Last night, I dined with an old friend of mine who runs his own manufacturing company. Of all my buddies, he’s by far the most investment savvy. In 2008, he suffered his first portfolio loss, losing 15% compared to 42% for the MSCI World Index.

My good friend, Maurice, a Lebanese-born entrepreneur, still refuses to buy gold, despite my constant warnings about the dollar, long-term inflation and the debt super-cycle possibly imploding.

From just 4.5% last year, the corporate default rate in the United States continues to rise rapidly this year amid a blizzard of bankruptcies. According to Standard & Poor’s (S&P), nearly 66% of nonfinancial companies have below investment grade ratings compared with 50% during the last downturn in 2002 and just 33% in the 1990 recession.

If history is any guide, the all-time high default rate in 1930 might be challenged in 2009 as scores of companies struggle to make ends meet.

Corporate earnings in the United States have literally fallen off a cliff since 2007 with reported S&P earnings down more than 30% in 2008 following a decline of about 16% in 2007. Increasingly, it’s becoming almost impossible to pick stocks that don’t decline several days following a purchase as economic news and earnings continue to rapidly deteriorate.

With many stocks in the bargain bin lately is now not an ideal time to accumulate cheap stocks? Well, maybe not…

As stocks cratered yesterday following Treasury Secretary Tim Geithner’s plan to rescue the battered banking system, several segments of credit posted gains in a volatile session.

Treasury bonds, which have sold off heavily since the beginning of January, managed to rebound sharply yesterday in a flight-to-safety along with gold. Also, some segments of credit also rallied, excluding junk bonds.