Stansberry’s Predictive Power

The Worldnetdaily has a column by Porter Stansberry, founder of Stansberry and Associates, a publishing company that peddles nonsense to the credulous. In it, he says that Detroit’s present is America’s near future and that we are heading for a big crash due to too much debt:

Detroit is a living case study of why government efforts to redistribute wealth don’t work. But instead of recognizing any of the lessons of the catastrophe, Obama promises more of the same policies!

Meanwhile, his government is in far worse shape than the city. The only real difference is the president and the federal government are still able to print their way out of trouble, using the Federal Reserve’s ongoing manipulation of the U.S. Treasury market.

But no nation in history became wealthier by printing money and buying its own government’s debts. In every case, inflation soon destroyed the economies and wiped out private savings. Rates on the U.S. 10-year Treasury bond have recently moved from 1.6 percent to 2.6 percent – in the face of continued Federal Reserve buying of $85 billion per month.

The dream that the government could provide prosperity to the residents of Detroit has come to its inevitable end. The dream that the federal government can provide prosperity to the entire country is even more delusional. And it will come to a far worse end.

But late last year, Stansberry was paying huge amounts of money to send emails to the subscribers to several right wing websites claiming that Obama is, in fact, going to make the economy boom so much that we will repeal the 22nd Amendment and elect him to a third term in 2016. Hey, whatever it takes to get people to send him money, you know. None of this is at all surprising. Stansberry is such an obvious joke that even the conservative website the Daily Caller has bluntly called him a fraud and notes his history:

In 2003 the Securities and Exchange Commission filed a complaint against him for peddling false information to subscribers of his financial newsletter. The name of his company at the time was Pirate Investor.

According to the SEC, Stansberry told email subscribers that if they paid $1,000, he would provide a hot investment tip based on inside information from a “senior executive inside the company.” He encouraged customers to purchase stock, promising they would “make a fortune.”

The man who supposedly provided Stansberry with the information denied ever doing so, and many investors lost thousands of dollars by acting on the fabricated information.

The SEC complaint declared that Stansberry “engaged in an ongoing scheme to defraud public investors by disseminating false information in several Internet newsletters.”

Approximately 1,217 individuals took the bait and purchased the report with fraudulent information after reading an email solicitation signed by Stansberry’s pseudonym “Jay McDaniel.” The solicitation was sent to at least 800,000 people, and netted a total of $1,005,000.

In 2007 Stansberry was ordered to pay $1.5 million in restitution and penalties for the scam. The judge ruled that his actions “undoubtedly involved deliberate fraud” and “making statements that he knew to be false.”

Anyone surprised that the Worldnetdaily gives him a platform for his lies? Me neither.

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  • Phillip IV

    Approximately 1,217 individuals took the bait (…) The solicitation was sent to at least 800,000 people

    Only 1.5 per mil utter morons? That’s not even as bad as I might have expected.

    No wonder he’s migrated to WND, he’s bound to find a much higher quote of morons among their readers.

  • blf

    Only 1.5 per mil utter morons? That’s not even as bad as I might have expected.

    Entirely from memory — so I may be easily mistaken — that is roughly the estimate “success” rate of spam e-mails (more-or-less independent of productfraud being hocked).

  • Trebuchet

    And I’ve been having ads for something of the sort right here on FTB. I know you’re aware of the offensive/scam ad problem; I think I’ll actually click one of those to see what it leads to and report it.

    Oops — didn’t see there’s one right at the top of this very page!

    2013! The next financial meltdown begins! A must-see video presentation!

    Dubious future of gold. DOW drops to 3300! Real estate declining another 30%.

    SHOCKING PREDICTIONS REVEALED. Watch Harry’s in-depth video presentation.

    Crap. I’ve messed it up and the ad’s now gone so I can’t click it. I did (I think) capture the link address and will report it.

  • Trebuchet

    Dang, messed that up too. No doubt it will turn up again.

  • Trebuchet

    And turn up it did, as soon as I pressed “submit”. It’s for some clown called Harry Dent. I’d have to enter an email to view the videos and don’t feel like getting the inevitable spam.

  • dingojack

    Detroit’s problems were (I think) mainly to do with rising infrastructure maintenance costs and a shrinking tax base to pay for them. So he’s advocating raising (Federal) taxes?

    Nah didn’t think so.

    Dingo

  • Al Dente

    So a convicted fraudster is making economic predictions based on his dislike of the government and misunderstanding of Keynesian economics. I’m certainly not impressed.

  • machintelligence

    I really want an OBAMA ’16 bumper sticker to rattle the Republican’s cages.

  • F [is for failure to emerge]

    Of course Detroit isn’t in its current state due to business practices and other historical factors. No, its because “redistribution of wealth” nebulously done when no one was looking by some gov or other. OK!

  • iangould

    Al Dente, no he’s making economic predictions based on his intended victims’ “dislike of the government and misunderstanding of Keynesian economics”.

  • matty1

    According to the SEC, Stansberry told email subscribers that if they paid $1,000, he would provide a hot investment tip based on inside information from a “senior executive inside the company.”

    If this had been true would it be legal? I thought most jurisdictions had rules against insider trading. That is using information known only to company executives to beat the market by say selling your share options the day before announcing a loss that will make the share price tumble. It seems to me that selling inside information to outside investors would fall under the same rules.

    Again if it was real I do see that in this case it was a far more straightforward scam but it does look like he was pretending to do something that would have been illegal anyway.

  • raven

    based on his intended victims’ “dislike of the government and misunderstanding of Keynesian economics”.

    And on their probable intelligence.

    The below just came across my news feed. It’s been known for decades.

    And fundies are dumb even by religious standards. They make easy victims and are always sending their money to scammers of one sort or another. And the most common are their fabuously wealthy leaders. This is how Pat Robertson made an easy $1 billion.

    Religious people are less intelligent than atheists, study finds

    Rob Waugh

    .

    Religious people are less intelligent than non-believers, according to a new review of 63 scientific studies stretching back over decades.

    A team led by Miron Zuckerman of the University of Rochester found “a reliable negative relation between intelligence and religiosity” in 53 out of 63 studies. Even in extreme old age, intelligent people are less likely to believe, the researchers found – and the reasons why people with high IQs shun religion may not be as simple as previously thought. etc.

  • http://aceofsevens.wordpress.com Ace of Sevens

    @11: I’m pretty sure you are correct. had this been true, it would have still been illegal, just a different crime.

  • oranje

    Goes along with the text ads I keep seeing for “Stansberry Research.” Sounds like he’s just researching who on the internet is a rube.

    And is it any surprise that he’s okay with growing income and wealth inequality?

  • keithb

    @11 @13:

    Depends on the tip. If it is “When we report the quarterly reports the stock price will dip” it would be illegal. If it is something already published like “Sales on our iToilet are really good”, it is perfectly fine. This is a scam, so it doesn’t have to be *real* insider information.