#ftr this is hardly a serious question

[debbiechanclub]

Best Two Out of Three, Part 25

BTOOT is back! @hotyeehawman and I would like to apologize for the unintentional three-month hiatus. But it was the holidays, and then life, and lack of motivation... but we’re back! And I hope you all are just as excited about it as we are 😁

But enough talking! Enjoy! And please give us notes and scream in our asks we would very much appreciate it.

Best Two Out of Three

Part: 25/26

Pairing: Kenny Omega x OFC and Cash Wheeler x OFC x Matt Jackson...? And Adam needs to start loving himself, okay.

Word count: 4.6k

Warnings: Language; angst; alcohol use; blood

Catch up on previous parts here.

Tag squad: @freshlysqueezedmox @comeasyoudar @heelchampbucks @librathepheonix13 @gabbynorth98 @irish-newzealand-idian-dutch @exe-sadboi-exe

For a hazy, fleeting second when he first woke up, Adam didn’t remember what had happened the night before. But then his hotel room came into focus, the fog of sleep cleared, and it all came flooding back like a waking nightmare.

He didn’t know how long he’d laid in the middle of the ring after Kenny had let him collapse face-first onto the mat. Seconds that had felt like minutes. Minutes that had felt like hours. The people at ringside had remained painfully silent until he’d finally picked himself up on tired legs and they’d cheered, doing their best to encourage him. But he’d barely heard them as he’d trudged into the back, his hands noticeably emptier than they’d been at the start of the match.

And then, things had somehow gotten worse.

He’d expected to see Alex when he’d returned to the locker room. Hoped to see her. Hoped she would rush over and hug him and tell him something to make him feel anything. But she hadn’t been there. Orange had said he’d just missed her; she’d left and gone back to the hotel. Gone after Kenny. And when he heard that, Adam’s heart had suddenly felt just as empty as his hands.

He laid in bed and stared up at the ceiling, unsure what time it was. He didn’t care. He wanted to go home, but there was no point—he’d just have to turn right back around the day after tomorrow. Plus, he’d booked the hotel room through Thursday. He didn’t want to lose that money, too.

Knock-knock-knock.

He turned his head toward the door, slightly confused. Had someone actually knocked, or had he just imaged it? He started counting. One, two, three, four, five, six—

Knock-knock-knock again, louder that time. And then, Alex’s voice called through the door.

“Adam, it’s me. Please open up.”

He closed his eyes. He didn’t want to see her; not really. He could guess how their conversation would go and he’d rather just avoid it. But he forced himself out of bed, pulled on a pair of sweats, and grabbed his glasses off the nightstand as he shuffled across the room to the door. She’d just started to knock again when he pulled it open. Alex stood on the other side, an anxious look on her face.

“Hey. Can I come in?”

Adam stared back at her in pensive silence. Part of him wanted to tell her no—but he couldn’t bring himself to do it. So, he settled for a smart-ass comment as he let her in instead. “Does Kenny know you’re here?”

A mixture of hurt and surprise flashed in her eyes. But he hardly cared. He was hurt, too. “Yes,” she sheepishly returned. “I wanted to come see how you’re doing.”

He scoffed to himself as he shut the door. “What, were you too busy last night?”

Her face fell. “Don’t do that.”

“Do what?”

“Put me in the middle more than I already am.”

Adam bit down on his jaw. He wanted to tell her she’d put herself in the middle, but he knew that wasn’t fair. It wasn’t even true. She wasn’t the cause of these circumstances. He was.

She brought her hands in front of her to nervously pick at her nails. She looked down at them as she talked. “I’m sorry I didn’t come see you last night. But after Kenny left the arena I had to see where his head was at. And even though I’m not thrilled with how he handled it… you know this would have happened, eventually.”

His brow lowered. “I know what would have happened eventually? That Kenny would abandon me?”

“No,” she returned with a frustrated huff. “That you and him would lose the tag titles… split up. You and Kenny aren’t FTR or the Young Bucks; you’re not meant to be a tag team. You’re meant for other things—bigger things. And now you can go after them.”

Adam rolled his eyes. He wasn’t in the mood for platitudes. “Oh, so is that what he told you last night? That he wants to move on to bigger and better things?”

“Yes. Don’t you?”

The quickness and bluntness of her answer surprised him. It also put him on the defensive. “I don’t know, Alex, I haven’t really thought about it. I’m kind of still processing last night.”

