A new political crime
bigger than Watergate? 5/9/16
I recently learned about
an ongoing financial crime; by far the largest in history. According to sources
that I trust (and based on my own team’s research to verify these claims),
something around $100 billion in dividends has already been stolen. Up to $1
billion a month continues to be taken, in what must be the most brazen
corporate crime in history. To give you some idea about the scope of this crime
(and how big this story will become), the fraud at Enron resulted in the
collapse of a $40 billion corporation. What has been stolen in this case is
already almost twice that much, in cash.
The most shocking aspect
of this case, however, isn’t its enormous size and it’s the largest corporate
fraud of all time. What’s truly shocking is that the people behind this fraud
were working for the government when the plan was implemented. They’ve been
using "executive privilege" as an excuse to cover their tracks,
insisting that 11,000 documents that detail how this happened may be vital to
national security.
I had heard rumors about this situation for
years. Several hedge-fund friends of mine had asked me to look into this,
because I’m something of an expert on the companies at the center of this
scandal. But honestly, it all sounded too incredible for me to believe.
It’s a story that reads
like a Bourne novel and probably involves the president of the United States.
Meanwhile, there’s a growing group of incredibly powerful people (such as
Senator Charles Grassley, Chairman of the Judiciary Committee) who believe that
something sinister and illegal has transpired and is now being covered up.
Grassley’s involvement
caught my attention; he isn’t a tinfoil-hat conspiracy theorist. But what
really changed my mind about the situation happened last month when a federal
judge insisted on releasing some of the 11,000 documents.
I couldn’t believe what
I was reading.
Right there in black and
white is proof that a senior U.S. Treasury official (Tim Bowler); someone who
regularly meets with President Obama about these same matters was conspiring to
steal tens of billions of dollars from two privately owned U.S. corporations.
And it’s not just that. These documents also included the names of several
journalists on the staff of a prominent financial publication, who seem to be
implicated in this scheme.
As this story unfolds, I believe it will come
to rival Watergate as the best-known example of graft and corruption at the
highest levels of Wall Street. Why should you care?
Well, I believe the
documents I saw last month prove the existence of a conspiracy among dozens of
Treasury officials, journalists, senior administration officials, and even the
president that is designed to defraud tens of billions of dollars from these
two companies. And this is an ongoing fraud; with so-far-unknown beneficiaries.
Meanwhile, investors in
these two firms have seen their share prices wiped out. Eviscerated. Their
balance sheets have been ransacked. Their earnings have been stolen. Their
dividends have been confiscated. And I believe there is now clear and
undeniable evidence that the government stole this money in an illegal
conspiracy. When all of the details are finally discovered, I’m almost certain
that investors will recoup $75 billion or more. It’s a large enough potential
lawsuit to drive these shares up by 10 times.
In my mind, this case
represents the best opportunity investors have to make a killing in an investment
vehicle that isn’t tied to our economy. In short, the outcome of this
investigation and these lawsuits will drive the value of these companies
higher, regardless of what’s happening in the broader market. It’s these kinds
of "uncorrelated" opportunities that we’re looking for now, given our
fears about a looming, massive bear market our fears about a looming, massive
bear market
.
All of what we know so
far is detailed in the May issue of my newsletter, Stansberry’s Investment
Advisory, which hit inboxes tonight. We had our team, including a lawyer and
two auditors study the documents that have been made public so far and combine
this new information with our long history of studying these businesses.
We think this is one of
the best, most "asymmetric" risk-versus-reward situations we’ve ever
found for investors. This should be the greatest investment story we’ve ever
reported on by a wide margin. So even if you don’t normally read my newsletter,
I would urge you not to miss this issue.
OK, that’s a pretty
dramatic story. But it’s all true. And when you learn what’s happened, I
promise you will be shocked and outraged; even if you’re already as cynical as
I am about politics and the leaders of our country. (Trust me, Russia isn’t the
only country led by kleptocrats.)
But what should you do
with this information? How should you manage the risks involved? How should you
allocate this investment idea into your portfolio? These questions will be just
as important, or more so, than understanding the facts of the case and the
investment implications. How you use our investment ideas is at least as
important as the investments we recommend.
Source: Porter
Stansberry, May 6, 2016
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