It's About to Be 2008 All Over Again

Episode #338 | December 4, 2023

Episode #338 | December 4, 2023

It's About to Be 2008 All Over Again

In This Episode

On this week's Stansberry Investor Hour, Dan and Corey are joined by two guests – Joel Litman and Rob Spivey. Joel and Rob head up our corporate affiliate Altimetry as chief investment strategist and director of research, respectively. And now, they're weighing in on some hotly debated topics... such as whether we'll see a dreaded triple top for the market, what the new year will bring, and the inevitability of a recession.

But first, Dan and Corey remember Charlie Munger by reviewing his career and legacy. Plus, they cover Elon Musk's recent remarks against Disney, the chances of X (formerly known as Twitter) going bankrupt, and Musk's efforts to bring free speech to the platform.

Next, Joel and Rob join the show to discuss the narrative around a soft landing, the rolling-recession "nonsense," and investors getting lulled into a false sense of confidence and believing everything is fine in the markets. Joel details the macroeconomic signals that are flashing globally – from China's failings dragging the world down to hyperinflation and recession in multiple Latin American countries. While explaining why he and Rob have recently made a major change in their forward market outlook, Joel says...

We've been bulls for, my goodness, since 2009. And in 2020 – at the bottom in March, April, May – we were bulls also then. But now that we have all these signals lining up, of course we have to sit back and go "this is different"... You have everything setting up for what's going to be another 2008.

Rob adds that another reason for their bearishness is the current credit environment. Credit is the lifeblood of the American economy. But now, it's disappearing. And according to Rob, that will further hurt economic growth...

We're seeing consumers and corporates now running out of that piggy bank that they had. And so the fact they can't get access to credit actually starts to matter. And that's why we've actually been really concerned.

And Joel explains that this same setup happened at the beginning of the great financial crisis...

This looks so much like October 2007 right now, particularly with the rally that we're seeing in the market, that this is that last hurrah before all the real fundamentals kick in and people say, "Oh, wait a second, I've got to get out."

The conversation then shifts to Fed Chair Jerome Powell's devotion to lowering inflation to 2%, the reality of "structurally higher" inflation, and how high interest rates are leading to massive investing opportunities in near-term cash-flow companies. Rob notes...

The biggest thing that happened last year was the crash that we saw for all those tech companies that had gotten so inflated... Because at zero interest rates, guess what, a dollar of earnings in 15 years that might happen is worth as much to you as a dollar of earnings today that we actually know is here. But all of a sudden, at a 5% interest rate, it matters if that dollar is here or [might arrive] in 15 years.

Finally, Joel and Rob discuss the bond market and why they find it so attractive today... give their opinions on "terrifying" business development companies... and analyze the Fed's next moves in regard to unemployment.