He moved past her to sit down on the bed. She pivoted to face him. “Look, I hate to say this, but… it’s probably for the best.”

Another platitude. He rolled his eyes.

“I’m serious, Adam!” she proclaimed. “When was the last time you were actually happy tagging with Kenny? Or being in The Elite?”

“Do I look happy now?”

It was Alex who rolled her eyes that time. She was getting impatient with his attitude. He didn’t blame her. Deep down, he was waiting for the day he’d drive her away, too.

She looked back down at her hands. “No. But I think you will be, eventually.”

Adam glanced away. He didn’t have anything to say. He didn’t want to have this conversation.

Alex let out a sigh. “I guess I’ll go.”

She turned and started toward the door. Adam felt his chest constrict as he watched her walk away. “Wait.” She stopped and glanced back at him, her hand on the door handle. “Why’d you run after Kenny?”

He had a feeling he knew why, but he wanted to hear her say it. She looked down at the door handle, her brow knitted together. She was debating whether or not she should actually tell him, he knew she was. But, eventually, she looked back at him and said it.

“Because I’m in love with him, Adam.” And then she went out the door.

* * * * * * * * * *

Callie had hoped she would wake up with a clear head. But she hadn’t. In fact, she felt even more confused than she had the night before.

After Kenny had stormed out of the arena, she’d wanted nothing more than to go to Adam. But she wouldn’t let herself. He’d pushed her away just like he had everyone else. Why should she go running to him?

Because you care about him, her heart said. You still love him.

He wants Alex to take care of him, her head returned. Let her go pick him up off the mat.

“Screw this,” she’d stubbornly said as she’d stood from the locker room couch—right as Matt and Nick returned. And then, she’d gotten angry.

“Why didn’t you go with him?” she’d accosted. The look that Matt had given her was a cross between offense and confusion.

“Are you serious?”

“He just needs to cool off,” Nick had interjected before Callie could respond. He was clearly trying to keep the peace. But it was no use; Matt was already out of the blocks.

“Why would we go with him?”

“Why wouldn’t you go with him?” Callie fired back. “Isn’t that exactly what you want, to start over your little club without Adam?”  

Matt’s brow lowered, darkening his eyes. “Callie, you don’t know—” but he cut himself off, running a frustrated hand over his face. And then he asked, “What do you care, anyway?”

Callie faltered then. She didn’t have an answer for him. She didn’t even have an answer for herself.

“I’m not dealing with this right now.” She stalked over to her bag and bent down to zip it up. Matt watched with parted lips as she stood and pulled it behind her to the door.

“Where are you going?”

“Back to the hotel,” she said. And just like that she’d left. Matt had texted her since, but she’d left him on read. And as she rode the elevator down to the hotel lobby, she realized she still had absolutely no desire to talk to him. To even see him.

We rushed into things. She realized that now. She’d latched onto Matt because she was lonely and hurt and he’d given her the attention she’d so desperately craved from Adam. And now she was worried that it had all been nothing but an emotional mistake.

The elevator doors slid open, and she swiftly made her way to the breakfast buffet, praying she wouldn’t run into anyone. She would just get what she wanted and head back upstairs to eat in the privacy of her room—but before she could reach the plates, someone called her name.

“Callie!”

She winced and whirled around. Cash and Dax sat at a table across the restaurant, plates of food in front of them. Cash waved for her to come over. She hesitated, unsure if she should. But she didn’t want to be rude, so she walked toward them.

“Morning,” Cash greeted with a wide smile. She returned it as best she could.

“Morning, and congrats. Hell of a match last night.” She really meant it. As heartbreaking as the outcome of the match had been, FTR had been the better team last night. They’d won the tag titles fair and square.

“Thank you,” Dax nodded in gratitude. “I hope there’s no hard feelings over us beating your boy. Although, from what I understand y’all aren’t exactly a thing anymore.”

Callie noticed Cash give Dax a hard look out of the corner of her eye. But it didn’t bother her. She’d figured word had gotten around by now that she and Adam were no longer together. “No. We’re not,” she frankly returned. Dax just nodded and sipped his coffee.

“So are you moving back home to California, then?”

She looked back at Cash, caught off-guard by his question. Did he assume that because he knew she was from California, or because he knew she’d been staying with Matt? Either way, it didn’t matter. Because she wasn’t even sure that was what she wanted anymore.

