no other research and writing job available. The thesis I’m working towards here with you, Buck, is I think this particular consumer debt decline is going to be a major bust. And I expect that the default rates are gonna go higher and that the losses on the loans are gonna be deeper than anybody expects yet.

And there’s really three reasons for this. The number one reason is that wages in America have not gone up consistently in almost 40 years. So there’s no wage growth. So those loans that are taken and that continue to pay out interest, continue to charge interest, those loans are not getting easier to repay because the wages are not going up the way that they have in the past. The second reason, of course, is the thing that you and I were just talking about. The Pareto’s law aspect of our economy. How there are big winners and lots of losers in our tech driven and credit financed market.

Now let me give you another, more proof about this. It’s pretty incredible I think. Have you been following what’s going on with Netflix? Netflix is on a campaign to put all of Hollywood out of business. So they have been targeting television studios and paying people two and three and four, ten times more than they were being paid to come do programming for them.

Let me give you an example. Netflix is paying 40 million dollars to do two Chris Rock specials. I didn’t say two seasons.

Buck Sexton:

They overpaying. They’re definitely overpaying.

Porter Stansberry:

I said two shows, Buck. You and I are in the wrong business. I think, by the way, I think you have the talent for it. You could definitely get into standup. And you should. I mean let’s say you can only do a tenth as good as Chris Rock. I’d take 4 million dollars for two shows.

Buck Sexton:

Yeah, me, too.

Porter Stansberry: Okay. So think about this for a second. Netflix has spent 11 billion dollars on programming in the last two years. That’s five times as much as Twenty-first Century Fox. It's twice as much as Time Warner. And this is not per show. This is total budget. I mean Time Warner and Twenty-first Century Fox are putting out a lot more shows. But Netflix is spending five times as much or twice as much.

Netflix spends 10 million dollars an episode on a show called The Crown. Which no one’s ever watched.

Buck Sexton:

Yeah, it’s pretty slow. I tired. British monarchy stuff. A lot of people walking around drinking tea. Speaking in subtle tones.

Porter Stansberry:

So how do you explain this? How do you explain this, Buck? And let me give you some basics on Netflix’s underlying business. The revenues have soared in the last three years. As you know, they’ve signed up a lot of people. They pay $10.00 a month. So you’ve seen revenues go from 5 billion to 10 billion. And that sounds really great .but the cash flows – what the company’s actually making in cash have dwindled. They went three years ago to zero. Then they went negative. And last year they were big negative. It was negative one and a half billion dollars annually. And the company has so far borrowed 3 billion dollars to maintain its spending.

And what I think is happening, and I hope you’ll follow me here, is by – this is – what’s happening is winner take all nature of our economy is being accentuated, is being enabled, is being accelerated by central bank policy. So if you are a very big company with good connections on Wall Street, you can borrow almost unlimited sums for almost nothing. And that allows you to bully all the other competitors out of your marketplace. And ironically, the stock market, which is being also driven by the same central bank flows. In fact, the central bank of Switzerland now owns more shares of Facebook than Zuckerberg, the founder. Just try to figure that out for a second in your head. The stock market is only paying attention to revenue growth. It's ignoring losses. And nowhere is that more true than Amazon.

So over the last three years Amazon has produced 320 billion dollars in revenue. It’s one of the biggest companies in the world. It’s only made 3 billion dollars in profit. So it has huge, huge, huge revenues. Almost no profits. How can it continue to invest so heavily in its business? How can it build out its new cloud business? Which is a fantastic business. How can it continually buy competitors? How can it continually grow in a new segments? Like the grocery stores where you don’t have to check out. All that kinda stuff it’s doing.

Buck Sexton:

Let me guess, it can borrow huge sums of money because of its connections to central bank.

Porter Stansberry:

Yeah. In the last three years – it only made 3 million dollars in net income, but it invested 17 billion in new business ventures. And it borrowed almost 10 billion dollars to finance the gap.

