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Will the Panama Papers have any affect on the markets?

Discussion in 'Stock Market Today' started by StockJock-e, Apr 4, 2016.

  1. StockJock-e

    StockJock-e Brew Master
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    The response so far has been rather muted, Im not sure American markets care much, this kind of breaking news gets lost in the flow.

    Kim Kardashian will tweet herself eating a sandwich and everybody will forget about this major breaking event!

    Some commenst from others

    u/tomuxx writes: "
    The big take away from the leak is not that the rich use tax havens. The leak reveals how these tax havens are used by corporations to avoid taxes and perform very illegal activities, and which corporations these are and what they're doing. It's evidence that can be used by governments to indict corporations for illegal activities and pay huge fines. If this plays out, a company in the spotlight, heavily fined, will see its stock price hurt. This is definitely an opportunity for a few massive short opportunities as things come to light.

    Here'a a really short video with a couple examples of the crimes the leak reveals.

    Here's a fairly lengthy article with lots of details of what's in there . http://panamapapers.icij.org/20160403-panama-papers-global-overview.html

    Both are by the ICIJ - the international consortium of investigative journalists. They're the ones putting it all together."

    TheObeseOne 3 points 16 hours ago

    Norwegian here. The biggest bank DNB is getting flak by everyone for providing services for customers who has used their branch in Luxembourg to set up companies and access accounts in tax havens. Same with another huge Scandinavian bank, Nordea. I'd keep my eyes on the already devastated european bank stocks, the individuals involved arent that important for markets imo. The repercussions however...

    Rusty_Hackleford 1 point 11 hours ago

    Just came here to start this very same discussion, surprised to see so many people here say nothing will happen, well I make a nice buck when I heard Volkswagen had been caught faking emissions numbers, and I'm looking for stocks right now with a bullseye on their back.

    Already several Israeli companies may be implicated, maybe a good place to start looking?, rumor mill also claiming George Soros may be implicated(uncomfirmed), and maybe it's worth looking at any companies linked in any deals with the figures named in the UK, this would be a good place for a few of us to put our heads together?

    Maybe the market overall won't feel the heat, but over the coming days a few companies surely will, and the American list has yet to be released.

    https://twitter.com/ploechinger/status/716763595820941312
     
  2. YLC

    YLC Member

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    I might not be understanding this correctly.

    Assume Person 1 wants to hide a bunch of money to avoid taxes, or getting caught doing illegal deals (such as the selling of women or drugs as the video said), they would use that law firm in Panama to open a "shell company", which is essentially a made-up company. They would then transfer X amount of money from their personal account as an unsecured loan to that newly created shell company. Because it's unsecured, the person/company taking on that "loan" from the shell company is safe because there's no personal data about them.

    My assumption is that this transferring of money from Person 1's personal account to the shell company would require the approval of that said bank. Essentially, this could mean certain banks used by these people would also be part of these illegal activities?
     
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  3. StockJock-e

    StockJock-e Brew Master
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    Exactly banks know that the Panama company is BS, but they don't care, they get paid all the same through transfer fees and other services.
     
  4. YLC

    YLC Member

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    Finally, something I understood correctly! :D

    There's still the US related papers to be released. Seems like financial companies may be in for a rough ride again.
     
  5. StockJock-e

    StockJock-e Brew Master
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    Yeah, US data yet to come!

    While I think its going to be pretty exciting stuff, the truth is most people lose interest and go on to see what crazy thing some celebrity did this week.
     
  6. YLC

    YLC Member

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    I'm just imagining if Trump's name was found in those leaked documents. Oh man, that would be hilarious.

    Some well known celebrities have already been ousted, like Lionel Messi and Jackie Chan. Wondering who else is involved.
     
  7. surfsup

    surfsup Active Member

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    I don't see how the celebrities will affect markets. They are only doing what the law allows, trying to keep more of their money for themselves. I'd probably do the same if I was being advised by tax people on best methods to pay less taxes to an oversized global government.

    As for companies (banks) being involved in prostitution, rape, and other criminal acts, they would need to be proven first. This would be time consuming. What I can say is if my bank CEO was implicated, or evidence showed involvement, I would move my money...but to where? Another corrupt bank? We've already been shown our tolerance for criminal behavior is high when the banks screwed over the world selling crappy mortgages as A rated and needed to be bailed out, then paid themselves billions in bonuses from taxpayer dollars. Name a banker that was prosecuted and served/serves time....?
     