“That was the plan… but I’m not sure how set I am on it now.”

He cocked his head in curiosity. “Why’s that?”

She avoided his gaze, running her finger sheepishly along the edge of the table just to give herself something to do with her hands. “It was a knee-jerk decision,” she admitted. “And after thinking about it… I’d honestly rather move here. Well, to Florida. Not necessarily Jacksonville.”

She looked back up at him. He nodded. “Well, if you’re considering Orlando, let me know. I’d be more than happy to show you around.”

The corners of her mouth turned up. “I am, actually. Thanks.” He nodded again, and Callie suddenly felt like she needed to change the subject. “So, I guess you guys are going to the Labor Day party tomorrow?”

They had to be—they’d be gone by now if they weren’t. Her suspicions were confirmed when Dax made an enthusiastic sound in his throat.

“Hell yeah, we are. What would an AEW party be without the AEW World Tag Team Champions?”

She playfully rolled her eyes. “Not letting it go to your heads, I see.”

“Are you going?” Cash asked.

She drew in a deep breath. “Yeah, despite better judgment,” she said with a wry laugh. “I’m not exactly popular around the locker room these days.”

“Us, either,” he returned. It made her smirk.

“Who cares?” Dax dismissed. “Stick with us. We’ll make sure you have a good time.”

Callie glanced at him, and then at Cash. Something about his eyes made her feel calm. They were so warm and brown. Genuine. She smiled.

“Okay. Maybe I will.”

* * * * * * * * * *

Callie arrived fashionably late to the Labor Day Party. She tried to tell herself it was just because she hadn’t been able to decide what to wear, but she knew that wasn’t it. Even with Cash and Dax’s encouragement the day before, she’d needed to drum up the courage to go. A glass of rosé at the hotel bar had gotten her in the Uber and through the doors of Daily’s Place, but she’d need another drink if she was going to hang around.

The din of music and voices greeted her as she walked into the party. She glanced around, looking for a friendly face, only to realize she was subconsciously looking for Adam. She chastised herself and tried to push the thought aside—but she stopped. Adam was nowhere to be seen. She scanned the room again, just to make sure; he always stuck out at things like this. But again, she didn’t spot him.

She did, however, spot Alex. She was on the opposite end of the room, a wide smile on her face as she stood tucked into Kenny’s side talking with Cody, Brandi, and Tony. She probably knows where Adam is, she thought. But she ignored it and made a beeline for the bar. She ordered her usual and pulled her phone out of her purse to text Cash. They’d exchanged numbers yesterday, and she hadn’t spotted him, either—

“Hey.”

Callie’s mouth went dry. She locked her phone before she looked up at Matt. “Hey.”

She expected him to look angry, hurt, annoyed, something. But it didn’t look like he felt any of those things. His face was an unreadable mask. The bartender set her cocktail on the bar top. She picked it up and took a long sip.

“Didn’t care to tell me you were coming?”

There was some emotion. Aggravation, with a bit of resentment around the edges. She had to swallow before she could answer. “You knew I would be here, Matt,” she breathed. “The whole roster is.”

“Adam isn’t.”

Callie went rigid. That was more than just a statement. It was an accusation. “So when you didn’t see either of us here you thought what? That we were off somewhere else together?”

“That’s not what I said.”

“You didn’t have to.”

Matt’s jaw flexed and he glanced away, caught. “Look, I’m sorry, alright? But can you blame me? You haven’t said a word to me since you bit my head off Saturday, Callie.”

Her eyes hardened. “I didn’t bite your head off.”

He scoffed. “You kinda did.”

“Well, can you blame me?”

“Hey.”

Kenny cautiously cut in. Alex peered at them from around his shoulder. Callie let out a breath and took another drink.

“I don’t mean to interrupt… but Tony wants to talk to us about that thing.”

Matt put his hands on his hips. But he nodded. “Yeah, fine,” he said, and he stalked away without a second glance.

Kenny turned back to Alex. “I’ll let you know when we’re done and then we can get outta here.”

“Okay,” she nodded, and he pecked her lips and went after Matt, leaving Callie and Alex suddenly and awkwardly alone.

“I’m just here to get another drink,” Alex said as she stepped past her to the bar. Callie hesitated. She knew she should just walk away; but she couldn’t help herself.

“Hey… have you heard from Adam at all?”