Buck Sexton:

I find the dynamic with Uber, which is a service that I have grown to love and use a lot, to bring in a few of these different threads you’re talking about, Porter. Right now people think of Uber as a great job on the side and something that they can do and it’s employing a few hundred thousand people across the country. But they are trying to knock all the competitors out of the space. They have a huge market cap. What’s the – Uber is –

Porter Stansberry:

Oh, something crazy. Forty billion I think was the last round –

Buck Sexton:

Yeah, forty – I was gonna say 40 or 50 billion dollars. And the way they’re trying to structure it, and this is already clear from what the executives are saying and what the business model’s gonna be, is that they’re going to move to self-driving cars. So they’ll be the 800 pound gorilla in the space. They’ll be the biggest. They’re gonna try to destroy everybody else who’s in the space. And then they’re gonna have to get a fleet of cars. So they’re going to be working with a major manufacture, GM or somebody else. I know some of those deals are already under way. And then you’re gonna have a lot of people that don’t have jobs.

Porter Stansberry:

Yeah. And so the question is, can you have an economy that’s unbalanced? Can you have an economy that has too much investment? Has too rapid gains in productivity? And as a result, collapses because the investments have been inflated. And I think that’s – I know that’s what we’re seeing. And I want to give you one more stat. I know that no one wants to listen to a podcast with number after n umber in it, but it’s just an amazing stat.

So Amazon has a market cap today that’s right around 500 billion dollars. One of the largest companies that’s ever existed. Its lifetime total earnings are less than 5 billion dollars. Its lifetime earnings are less than 5 billion. So it’s trading at 100 times its lifetime earnings.

Now I love Amazon too. But there’s something completely crazy about a business that doesn’t have to earn profits, that has unlimited access to capital and where investors will bid the stock up to 100 times its lifetime earnings. What I’m saying is, as an investment analyst, I don’t know how to make sense of this. You can’t compete with Amazon because it has access to unlimited capital. It doesn’t have to earn a profit.

But what’s the impact for our economy because of that? And what happens if there are another half a dozen firms that all have the same economics? They’re gonna put everybody else out of business. But how can we have a growing economy and a successful economy if everybody loses their job? We can’t all sit at home, live on social security and order from Amazon, can we?

Buck Sexton:

There’s a lot of people I know in the economic space say they’re becoming increasingly bullish on politics because they’ll be, like I said about the student debt, there’ll be a political movement and a considerable one, especially if you have a real backlash and a democrat surge, to forgive a lot of – what does that mean? I mean if you forgive the trillion dollar student loan debt that’s out there what does that look like? Maybe not all of it but a good percentage of it. But also you’ll get into talks, Porter, about the minimum basic income. That will be an idea that gets a lot more traction.

Porter Stansberry:

Oh, absolutely.

Buck Sexton:

As we see – yeah, as we see people that are out of the workforce –

Porter Stansberry:

It’s complete madness.

Buck Sexton:

They’ll just say, instead of administering all these welfare programs, give everybody a minimum basic income.

Porter Stansberry:

All right. So what I want to do for a second is I just want to take the discussion into a realm where there is a lot more concrete certainty. Dealing with consumer income, savings, debts, Amazon’s numbers, it's all amorphous and it’s impossible to know where the limits are, right? We can’t know how many toasters you’re gonna buy from Amazon. Although we have an idea.

But I want to look at what the central bank bubble has done to a very finite market. And that’s agricultural commodities. And I know that sounds so boring, but just follow me here for a second. If you look at what’s happened since the central bank policies began to change in 2010, you’ll see that agricultural prices across the board have been devastated. They have collapsed. So the major ETF for commodity futures is DBA. It’s the power shares agricultural fund. The symbol is DBA. You can follow along at home. And this thing peaked at about $45.00 a share way back in 2009.

Okay. It’s since collapsed to under 20. So commodity prices across the board have fallen by more than 50 percent. You haven’t heard much about this yet. But there is going to be another farming crisis because commodity prices have been crushed. By the way, Buck, just for reference, I bought my own corn farm in 2013 and I can tell you farming can’t be done profitably right now. At least not on my scale.

