The Weekend Edition is pulled from the daily Stansberry Digest.

We've seen some red flags in consumer debt in recent months...

Put simply, credit-card debt among Americans is at record-high levels. Delinquencies are now at their highest level since 2011. And with interest rates higher than they've been in about 15 years, all this points to trouble brewing for consumers.

Today, though, we're looking at a few indicators on the corporate-debt side – starting with "zombie companies"...

Zombie companies don't make enough in profit to cover the interest expense on their debt. And according to data from Apollo Global Management and Bloomberg, as of October, 43% of the small-cap Russell 2000 Index had run at a loss over the previous 12 months.

Outside of the COVID-19 pandemic, that's the highest share since at least 1995. So this is a big deal. If companies can't turn a profit, they can't service their debt. That will lead to delinquency or even defaults.

Nearly half of smaller companies are in danger of this fate.

That brings us to our next red flag...

In mid-February, the Financial Times reported that U.S. businesses were at least one month late on more than $28 billion in debt payments at the end of 2024. That was $5.4 billion higher than at the end of 2023.

You can think of this as the corporate equivalent of falling behind on your monthly credit-card or mortgage payment.

These are big numbers we're talking about. And a rise in delinquencies leads to defaults and bankruptcies.

The U.S. high-yield default rate measures the number of companies with weak credit that defaulted on their debt...

According to credit-ratings agency Standard & Poor's, the U.S. high-yield default rate rose to 5.1% in December. That's the highest level since 2016. And nearly 700 U.S. companies went bankrupt last year... the highest number since 2010 in the aftermath of the last financial crisis.

During a "credit crisis" – when fear grips the market and credit suddenly tightens – the default rate soars past 10%.

So, things can get a lot worse. The trend indicates that we're headed in that direction. As our colleague and Stansberry's Credit Opportunities editor Mike DiBiase says, we are in the early stages of the next major credit crisis.

When investors get worried, they flee to safety...

For many, that means buying U.S. Treasury bonds to generate a safe yield. But increasingly, the government's finances are being put under a microscope.

Uncle Sam has spent $840 billion more than it has brought in so far in the 2025 fiscal year. And its debt load has ballooned to more than $36 trillion. This has led investors to question the government's ability to pay its debts... one of the reasons the concept of the Department of Government Efficiency ("DOGE") is so popular.

After all, two of the three major credit-ratings agencies have downgraded U.S. debt (though both still have it as the second-highest rating). The dollar is still the king of global currencies.

But more and more people are talking about "safe haven" alternatives to U.S. debt.

For example, analysts from DoubleLine Capital – the investment firm founded by bond king Jeffrey Gundlach – recently wondered whether there are corporate bonds that are "safer" than government debt.

Specifically, in a paper published last month, these analysts suggested that software giant Microsoft (MSFT) may have a better balance sheet than the U.S...

The company has $45 billion in long-term debt, which could be paid off completely by the $68 billion in cash the company is now expected to earn in the 2025 fiscal year.

And Microsoft doesn't have to pay off its debt all at once. With regular interest payments, Microsoft has enough cash to pay its annual interest more than 50 times over, according to DoubleLine.

Compare that with the government, which runs at a massive and growing deficit. Its annual interest is set to be its third-largest expenditure.

The credit-ratings agencies agree with DoubleLine...

Microsoft is one of two companies with a higher debt rating than the U.S. government. The other is consumer-goods giant Johnson & Johnson (JNJ).

This idea may sound familiar to some of our readers...

DoubleLine's paper was put forward as a "thought experiment," according to Bloomberg, and the firm has no open position on Microsoft bonds.

But in the May 2024 issue of Stansberry's Credit Opportunities, editor Mike DiBiase did recommend a Microsoft bond – calling it "the safest investment without a money printer."

Like DoubleLine, Mike also highlighted Microsoft's fortress-like balance sheet. Here's what he said in that May issue...

Microsoft has $80 billion of cash in the bank. It could write a check today to pay off all of its debt and still have nearly $29 billion left over. Microsoft also generated enough last year ($59 billion) to pay off all of its debt. It's one of the most financially sound companies on the planet. So it should be no surprise that it earns our highest Stansberry credit-rating-system score of 10.

Microsoft's debt is so safe that Mike and his team didn't even run a worst-case analysis for if the company liquidates. And even the company's heavy investment in artificial intelligence ("AI") – which CEO Satya Nadella said will come in at $80 billion this year – won't change that.

More from Mike...

These large investments don't worry us. Just like with the cloud, we're confident they'll eventually lead to even greater profit margins and cash flows in the years ahead. Companies like Coca-Cola (KO) are already spending billions on Microsoft's cloud platform to access the latest AI technologies.

Mike alerted his Credit Opportunities subscribers to this investment idea 10 months ago. He wrote back then that they had a chance to earn up to 33% within the next year with one of the safest bonds on the planet... And this specific recommendation (available to his subscribers) is still in buy range today.

Mike expects the prices of extremely safe bonds to go higher when the Federal Reserve cuts interest rates to fight an upcoming recession...

You can learn more about these safe bonds and Credit Opportunities right here. You'll hear from a subscriber who used Mike's strategy to retire at age 52... and about the six powerful recession indicators that are flashing red right now.

In short, the red flags in corporate debt are actually a good thing for those who understand Mike's way of investing. He says what's coming could be the best opportunity in a decade for his No. 1 crisis strategy.

He's talking about a potential for triple-digit capital gains... plus double-digit income in investments that he considers "safer than stocks" because of their legal obligations.

Our publisher originally closed this chance to join Credit Opportunities two weeks ago – but because this is such a great opportunity, we're reopening it one more time. Don't miss out.

All the best,

Corey McLaughlin and Nick Koziol

Editor's note: Today, six major recession signals are all flashing red. But you don't need to panic. That's because there's a straightforward way to receive income – legally obligated to come to you – from outside the stock market. And one Stansberry Research subscriber is sharing how he saved his retirement... and stopped worrying about money forever. See the replay of his stunning story here.