Alex glanced at her over her shoulder. She didn’t answer right away. “Um, yeah. I asked him if he was coming today and he said he didn’t feel up to it. But that’s it.”

Callie frowned, but she wasn’t surprised. If she’d been in his position, she probably wouldn’t have come, either.

The bartender placed Alex’s drink in front of her, but she didn’t pick it up. It looked like she was turning something over in her head, weighing whether she should say it. Callie was about to tell her to just spit it out when she fixed her with a hard stare.

“Look, I don’t know what’s going on with you and Matt, and honestly I don’t care. It’s none of my business. But if there’s any part of you that still cares about Adam, I’d suggest rebounding with someone else.”

And with that said, she grabbed her drink and walked away, leaving Callie standing there, a knot in the pit of her stomach.

* * * * * * * * * *

As soon as Alex left, Callie got a text from Cash. He was at the pool with Dax, Shawn, and Shawn’s wife, Peyton, and he told her she should come join them (I think you’ll like Peyton, you two remind me of each other, he added). When she arrived, she was surprised to see they were the only people there. Cash smiled at her from the water as she walked toward the loungers.

“It’s about time! Did you get lost on the way from the hotel?”

She smirked as she set down her things. “Oh, have you been waiting on me?” she asked, only to blush at how flirtatious it sounded. But if Cash noticed, he didn’t seem to mind.

“Well, you have good timing. We were just about to set up the volleyball net and play a game.”

She nodded as she sat down to take off her shoes. “That sounds f—”

Her words died in her throat when she looked up and saw Cash climb out of the pool. Water trailed down his body, rippling over his chest and abdomen toward the low-slung waistband of his swim trunks. Callie felt her mouth go dry again as she caught herself staring at the muscular definition of his shoulders and pecs. Had he always been that good-looking?

“We should do guys versus girls!” an Australian-accented voice pulled her out of her daze. She looked back in the pool and recognized the speaker as Peyton Royce. She had an excited grin on her face that Callie couldn’t help but return.

“Oh, they won’t stand a chance.”

Dax formally introduced them while Cash and Shawn set up the volleyball net across the shallow end of the pool, and Callie stripped down to her bikini and lowered herself into the water. As they were an uneven number, they decided it would be Callie and Peyton versus Cash and Shawn with Dax as the referee. But just before Peyton could serve the ball, four more people walked into the pool area.  

Orange, Chuck, Trent, and Alex.

They all noticed each other at once. Dax muttered something under his breath. Alex came to an abrupt halt, causing Trent to run into her. Callie tensed and looked at Cash, who looked at Alex, who looked at Callie.

And Peyton waved at them. “Oh, perfect! We were just about to have a game of volleyball. Wanna join?”

Callie sank into the water. Perfect.

None of them said anything at first. The silence was awkward as Chuck glanced around at Orange, Trent, and Alex. He shrugged. 

“That sounds like a terrible idea. Let’s do it.”

* * * * * * * * * *

When Alex had told Callie to rebound with someone other than Matt, she hadn’t meant Cash. She thought that went without saying. Still, she’d tried not to jump to conclusions when she’d walked into the pool area and seen them together. After all, they weren’t alone. They were just co-workers hanging out at a company event. That’s it.

But, even if it was completely innocent, it still rubbed Alex the wrong away. She expected Cash to stoop so low—he was a duplicitous prick—but she was shocked at Callie’s thoughtlessness. She was glad Adam wasn’t there to see his ex literally jumping around in the pool with the guy who’d stabbed him in the back and taken his title.

“Hnnh!” she let out a grunt as she sprung up and spiked the ball over the net. It landed with a smack against the surface of the water right in between Callie and Peyton. At least hitting the ball was a good outlet for her agitation.

“Damn, Alex, this ain’t for the title,” Dax remarked from the side of the pool. She glowered at him—but Chuck fired back before she could.

“What’s the score, Dax?”

Dax’s beady eyes turned hard. “Ten-eight.”

“Ten-eight who?”

“Ten-eight you.”

“Damn right, it is,” Chuck muttered. Alex bit back a smirk.

They all reset, and Shawn served the ball. Chuck easily bumped it back, but when Callie scrambled to hit it over the net, it flew straight up into the air instead. Cash rushed forward as it came back down and whacked it as hard as he could—sending it flying like a missile right at Alex. She didn’t even have time to pivot before it beaned her hard in the shoulder and careened off into the water.