Buck Sexton:

Don’t tell that to all the hipsters in the food cooperatives in Brooklyn. They seem to think that farm – that organic farm to table sustainable is what everybody should be doing. They don’t recognize that if everyone tried to do that a lot of us would starve.

Porter Stansberry:

So what I’m saying is, in our economy – yeah, by the way, the small farming stuff is crazy and the prices you have to charge for that food no one will pay for it except for in a place like New York. Anyway, interesting thing to me is so far – so commodity prices have collapsed. Okay. But what’s been going on with tractor sales? Well, why did commodity prices collapse? Commodity prices collapsed because a heck of a lot more people started tilling the soil with a heck of a lot more tractors. And so Deere and Company, which, of course, makes the brilliant green wonderful tractors. I own one of them. Fifty-one oh five, by the way, in case you’re interested in the model. They’ve soared. The price of Deere stock has gone from under 30 in 2009 to over 110.

Now how do they do that? How can you sell more and more tractors ever year when commodity prices are going lower and lower and lower every year? You’ll never guess, Buck. You’ll never guess.

Buck Sexton:

I think it starts with a C.

Porter Stansberry:

They have decided that the way to sell tractors is to give away the central bank’s free money.

Buck Sexton:

Credit. There we go.

Porter Stansberry:

Yeah. So the company now holds 24 billion dollars in loans and leases up from 17 billion in 2008. The company’s market cap is only 34 billion. So Deere management is betting the farm, so to speak, on the ability of farmers to repay 24 billion dollars in tractor loans. What do you think’s gonna happen next?

Buck Sexton:

I’m guess they can’t pay it.

Porter Stansberry:

There’s no way. Not when corn is trading where it’s trading today. So we haven’t seen it yet, but you’re going to see a big collapse in commodity associated lending. By the way, you already have seen the same collapse in the oil patch. It’s coming next to a farm near you.

My point is, all of these things are the intellectual basis for why I’m so worried about consumer credit. And the bell just rang a month ago on this new giant problem for our economy. So the big lender in the consumer space is Capital One. I’m sure you’ve seen their advertisements. You might even have a Capital One card in your wallet.

Anyway, the loans outstanding on their book have just crossed over a very important threshold of default. And that’s 5 percent. And generally speaking, in any kind of credit market when the default rate reaches 5 percent that’s when the trouble starts. That’s when losses accelerate. That’s when things kinda go to hell. You can have default rates that kinda bounce back and forth between 2 and 4 percent and you don’t have a start of a cycle. But when they go over 5 percent what happens is all at the same time all the lending standards go up and all of the companies retreat. And so they start pulling lines of credit. And so the people who were borrowing money to pay back another lender, they can’t do that game anymore and the whole game falls apart. So that threshold was just busted through last month. And as a result, Capital one just increased its reserves against losses by 30 percent, to 2 billion dollars.

So just imagine you’re running this company for a second. I mean how can you do that? In one earnings call, oh, yeah, by the way, we’re going to lose 30 percent more than we thought we were going to on our loans this year. That is the credit cycle coming to a crashing halt.

So if you’re sitting at home and you’re thinking to yourself, okay, I agree with what Porter’s saying, I’ve seen my friends and relatives extend themselves in student loans. I know they can’t pay them back. I’ve watched them buy cars that they can’t afford. And by the way, the car data is absolutely fascinating. In the last five years, Buck, 500 billion dollars of auto loans were securitized. So that means that the car dealer leant you the money to buy the car, he turned around and sold the loan to a bank. The bank packaged the loan and sold it to somebody else.

Buck Sexton:

- amazing things for mortgages, if I remember.

Porter Stansberry:

Yes. Sound familiar? Okay. So – and then think about this for a second. One out of every three cars that are traded in for a new car has negative equity. And that, of course, means that the unpaid portion of the old loan has been rolled into the new loan. At the same time, the average auto loan is now 68 months. So if you understand those facts, it’s a safe bet to know that a very large percentage of these securitized auto loans have zero equity. And with used car prices crashing, that’s why the rental car fleets have almost gone out of business already, how many people are gonna keep paying for a car when they have zero equity in it when they can go buy a cheaper used car right down the street?

