This Triple-Whammy Aftershock Could Be the Best 379% “Insurance Policy” You’ll Ever See…
While everyone has been watching the stock market fall into a sinkhole, hardly anyone’s been looking at the insurance companies. This aftershock is big.
It’s a triple-whammy aftershock, one rife with a string of gains, starting with a 379% winner. And it’s happening right now at light speed.
For starters, the credit crisis and collapsing stocks have pounded all the insurers. They’re losing money on their investment portfolios. No surprise there. Yet few understand the real reasons why. What they don’t talk about is this:
They’re also losing HUGE amounts of money on the annuities they wrote. That’s Whammy #1. You see, the underlying investments that sustain those annuities are nowhere near enough to cover the minimum return guarantees they wrote to those policyholders. You won’t hear about this on CNBC or MarketWatch.
Whammy #2 is this: Commercial, public, and private companies, big and small, are cutting back on employees. U.S. unemployment is now at 6.5% and expected to reach 8% in the coming months. Let me put it this way:
Insurance companies are NOT adding to the ranks of the insured… Most are losing program participants in record numbers.
Whammy #3: Here’s what else you won’t hear about in the media. Some insurance companies hedged their portfolios and some didn’t. And some who did hedge are now losing more on their hedges than on their portfolios.
Many companies are going to go bust because they actually thought they were protecting themselves with complex hedging strategies. They’re in for a coming aftershock that could make you some hard cash…
So who’s going to win and who’s going to lose? Here’s what we’re looking at right now…
Hartford Financial Services Group… It’s been a great short play. It fell 52% IN ONE DAY at the end of October. It was at $8.23 just a few weeks ago, down from its 52-week high of $98.70.
But get a load of this. It’s getting financing from German giant Allianz SE, the owner of PIMCO, who Hank Paulson just hired to help manage its TARP rescue program. Hartford is about to end up in a merger. Several candidates are lining up.
With potential financing from Allianz and Paulson, Hartford is in line to retrace at least a third of its stock price.
We’re looking at the probability of a short-term pop of 379%.
Now let’s look behind the curtain at Aetna Inc. It’s bouncing off its lows of $21.25, and it just reported a 44% decline in third-quarter net income. But this investment loss is now out of the bag and priced into the stock.
The fact is, its 3Q revenues and membership actually rose. It’s a strong candidate that’s actually looking for acquisitions. Our strategy shows that it’s likely to make a run back to $60. We’re looking at a potential 182% gainer…
Now let’s look at Cigna CP. It’s had a good 65% bounce from its recent lows, but now it’s looking heavy again. It posted a 53% drop in 3Q profit and trimmed its enrollment and earnings forecasts.
Look behind the curtain and we see it has an extraordinarily high attrition rate within its employer group plans. When events dictate, we’ll recommend you short this puppy and ride it down for a potential gain of 50% to 75% in your pocket…
And yet there’s so much more. Aegon NV, one of “big boys” in worldwide insurance (which also owns Transamerica) is considering tapping into the Netherlands bailout fund.
The ING Group has already tapped into this fund. Now we’re looking for these two giants to merge, creating one of the biggest insurers in the business – all while a number of others are about to go out of business. This is a game-changing merger…
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With less competition, buying either of these companies at the right time will likely result in an easy double. We’ll be there to pull the trigger when the time is right.
Yet this is just the tip of the iceberg. Get ready for another event we’re looking at – one set for some heathy gains…
Thanks to Paulson and the U.S. Treasury, You Could “Ring the Cash Register” On This Aftershock…
Henry Paulson and the U.S. Treasury have been riding roughshod over one constitutional law after another. So get a load of this “regulation” aftershock that’s setting up for a fast gain.
It’s an event that has the potential to hand you 87% in the coming weeks.
It has to do with Wells Fargo, Citigroup and Wachovia, and it’s a doozy. Maybe you read about it in the WSJ.
Wells Fargo just beat out Citigroup to take over Wachovia, the banking giant.
But what you might not know is this: Citi was going to pay about $2 billion for Wachovia… and then Wells stepped in and offered an astounding $14 billion.
That’s 7 times what Citi was willing to pay.
Doesn’t make any sense, right? In fact, why would either bank even want Wachovia, which comes with a toxic portfolio of over $312 billion of junky mortgages?
Here’s the EVENT that will blow your mind – the one nobody is talking about… the one that explains why Wells is paying SO much for this failing bank.
Wells agreed to pay so much more than Citi because Wells got a big fat gift from the U.S. Treasury. The gift was a one-sentence ruling issued on September 30.
In it, Treasury effectively allowed Wells to be able to write off ALL the losses on acquired portfolios.
Sounds simple but hold on…
According to U.S. Tax Code, Wells should have only been able to deduct part of any losses, and only over 20 years. Now, Wells says it expects $75 billion in losses from Wachovia’s portfolio – but they can write that all off and expect a tax savings of more than $19 billion.
Guess what? That’s $5 billion more than the $14 billion they are paying – thanks to Hank Paulson’s “secret” ruling!
So why not back up the truck and start loading up on Wells’ stock? What a bargain, right? With Wells sweeping billions under the carpet, this is going to be one sweet deal…
ABSOLUTELY NOT. And let me tell you why:
- First, when a loss that big hits the books (and that’s the trigger event), shareholders are going to be running for the hills, selling at any price they can get.
- Second, Treasury has just trashed the U.S. tax code. It has no authority to make such a dramatic deal. So what will happen when this news gets out?
A HUGE backlash.
When investors find out that Paulson single-handedly doled out a loophole to this rich bank – the same one that outbid Citi by $12 billion – something smelly’s about to hit the fan.
This event is just waiting to happen. It’s a slam-dunk. And when it does, you could already be getting fat on the fall in Wells stock price.
With banks like Morgan Stanley swinging as much as 87% in a few days, your gains could likely meet or exceed that just as quickly. If you know when and how to play this.
The best part is… This is just one of many banks trying to cook their balance sheets and manipulate the regulations.
Right now, our strategy is tracking similar plays hidden behind gimmicky accounting standards being pushed by the banks, such as:
- The giant German bank that will be forced to de-leverage from its current astronomical 55-to-1 capital ratio. Before it does, we’ll short it for an estimated gain of at least 25%.
- Two recently merged, second-tier U.S. banks are about to face the loss of tax-advantaged gains from recent accounting changes. Look for fast gains of 50% to 75%.
- One bank in particular has already gotten bailout money from Uncle Sam. It made the mistake of announcing it was going to use the money for acquisitions instead of lending. The furor is about to result in Congressional backlash or retraction of the funds. Or it may be forced to lend the funds at a tiny margin. No matter which scenario happens, you could make 27% to 50% on its way down…