“Shit!” she cursed.

“Point!” Dax loudly proclaimed.

“Really?!” Chuck shouted. “You have something smart to say about Alex spiking the ball but nothing about Cash hitting it as hard as he can right at her?”

“Come on, it wasn’t on purpose,” Cash defended. He looked at Alex through the net. “I’m sorry. Are you alright?”

Alex gripped her shoulder as she stared back at him. It stung from the impact of the wet volleyball and was throbbing already. There would undoubtedly be a nice bruise there tomorrow. However, to Cash’s credit, he seemed genuinely remorseful—but then she noticed Callie roll her eyes over his shoulder. She bit down on her jaw.

“I’m fine.”

He frowned, but she turned away and looked at Trent. “Are you sure you’re okay?” he asked.

She nodded. “Serve the ball.”

She rolled her shoulder and turned back to face the net. Trent served the ball. It went right to Peyton and she hit it back over. Orange popped it up, and just like she had before, Alex spiked the ball to the other side.

Crack!

“FUCK!”              

Except that time, it hit Callie right in the face.

Blood poured from her nose and dripped into the pool. Peyton told her to pinch her nostrils and tilt her head forward. Cash rushed to her side through the water. He glared daggers at Alex.

“What the fuck, Alex?”

She opened her mouth to say it was an accident, to assure them it was, but no sound came out. Her vocal cords were frozen.

“It was an accident,” Trent returned.

“Didn’t look like it from here,” Dax chirped.

“Oh, shut up,” Chuck groaned.

“It was an accident!” Alex finally blurted. She looked at Callie’s retreating back as Cash helped her toward the pool steps. “Callie, I’m sorry.”

But she didn’t acknowledge her at all, and then Cash whisked her away, holding a towel to her nose. Thankfully, Dax went with them.

“Well, I guess that’s the end of that,” Shawn awkwardly announced. Peyton shot him a chastising look, and then they exited the pool and left, too.

Alex stared in silence into the water. Her nose burned. She hadn’t meant for that to happen. She hadn’t meant for Callie to get hurt. She didn’t want it to be like this between them anymore. She wanted her friend back.

“Hey,” Trent waded over to her. She felt him put his hand on the small of her back underneath the water. “It was an accident,” he gently repeated. “She’ll be alright.”

Alex’s nose burned even more when he said that. “I’m gonna go see if Kenny’s ready to leave,” she said, and she didn’t wait for a response before she climbed out of the pool, grabbed her things, and left.

* * * * * * * * * *

Steam fogged Callie’s hotel bathroom mirror. She wiped it clean with her hand, frowning at her reflection. The volleyball had left her with not one, but two black eyes—the left was worse than the right. At least it hadn’t broken her nose. But, at this point, a broken nose would have been the least of her problems.

She didn’t think Alex had done it on purpose. She’d said it was an accident and she believed her, no matter how much Dax had tried to convince her otherwise while Doc Samson had examined her. Afterward, as she’d left Daily’s Place with FTR, Tony had asked her if she would be good to wrestle the mixed tag match on Dynamite. She’d almost told him no. Not because of her nose, but because she wasn’t even sure she wanted to wrestle Alex anymore, let alone with Matt. She wondered if he’d heard what happened yet. She was already bracing herself for his reaction.

She dried off from her shower and wrapped a towel around herself as she walked out of the bathroom. She pulled her phone off the charger, and when the screen lit up, she saw she had a text from Cash.

How’s the nose?

She sighed as she typed out her reply. The nose is fine, but the eyes not so much. I have twin shiners.

She tossed the phone on the bed and started to walk away to get dressed, but it pinged again and she looked back at the screen.

That’s alright, you’ll just look like a bad ass for your match.

Callie bit back a grin. She opened the text to write back, but those three dots appeared. Cash was typing again—and she didn’t expect his next message.

Are you up to get dinner? My treat.

Her gaze turned distant as she stared at the text, her thumbs hovering over the screen. She didn’t know what to make of his offer. Was it platonic? Did he feel sorry for her like he had when they’d gotten dinner last month? Or was it something more?

But it couldn’t be something more. It would be way too messy. Messier than Matt.

Then why did she want to say yes?

She shook her head of the thought as her fingers flew over the keyboard. Thanks, but I’ve already decided on room service and trash TV tonight. But I’ll take a rain check?