These are all the factors that are leading me to be very concerned about what’s gonna happen to the credit markets. The consumer credit markets and the commodity credit markets have been vastly inflated over the last six years. And the tide is now turning. That’s gonna be a big drag on economic growth no matter what Trump does. And I definitely think it puts investors at risk. Especially if you‘re investing in anything that has been powered so far by the growth in consumer credit. And I’m thinking about things like Walt Disney World stock. Spirits. Casual restaurants. Travel. There’s lots of our economy that has been inflated by the student loans and the auto loans.

Obviously the car makers, the car rental companies. It’s gonna be very interesting to see if the car rental companies can even survive. Because in the last two or three years, I can’t remember the exact data point, but they bought something like 25 billion dollars in cars right before the prices began to crash. So they’re in trouble.

But these are the things that concern me and, Buck, as you’ll see, I get criticized all the time for being Chicken Little. But I don’t know how you can look at these numbers, and I’ve done all the math. It's basically 500 billion dollars in outstanding consumer loans that are very likely to default and end up as losses over the next 18 to 24 months. That’s a huge number. That’s as much money as Fannie Mae and Freddie Mac lost on mortgages. So this could have a very big impact on our economy. And we don’t know yet of course, because all these loans are securitized. Nobody knows where the bad apples are. They’ve been sold into banks. They’ve been sold into brokerage firms. They’ve been sold into insurance companies. And no one’s gonna come forward and say, oh, yeah, by the way, I bought a whole bunch of dodgy auto loans. They’re gonna continue to deny that they own anything like that until it’s too late.

Buck Sexton:

So what does it look like when the dominoes start to fall, Porter? You’re telling us about this structurally – it certainly seems like it’s just a question of when, what does when look like?

Porter Stansberry:

Well, you know it got kicked off last month. When the leading underwriter of consumer credit, which is Capital One, comes out and says, we’re raising our loss reserves by 30 percent, that’s it. The fun’s over. And then you look around and you see these companies that are very dependent upon auto credit, for example. How far down are shares of Hertz today? Seventy-five percent? Eighty percent? And Avis, same. They’re collapsing because no one wants to underwrite the purchase of additional automobiles right now because all the loans are going bad.

The subprime auto lending is gonna completely stop. And you’re gonna have a big reduction in demand for new cars. You’ve already seen Ford and General Motors move to idle production. This is how the economic cycle happens.

Buck Sexton:

And car culture is changing too, by the way. In cities now people, like I don’t have any aspiration in New York City to own a car. Here it’s crazy to begin with because it’s so expensive cause of garaging and all the rest of it. But now with these ride share services becoming as popular as they are, car ownership is gonna change. The whole notion of a car as, freedom as a young American is gonna be changing.

Porter Stansberry:

That’s all true, but that I think is gonna be a very gradual trend. I don’t expect that to make a significant impact on demand for new automobiles for, I don’t know, some time.

Buck Sexton:

Five or ten years, yeah.

Porter Stansberry:

But what will make an immediate impact is if you go to buy a car and you can’t get a loan. I mean that’s very – that’s a very significant reality for many Americans. You gotta remember, in the last 12 months more than 25 percent of every car that was purchased was financed with a subprime auto loan, Buck. So you take out a quarter of the demand for new cars. Not even talking about what’s going on with used car prices and how much more competitive used cars can be against new cars when the prices fall out a bit. You’ve got a big problem. And, of course, the auto makers make up the lion’s share of US manufacturing. Which is a huge part of our economy. There are huge follow on effects. So that’s why I’m suggesting that we’re gonna see much weaker than anticipated economic growth. You’re gonna see much higher than expected credit losses. And you’re gonna see – this is surprising to everybody, you’re going to see losses to employment. Right now the employment market’s still very strong. That’s going to change.

So I think a lot of –

Buck Sexton:

What about – I’m sorry. I was gonna ask what about the – go ahead.

Porter Stansberry:

Sorry. Go ahead.