  8. YLC

    YLC Member

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    Celebrities won't affect the stock market. It'll just be funny to see who's involved.

    But I think corporate companies revealed in these documents may affect the market, but it might take a bit of time or have a trickle down effect. They would be under investigation and may end up having to repay the taxes they evaded up until now.
     
  9. StockJock-e

    StockJock-e Brew Master
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    Iceland's Prime Minister resigns amid Panama Papers fallout

    Reykjavik, Iceland (CNN)After widespread calls for his resignation, Icelandic Prime Minister Sigmundur David Gunnlaugsson stepped down Tuesday -- an apparent casualty of the Panama Papers leaks.

    Sigurdur Ingi Johannsson, the deputy chair of Gunnlaugsson's Progressive Party, announced the resignation on national public broadcaster RUV.
    Johannsson said he will take over. But he said Gunnlaugsson will remain head of the Progressive Party -- which might not go down well with some Icelanders who want nothing to do with him.
    Gunnlaugsson had been under intense pressure to step down since leaked documents hacked from a Panamanian law firm revealed his links to an offshore company, triggering mass protests in the capital.
     
  10. DoveJohns

    DoveJohns Active Member

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    It will depend on individual names and companies involved but I dont think it will affect US much. Worst case scenario everything will be resolved silently. Just like it happened back in 2013 (i think) when HSBC was fined for few weeks of profit even though they were proved to be involved in largest drug/terrorism money laundering case. No executives were punished for that bs either.

    Also, what is interesting is most of the names targeted so far are mostly from US opposing countries, namely Russia (Putin), Syria (Bashar El Assad) and China. That's also why I believe US wont get hurt much other than maybe some US celebrity names.

    I think more documents are supposed to be released in May and we will have a better idea after that.
     
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  11. StockJock-e

    StockJock-e Brew Master
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    I agree.

    There will be a big stink at first, then everybody will forget as soon as Donald Trump does something crazy again.
     
  12. Zaysev

    Zaysev Member

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    I guess the impact will be approaching zero, since most of those names are either so well known that a bit of dirty secrets revealed won't affect them, or too rich to even bother. For instance, I have a friend in Russia, whose initial reaction to me telling him about these news was "So what? Like we didn't know those people mentioned in the paper have a cemetery in the closet?" So most people reaction will be "meh...", both in social or financial areas.
     
  13. StockJock-e

    StockJock-e Brew Master
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    Its not like we expect our politicians or celebrities in the states to NOT be involved in drama and scandal.

    Its part of the daily news cycle.
     
  14. Zaysev

    Zaysev Member

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    Yeah. Which is a little sad to admit, considering the overall better quality of government and life in general compared to, say, Russia or Ukraine.
     
    #14 Zaysev, Apr 8, 2016
    Last edited: Apr 11, 2016
  15. Ciao (Sheppy)

    Ciao (Sheppy) Well-Known Member

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    where do I start from?:confused:
    ok the Q was >>> Will the Panama Papers have any effect on the markets?
    straight answer NO

    maybe be those banks involved will drop a bit... IMO when the news come out nearly everything has already been put right....

    I blame a lot the governments because if there could be another tax system maybe many will invest in their own country (I talk about Italy + EU not USA don't know enough about that to comment)
    I am not referring corruption - drugs etc.. money that "they" hideaway but industrialists, singers. actors and so on ...

    I better stop here because my English is a little weak for comment-discussion of this type :(:(
    but I can assure you the "they" tell us what they want then everything will be brushed under the carpet

    I worked for nearly 30 years in Monte Carlo and I could tell you quite a lot what goes behind the scene ....;):);):D
     
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  16. YLC

    YLC Member

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    I think everyone expected these types of people to do this, but no one expected for such huge news to come out. I do think it'll only affect banks involved, but very little to none because in the end it's all about profit. Still, fun news to read about.
     
    Zaysev likes this.
  17. Zaysev

    Zaysev Member

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    Yeah. I guess the biggest impact of such news is a decrease of trading activity when everybody starts reading it :D
     

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