She bit her lip and hit send before she could stop herself. The three dots popped up near instantly.

I’m good with a rain check. How about tomorrow? I was actually gonna ask if you wanted me to show you around Orlando since you’re here.

Callie’s eyebrows arched. In trying to dodge a bullet, she’d only to given him more ammo. “Fuck.”

Knock-knock-knock.

She jumped at the sound of someone at her door. “One minute!” she called. She tossed her phone aside and hurried to get dressed, thankful for the interruption. But when she pulled open the door, her stomach dropped.

Matt. His brow furrowed with concern when he saw her. “Jesus, are you alright? I heard what happened at the party.”

“I’m fine,” she said. “Who told you?”

“Tony,” he answered. And then, “And when I asked where you were, he told me you left with FTR.”

Callie fidgeted with the door handle. “Yeah. They gave me a ride back to the hotel. I didn’t really feel like sticking around after getting hit in the face with a volleyball.”

A short, breathy laugh escaped Matt’s lips and he looked away down the hall. Callie’s brow furrowed. “Is that a problem?”

“What’s going on, Callie? I mean, just over a week ago you were in my bed, planning on moving back to California, and now you’re avoiding me.”

His eyes bore into hers. Hurt, angry, just like they’d been when he’d confronted her at the party. Callie had to look away. It gutted her to see it.

“You can’t even look at me.”

“I’m confused, okay?” she blurted. “This all happened way too fast.”

Her heart pounded in her ears and her chest constricted. She hadn’t wanted it to come out like that, but she felt backed into a corner. And if Matt had looked hurt before, he looked positively betrayed now.

“Yeah,” he nodded. “Yeah, I guess it did.”

And with one final hard look he turned and left, and for the second time that day Callie was left alone and even more conflicted than she’d been before.

[retirementmillionaire]

Is the Credit Boom About to Become a Credit Bust?

Doc's note: The economy and stock market are still booming, but now the financial "tide" is rolling out... The Federal Reserve is now raising rates and unwinding its massive stimulus program for the first time in nearly a decade. Credit is tightening, slowly but surely.

According to my good friend and Stansberry Research founder Porter Stansberry, there's one major consequence of this that nobody ever talks about.

Today, I'm sharing a recent issue of the Stansberry Digest, where Porter shares the details of this consequence, why he's concerned about the credit markets, and what these problems mean for the stock market.

What's happening now could lead you to the single best opportunity you'll ever have to make a literal fortune in the markets. And Porter is showing his Stansberry's Credit Opportunities subscribers the absolute best and safest way to take advantage of this opportunity.

Click here to learn more.

*****

On April 27, just over two months ago, I (Porter) wrote a Friday Digest warning you about a growing threat to our current bull market...

There are serious problems in the underlying fundamentals of our equity and credit markets. Rising interest rates are going to expose these problems, accelerating the inevitable end to the current credit cycle and this bull market in stocks.

In today's Digest, I want to update you on the indicators I told you to watch and discuss what the deterioration of these indicators means. Ideally, you'll be able to see for yourself that these problems are getting worse. What you can't do is rely on the mainstream media to warn you about a credit-default cycle. They will tell you the exact opposite of what you should know – all the way down.

So... with apologies to those this offends... remember that there's no such thing as teaching, only learning. Let me show you why I'm concerned about the credit markets and what these problems inevitably mean for the stock market. Please... don't hesitate to ask me follow-up questions or to pose alternative narratives. The more involved you become in these ideas, the better they will serve you.

And if you don't understand everything immediately, don't worry. These topics are complex. Just keep reading. Keep asking questions. Keep thinking about what's happening. Even if you totally disagree with me, you will still learn something, I'm sure.

As you might recall, the gist of the problem is simple...

For almost a decade, artificially low interest rates allowed individuals, businesses, and governments around the world to vastly expand the use of debt financing.

It hardly matters now, but this wasn't a mistake. The global interest-rate manipulation of 2009-2017 was required to save the global financial system as trillions of dollars lent against real estate and real estate derivatives were headed into default.

Losses of this magnitude had to be "socialized" – financed through a currency devaluation – or else almost every bank in the developed world would have failed, leading to massive losses for depositors. Depositors, as politicians would remind you, vote. And when their deposits disappear, they riot.

Alas, in a world dominated by democratic governments, banks won't fail but currencies sure will. (Sadly, that punishes savers and excuses debtors... producing an economic system that rewards perfidy. Ain't the government grand!)