Buck Sexton:

That’s all right. I was just gonna ask you about what role, if anything, Trump and tax reform with the Congress could play in any of that analysis. Do you think this is backed into the cake regardless?

Porter Stansberry:

I think this is going to make it very difficult for Congress not to cut taxes. Because the fourth quarter of this year the US economy is going to be desperately in need of some kind of massive stimulus .we’ve got to do something to make up for some of these losses that we’re gonna see in the credit markets. So I think it’s actually gonna be a help to Trump.

Likewise, I don’t know if the border adjustment tax is even politically possibly remotely so. But it would certainly be an aid to a lot of the manufacturing concerns in the United States. And they’re gonna need the help.

So, Buck, I think that what we’re saying is I see a lot of fundamental weakness that hasn’t been reflected yet in the equity markets. Or in the credit markets. But I think that there are big problems in the second half of this year coming for the US economy. So if you’re out there and you’re listening, just be prepared. You know what we recommend you do is you follow trailing stop losses on your stocks or you try to hedge. And if you look at –

Buck Sexton:

Yeah, that’s what I was gonna ask you. So we’re looking at this structurally and there’s an understanding and you’re educating everybody about what those problems are. You say there’s a huge problem with your portfolio. You wrote that in your last Friday digest. How does one get ready for this uncertain and tumultuous economic cycle it looks like we’re heading into?

Porter Stansberry:

Yeah I said that. I said that to the reader. There’s a huge problem with your portfolio because you’re probably not hedged.

Buck Sexton:

Right. That’s what I mean.

Porter Stansberry:

You know we had a day where stocks on Wednesday of last week fell 1.8 percent. They fell 1.8 percent. It’s nothing. It’s a ripple on a lake. And what’s funny is any time the stock market falls, we have a lot of retail customers, so, you know I don’t know, we’ve got hundreds of thousands of folks who are managing their own portfolios with their brokerage accounts. And when we have a down day a lot of those people get very scared and nervous. And, you know what I was trying to tell them was, if you were worried about a 1.8 percent decline in stock prices, a 2 percent decline, your portfolio is all wrong. So if you look at my total portfolio, we have a portfolio solutions product where I do a paper portfolio that’s allocated all the way down to the individual share. So I can tell you how much is allocated into each stock. And there’s like 40 positions.

But 10 percent of that portfolio is short the market. It’s hedged. It’s not half. You know it’s 10 percent. But it gives us some buffer. So to give you an idea, the market is measured by the S&P 500, fell 1.8 percent. And our total portfolio was down that day by 1.3 percent. So you know we were much less volatile than the market itself. And that’s because we’re hedged. And I was trying to encourage people, you can do the same. You can hedge by owning fixed income. You can hedge by owning some cash. Or you can hedge by shorting stocks. But if your portfolio can’t weather a 2 percent decline in a week, you’re making a big mistake. You’re taking on far more risk than you can actually handle. And I’m sure you know people like this people too. Everyone thinks that they’re a buy and hold investor until their stocks fall 25 or 30 percent. And then they become what we call the buy and fold investor.

Buck Sexton:

Any political stories out there right now, Porter, that you think either are just of interest or that you believe have an effect on the markets? I mean last week there was some tough stuff for the Trump administration and there was that huge one day market decline and then a rally the next day. Russia investigation. Any of that you think that we have to factor into our thinking about what’s gonna happen with the economy and the markets?

Porter Stansberry:

You know way better than me, Buck. I can’t make sense of any of that political stuff. I mean I just don’t even understand it. I think the most interesting thing I’ve heard about politics in a while was the poor kid who was murdered in DC. The Seth, what’s his name guy. The –

Buck Sexton:

Seth Rich.

Porter Stansberry:

Seth Rich. Did you know him, Buck?

Buck Sexton:

Did not know him. But the – there’s a story out there right now that I gotta say is in the conspiracy realm still. There’s no – and I know we may get further, we maybe’ll look into this further in the weeks ahead. But.

Porter Stansberry:

So you’re not touching the story. You think this is still too speculative.