But like I said, the why hardly matters anymore.

The question everyone should be focusing on today is how this unprecedented interest-rate manipulation/global devaluation will impact the markets going forward. What are the unintended consequences going to be?

There will be consequences, that's certain. There's no free lunch.

Here's one consequence nobody ever talks about...

There's been a massive decrease in the purchasing power of major paper currencies. Over the past 10 years, gold has risen about 50% from around $800 an ounce to more than $1,200. The value of gold didn't change a whit. It was the purchasing power of the dollar that fell.

The impact of this devaluation has been muted by rising productivity (thanks to technology), a massive increase in American oil production, and a generally weak global economy. But... there's no question that the collapse in real wages has led to a shift in politics around the world and a huge increase in the wealth gap between asset owners and labor.

What's another very important consequence? Let me explain it this way...

My family lost a beloved black Lab (Ringo) late last year. We got a new puppy (Hank) early this year. If you've ever fed a black Lab dog food, then you'll know exactly what happens when you tell businesses, consumers, and governments that they can borrow virtually as much money as they want for almost nothing. It's like an explosion in the dog bowl. Kibble goes everywhere. And it's hard to believe Hank doesn't choke himself to death trying to eat that fast. Well, the same has been true with credit issuance. It's been an explosion. Kibble has landed everywhere.

In America, federal debt more than doubled. Corporate debt soared to levels never seen before. U.S. non-financial corporations now hold a higher percentage of debt to GDP than ever before (over 45%!). We've seen five straight years of higher and higher levels of consumer debt (to over $13 trillion), far outpacing the total amount that led to the crisis in 2008.

And there's no sign these dogs are satisfied yet.

They're still gulping and slurping and throwing it everywhere. In fact, you'll never guess what's leading consumer debt higher now, at this stage in the cycle. You'll never, ever guess... mortgages... specifically, a new type of Fannie and Freddie mortgage product. It's called "The Conventional 97." It only requires a 3% down payment.

What's "conventional" about this kind of loan? Nothing, of course. No private lender would ever make a loan like this where the lender is taking all of the risk.

Who would make a loan like this? The government, of course. Our core economic policies are so incredibly harebrained that I can't make up a more ludicrous story. But this isn't a joke. It's actually happening. Mortgage balances are soaring. And, of course, home prices are too, far outstripping wage gains. You know what will happen next. Talk about "Groundhog Day."

The hard part about this kind of macroeconomic research/strategy is timing.

It's woefully difficult to know when a credit boom will become a credit bust. You should know that I thought the cycle was turning back in the fall of 2015. Interest rates couldn't get any lower... or so I thought. Then many sovereign rates went below zero! And the boom continued.

So... what's different this time? One critical thing.

The world's leading central bank – our Federal Reserve – is now raising interest rates. The most important interest rate in the world is the U.S. 10-year Treasury note. This is the most fundamental cost of credit, globally. This is the "benchmark" U.S. interest rate, and it is the price against which all other interest rates are measured.

In mid-2016, the yield of the U.S. 10-year hit an all-time low of 1.38%. It has since doubled, reaching more than 3%. (It now sits at about 2.8%.) A 10-year U.S. Treasury yield above 3% gives savers a "risk free" way to earn a reasonable return. For now, it beats inflation. This kind of safe, liquid "home base" for global capital hasn't existed in about a decade. And that's what's putting so much pressure on credit markets and foreign currencies around the world. A lot of capital would rather be safe than sorry.

So... you'll remember I told you to it's time to watch a few specific corporate credits.

Three of the worst, highly indebted companies that can't afford their interest obligations include fixed line telecoms operator Frontier Communications (FTR), mobile telecom Sprint (S), and car rental company Hertz Global (HTZ). These stocks have all tanked. Since April 27, Frontier is down 41%. Hertz is down 30%. And Sprint is down 17%.

Frontier's stock chart looks like a major breakdown... like it's heading to zero, directly. Lot of money is at risk here: The company carries more than $17 billion in net debt. What's surprising is that the company's bonds (the Frontier 10.5% bond due in 2022) slipped below par ($100) in May last year and traded down to about $75 at the end of 2017. The bond market seemed to finally "get it." But since then, the bond is up more than 20% so far this year and is trading around the $90s today. That makes no sense. Are bond traders asleep at the wheel?