Buck Sexton:

Yeah, I think it's too speculative. For a whole bunch of reasons. One, think about the problem versus the proposed solution under the conspiracy, right? If Seth Rich –

Porter Stansberry:

By the way, I love knocking holes in conspiracies. It’s not hard to do. It’s very entertaining.

Buck Sexton:

Oh, yeah. So think about it this way. If the problem is that Seth Rich is going to release some DNC emails that show what everybody already knew anyway, which is that Hillary Clinton was being favored egregiously by the democrat political apparatus, and that was out there in the open too, with the super delegates. I remember sitting on –

Porter Stansberry:

Now wait a minute, Buck. Wait a minute. Wait a minute, Buck. But didn’t the RNC do the same thing for Trump?

Buck Sexton:

No. RNC did not do the same thing for Trump. It was –

Porter Stansberry:

Didn’t they embrace him with open arms and give him all the answers to all the debate questions upfront?

Buck Sexton:

Nobody seemed to ever think that it could happen. And even when it happened I knew Republicans who were like, no way that happened. But let’s – back to the Seth Rich conspiracy, cause I think it’s interesting to look at it from a realistic perspective.

So you’ve got this problem allegedly of this guy sharing emails and it supposedly went to WikiLeaks with them. The notion that you would then engage in what would be a contract hit against a DNC employee when everybody still thought – you have to remember the mindset at the time, not the mindset now. Everyone still thought that Hillary Clinton was a 95 percent chance of winning. I mean it wasn’t even a question. So you’re going to take a contract hit out on somebody because they’re a source of DNC email. Think about the liability that would create for anybody involved. I mean the moment you pull at the threads, I’m telling you, Porter, it all comes apart. I know people will get mad at me for this one, but I’m like, look, there’s no way. In our modern era of smartphones and everyone knows where everybody is all the time, everything is recorded, a contract hit on a DNC employee as part of some conspiracy to get Hillary elected just doesn’t wash. Just no way. I don’t see it at all.

Porter Stansberry:

But kim.com is telling us it’s true.

Buck Sexton:

Yeah. I mean that guy’s a notorious international internet criminal, isn’t he? I’m not sure I’d take his –

Porter Stansberry:

I don’t know if it’s final or not, but I think we’re gonna have a chance to ask someone who might really know. Which is –

Buck Sexton:

I’ve heard. I know. You guys, when you’re ready to announce you guys announce, I think that will be a very interesting discussion. Although assuming that is true, you know source protection and Seth Rich would still be considered to be, if he was the source of any DNC emails I don’t think anybody would tell us that. I don’t think anyone would confirm that one way or the other. But do you see what I mean though, Porter, about the – so you get this guy who’s supposed to be leaking emails that on the one hand –

Porter Stansberry:

Hold on though. I’ve got a rationale for ya.

Buck Sexton:

Okay. Let’s hear it.

Porter Stansberry:

So I went over and met with Julian Assange in London November of last year. And we sat down with him and wow, we talked for at least an hour. And, again, I’m a political complete neophyte novice ignoramus. I’m not interested in it really. I just – for me it’s just a carnival that I don’t really understand. But I did ask Julian very plainly. I said, look, are you trying to influence the US election? Are you deliberately releasing more information about the Hillary side than the Trump side? And he said, he admitted it. He said, yes, that’s what I’m doing. And he said, I have an axe to grind with the Democrats because they put the poor little soldier in jail. The guy who –

Male: Chelsea Manning.

Porter Stansberry:

Chelsea Manning. It wasn’t his name then. That’s her name now.

Buck Sexton:

IT was Bradly. Now Chelsea.

Porter Stansberry:

Got it. So Bradly Chelsea. He was upset about what had happened with him/her. Anyway, and so that was news to me. And I said, well – but he also said, but the other thing is, Porter, is what can I tell people about Trump that they don’t already know? Like you know like what am I gonna do? Release an email that he regularly assaults women? Everybody already knows that. Am I gonna release an email that he’s cheated on his wife? Everyone already knows that. Am I gonna release an email that he cheats on his taxes? Everybody already knows that. You see the point? Like he’s like I can’t really make waves releasing anything about Trump any ways. But yes, I’m trying to get Hillary beaten.

And the –

Buck Sexton:

- tell you this – go ahead, go ahead Porter.

Porter Stansberry:

Well, just I’m getting to the core point, which is the most important thing he said, he looked me straight in the face when he said it. And I don’t – you can – Julian, you can say a lot of things about his personality type and he is definitely a prickly and unusual person. But he’s not a liar. He’s not a liar. He measures his words very carefully. And he told us straight point blank that the Russians were not the source of the DNC leaks.

So here’s what I’m saying. I’m totally making this up. I have no evidence. Okay. This is just speculation. But imagine that Seth was the leak, was the source of Podesto’s emails. Okay. And the current narrative that the Democrats are selling is that the Trump folks are in league with the Russians and that’s where they got those emails. WikiLeaks acted as an intermediary. Maybe knowingly. Maybe unknowingly. But it was really the Russians who were responsible.

What happens to that narrative, what happens to the FBI investigation of Trump and the Russians if it becomes widely known that the real source of those leaks was Seth Rich?

Buck Sexton:

That’s why the – let’s call it the theory instead of the conspiracy just for now. Although I do think it is a conspiracy. But we have to see what – they haven’t found anybody for the murder yet in DC. So it’s an open murder case at least. Even, what you’re saying is why people have latched on to it because it becomes an explanation for so many other things as well, Porter.

Porter Stansberry:

Ah, see I thought –

Buck Sexton:

But you also have –

Porter Stansberry:

I thought I just figured that out. I thought I was sleuthing.

Buck Sexton:

Well, on the right you have when the – the allegation is that Russia hacked the emails and the released them. And on the right people will say that didn’t change the outcome of the election. But now if this conspiracy were true, then Hillary would have had to have the foresight to know that she was going to lose the election because of the emails. Or not Hillary but somebody in the Democratic apparatus –

Porter Stansberry:

Very valid point. But, Buck, you’re ruining all of our fun. You can’t let – Buck, come on, you can’t let the facts get in the way of a good political story.

Buck Sexton:

I gotta keep it real here. You know I mean this is my side of the coin. This is the side that I have to pay attention to all the time. And I’m telling you, the guys who are running out there with the stories about the Seth Rich conspiracy, it’s not gonna be – they’re not gonna get what they want out of it in terms of proving it correct. And it just doesn’t wash. It doesn’t make any sense.

By the way, it’s the same reason why the Russia collusion narrative with Trump makes no sense. There’s no need for – even if you believed that Trump was, in fact, willing to collude with the Russians or with Russian intelligence to try to throw the election, one, it is a highly ineffective method to try and throw the election, right. There’s a lot of other things that you’d probably want to try before this. And two, there’s no need for it. There’s no reason for the Russians to get help from Trump or any of his associates. They can do whatever hacking they want to do on their own. They’re very effective. Their cyber capabilities, their intelligence collection, they know exactly how to go about that. So collusion just doesn’t make sense as a theory as well. Which is why – you’ll notice, by the way, Porter, and it’s just happened this week, and this is very important for those of your – those in the Stansberry extended family who are listening should watch this. There is a transfer now from the collusion investigation to the obstruction investigation. Meaning that they weren’t gonna find what they said they were gonna find on Trump and Russia. But now they’re going to say that Trump tried to prevent them from finding what was never there in the first place. And that’s the crime.

Porter Stansberry:

This is – this boggles my mind why this – why people get caught up in these obstruction charges. Martha Stewart, on my side of the fence, she didn’t go to jail for insider trading. She didn’t ever do any insider trading. She went to jail because she lied to an FBI agent.

Buck Sexton:

Yep.

Porter Stansberry:

And –

Buck Sexton:

It is the sword of Damocles. Any time you get involved in any of these federal investigations, process crimes are a constant – even for innocent defendants, and any decent criminal defense attorney will tell you that.

Porter Stansberry:

Shut up.

Buck Sexton:

Even for those who are innocent of any wrongdoing –

Porter Stansberry:

Shut up.