I've seen more and more of this lately.

Bond investors seem to be far too complacent today. We saw this last year with now-bankrupt toy retailer Toys "R" Us. Its October 2018 bond traded around par as late as last August before collapsing 80% to around $20 in a matter of two weeks. Bonds don't normally go from over par to less than $90 in a day or two. They don't normally go from above par to being in liquidation in less than a year. But that's happening more and more often. Why?

In the case of some corporate bonds, they're limited to institutional buyers and only a few trade each day. If you're going to use bond prices as a barometer of a company's health, you should make sure they're actively traded bonds. If not, you're probably buying a bond that simply doesn't have many people watching it closely, or the bond's owners don't have the liquidity to sell effectively.

Either way, the bond price you're thinking is reliable probably isn't. In general, bond market liquidity is way, way down since 10 years ago. That's changed the reliability of these prices.

I also told you to watch the big U.S. corporate high-yield bond funds.

The two major ones are the iShares iBoxx High Yield Corporate Bond Fund (HYG) and the SPDR Bloomberg Barclays High Yield Bond Fund (JNK). Both are down fractionally, so far.

As I said, the bond market, as a whole, has been slow to react to problems in this cycle, because it doesn't have nearly as much liquidity today. That's going to cause a big problem if investors all try to exit these funds at the same time (which, of course, they will).

Finally... the advanced part of this discussion...

If the idea of a "spread" between interest rates confuses the heck out of you, don't worry. It takes most people a long time to understand this concept.

I'll try to make it as easy as I can for you to understand. Safe bonds, like U.S. Treasury securities, set a floor for interest rates. They're the safest bonds in the market, so they offer the least amount of yield for investors. You can measure how much risk is being priced into corporate bonds by comparing their yields with the government-bond yields. The difference is known as the "risk spread."

If I'm right and we're at the beginning of a big default cycle, we should see the risk spread growing as investors begin to demand more and more yield for the risk of holding corporate bonds instead of sovereign bonds.

Since early 2016, this measure of risk in the corporate bond market had been declining, from a spread of about 550 basis points (5.5%) to around 200 basis points (2%).

That is, holding a basket of high-yield corporate bonds was paying investors 2% more annually than holding U.S. Treasury securities with matching maturities.

To put it in even plainer terms... in exchange for holding corporate high-yield debt, instead of U.S. Treasury securities, investors were only demanding $20 a year more per $1,000 bond. At some point soon, the fact that investors were demanding so little premium to hold riskier bonds will be viewed as one of the most important signs of how far this credit bubble grew.

It is nuts to believe that a $20 annual premium is nearly enough compensation for the added risk of a high-yield bond compared with a U.S. Treasury.

The risk spread in the bond market has been growing since I wrote this warning in April. For the first time since January 2016, the spread seems to have broken an important technical barrier. It has "broken out" to a new high point on the chart. That could be an important signal of a trend change in corporate interest rates. The spread is currently greater than 250 basis points (2.5%). That's roughly a 25% increase off the lows.

I will start to get more interested in buying carefully selected high-yield corporate bonds (trading at a wide discount from par) when the risk spread goes over 500 basis points.

When that happens, you will be able to find bonds trading with 10% annual yields and total returns at maturity in excess of 15% annually. But... until then... I expect most high-yield bonds to be bad investments, on average. Likewise, you should strictly avoid owning any highly indebted stock, especially if it cannot currently afford its interest service.

I will continue to follow these trends and report on them as necessary in my newsletter, Stansberry's Credit Opportunities, which follows the corporate bond market closely and recommends distressed credits we believe won't default.

But you don't have to wait for the crisis to start profiting...

My Stansberry's Credit Opportunities subscribers have already seen impressive returns.

Since launching this publication in November 2015, my team and I have made 24 actionable recommendations of discounted or "penny" bonds. We've closed 15 of these positions so far for an average annualized gain of 33%. These returns trounced the 17% annualized returns you would have earned if you invested in the U.S. stock market instead.  Yet we did it in the "boring" bond market... taking far less risk than buying stocks.

And all this before the biggest and best opportunities in the bond market have even arrived.

We just released a brand-new presentation where my team shares everything you need to know about these opportunities. Watch it – and learn how to get two free years of Stansberry's Credit Opportunities – right here.

Regards,

Porter Stansberry

July 5, 2018