Buck Sexton:

Scooter Libby. Scooter Libby was somebody –

Porter Stansberry:

Just shut up.

Buck Sexton:

Okay.

Porter Stansberry:

No, no, I’m saying –

Buck Sexton:

Scooter Libby was –

Porter Stansberry:

No, I’m saying that – the first thing your defense attorney tells you –

Buck Sexton:

Yeah, no, you gotta be quiet.

Porter Stansberry:

- is just shut up. Stop talking.

Buck Sexton:

Everybody who is ever subjected to interactions with law enforcement, the people that I know, and I have friends who are current and former federal prosecutors, local prosecutors, they’ll tell you, just don’t – you don’t help yourself. Just don’t say anything.

Porter Stansberry:

You can’t help yourself.

Buck Sexton:

Just have a lawyer there. Don’t say anything. You are never doing yourself a favor unless you’ve established beforehand with counsel that you’re gonna be talking about something you should just be quiet –

Porter Stansberry:

You have the right to remain silent. Use it.

Buck Sexton:

Yeah. It’s a good right to use.

Porter Stansberry:

When you get pulled over for speeding, which I know this doesn’t happen to you, Buck, but unfortunately it happens to me.

Buck Sexton:

No, never.

Porter Stansberry:

Happens to me frequently. When you get pulled over for speeding and the officer says, sir, do you know why I pulled you over? Don’t say anything. Hand him your driver’s license, hand him your registration and say, officer, respectfully, on the advice of counsel I’m gonna decline to answer your question. That’s all you have to say. By the way, the cop’s gonna write you a ticket any ways. You’re not gonna become his friend.

Buck Sexton:

Yep. Well, you and I are not. I know some people that are able to pull that off but. They tend to not be –

Porter Stansberry:

I don’t think we have the proper assets for that kind of a negotiation.

Buck Sexton:

They tend to not be dudes usually. from my experience they are not able to pull that off. But nonetheless, so anything, by the way, that you want to direct people to, Porter, for both for everything that you’ve got going on at Stansberry as well as going forward? I mean people should go to Investorhour.com for the free weekly show update, right? What else have we got?

Porter Stansberry:

Well, I think that we should tell them that we’re gonna do our every best to have Julian Assange on the show next week. I don’t know if it’s a complete 100 percent done deal yet. I believe it is. And we will have a very interesting conversation. It’ll be more focused on politics, of course, next week. And there are other things we have in the works for folks to be involved with. But they’re not quite ready just yet. So for now, I’d say stop by StansberryReserach.com. You can sign up for one of our wonderful free e-zines. The Daily Wealth is my favorite. And make sure that you are following along with the Consumer Credit Bubble Bust. We’ll be updating that regularly. And, Buck, I had a lot of fun doing it. Hope it was fun for you. And I guess –

Buck Sexton:

It was great, Porter. People can send us an email, by the way, if they have any thoughts, feedback on the show at [email protected]. Maybe if we have some really clever fun emails in the next show we can read some of the stuff of and –

Porter Stansberry:

I like the idea of doing the mean tweets.

Buck Sexton:

Mean tweets, mean emails. I’m sure your audience is –

Porter Stansberry:

I like the mean tweets.

Buck Sexton:

- people of impeccable manners. But all right, this has been our first Stansberry Investor Hour. We’ll be back next week. Porter, thank you so much for your time it’s been great .and I thank everybody for listening.

Porter Stansberry:

Thanks, Buck. See you everybody.

Male: Thank you for listening to the Stansberry Investor Hour. To access today’s notes and receive notice of upcoming episodes, go to investorhour.com and enter your email. Have a question for Porter and Buck? Send them an email at [email protected]. If we use your question on the air, we’ll send you one of our studio mugs. This broadcast is provided for entertainment purposes only and should not be considered personalized investment advice. Trading stocks and all other financial instruments involves risk. You should not make any investment decision based solely on what you hear. Stansberry Investor Hour is produced by Stansberry Research and is copyrighted by the Stansberry Radio Network.

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