Major World News: Gigantic Panama Offshore data leak 2.6 TB largest in history

[BillBoard]

Re: Major World News: Gigantic Panama Offshore data leak 2.6 TB largest in history

idk, jk, your reply seems naive, and clearly you are not. Offshoring is not necessarily criminal, as we know. But like Martin Armstrong points out, governments are desperate for wealth to tax and the US is one of the most ferocious fiends. The game looks pretty clear to me, everyone that can steer capital into their jurisdiction will do so whichever way they can, unless it does not benefit them for some particular reason.

[jk]

Re: Major World News: Gigantic Panama Offshore data leak 2.6 TB largest in history

here's another slant from brookings: the absence of americans is the dog that didn't bark.

Are the Russians actually behind the Panama Papers?


The “Panama Papers”—does this strike anyone else as a very fishy story? It’s like something out of a cheap spy movie.
In early 2015, “John Doe” sends (out of the blue) an email to the German newspaper Süddeutsche Zeitung (SZ), offering 11.5 million documents from a Panamanian law firm relating to offshore shell companies. SZ accepts. Under the International Consortium of Investigative Journalists (ICIJ), some 400 journalists from 80 countries spend a year sifting through the documents. Then, in a coordinated launch, they present their first findings: With nearly identical language in all media (down to the local TV station in Washington that I happened to watch this week), they talk about the grand new revelations of corruption, money laundering, and financial secrecy by over 140 world leaders.
Most reports, no matter where, feature Russian President Vladimir Putin as the headliner. But that might obscure a much bigger and more twisted story.

The dog that didn’t bark

Despite the headlines, there is no evidence of Putin’s direct involvement—not in any company involved in the leak, much less in criminal activity, theft, tax evasion, or money laundering. There are documents showing that some of his “friends” have moved “up to two billion dollars” through these Panama-based shell companies.

But nothing in the Panama Papers reveals anything new about Putin. It is in fact far less of a story than has been alleged for a long time. For over 10 years, there have been suspicions that Putin has a vast personal fortune, claimed at first to be $20 billion, then $40,$70, even $100… And now all they find is “maybe” a couple of billion belonging to a friend?

This is the dog that didn't bark.

Some (geo)political context is important here. In recent years, the media has become a key battleground in which Russia and the West have attempted to discredit each other. Early last year, circles in the West sought to use the media to respond to what they described as Russia’s “hybrid warfare,” especially information war, in the wake of the Russian annexation of Crimea and related activities. They identified corruption as an issue where Putin was quite vulnerable. It’s worth looking at the Panama Papers in that context: Journalists are targeting Putin far out of proportion to the evidence they present.

As soon as one delves below the headlines, it’s a non-story. A “friend of Putin” is linked to companies that channel a couple of billion dollars through the offshore companies. Why? To evade Russian taxes? Really? To conceal ownership? From whom? You don’t need an offshore registration to do that. To evade sanctions? That’s a credible reason, but it makes sense only if the companies were registered after mid-2014. Were they?

This information will not harm Putin at all—instead, it gives Putin cover, so he can shrug and say: “Look, everybody does it.” A more serious possibility is that the leaked data will lead to scandals throughout the West, where corruption does matter—a point I’ll discuss. On net, the Russians win.

The cui bono principle connects profits with motives, asking who stands to gain from a certain action. If it’s the Russians who win, isn’t it possible that they are somehow behind at least part of this story?

Who is “John Doe”?

The ICIJ is the self-described elite of investigative journalists—but what have they discovered about the source of all these documents? The only information we have about John Doe is from SZ, which begins its story: "Over a year ago, an anonymous source contacted the Süddeutsche Zeitung (SZ) and submitted encrypted internal documents from the law firm Mossack Fonseca." When the staff at SZ asked John Doe about his motive, he reportedly replied in an email: “I want to make these crimes public.”

But how can the journalists—and the public—be sure he’s trustworthy, and that the documents are real, complete, and unmanipulated? It’s not clear that John Doe is a single individual, for one, nor why he would have been confident that he could reveal the documents without revealing himself. He’d also have access to a pretty impressive documents cache, which suggests that an intelligence agency could have been involved.

Moreover, the revelation brings collateral damage upon legal business and innocent individuals—was that not a worry? In my view, no responsible person with a real concern for rule of law would advocate this sort of sweeping document release. There might be many unintended consequences; it could topple regimes, with unforeseen consequences. It’s pure and naïve anarchism, if the thinking was (as it seems from the outside) to create maximum chaos and hope it will all purge the system of its evils. In any event, the potential for using such a leak for political purposes is immense.

If “we” (in the United States or the West) released these documents, the motive would apparently be to embarrass Putin. This is part of the fantasy that we can defeat Putin in an information war. If that was the motive, the result is pathetic: No real damage is being done to Putin, but there is collateral damage to U.S. allies.

If the Russians did it, a good motive might be to deflect the West’s campaign against Putin’s corruption. But as I’ve explained, any actual reputational damage to Putin or Russia caused by the Panama Papers is in fact pretty trivial. For that cheap price, the Russians would have 1) exposed corrupt politicians everywhere, including in “model” Western democracies, and 2) fomented genuine destabilization in some Western countries. What I wonder, then: Is it a set-up? The Russians threw out the bait, and the United States gobbled it down. The Panama Paper stories run off Putin like water off a duck’s back. But they have a negative impact on Western stability.

So let’s say that the “who” is the Russians, and the “why” is to deflect attention and show that “everybody does it.” But how? Given Russia's vaunted hacking capabilities, a special cyber unit in the Kremlin may have been able to obtain the documents. (Monssack Fonseca is maintaining that the leak was not an inside job.) But it is most likely that such an operation would be run out of an agency called the Russian Financial Monitoring Service (RFM). RFM is Putin’s personal financial intelligence unit—he created it and it answers only to him. It is completely legitimate and is widely recognized as the most powerful such agency in the world, with a monopoly on information about money laundering, offshore centers, and related issues involving Russia or Russian nationals. An operation like the Panama Papers, which is only about financial intelligence, would have to be run out of RFM. Not the FSB, not some ad hoc gang in the Kremlin. While it might not (legally) have access to secrets kept by a firm like Mossack Fonseca, it’s privy to lots of international financial information through the international body of which it is a leading member, the Financial Action Task Force. In short, Russians are better equipped than anyone—more capable and less constrained—to hack into secret files.

As for how to leak the documents, it would actually be pretty ingenious to “incriminate” Russia in a seemingly serious (and headline-grabbing) way without actually revealing incriminating information. That’s exactly what we have. The Panama Papers revealed no Russian secrets. They added nothing to the rumors already circulating about Putin’s alleged private fortune. And the story-that-isn’t-a-story was advanced by none other than the ICIJ. So, done right, the last thing anyone would suspect is that the Panama Papers are a Russian operation.

A more serious Russian motive?

Granted, this would be a complicated operation just to defuse the West’s campaign to point to “Putin the kleptocrat.” But maybe there’s another motive.

As many have already pointed out, it’s curious that the Panama Papers mention no Americans. But it’s possible that they do and that the ICIJ hasn’t revealed that information. Perhaps, since the ICIJ is funded by Americans, they’re not going to bite the hand that feeds them. But suppose the ICIJ actually doesn’t have information on Americans—that calls into question the original data, which if actually real and uncensored would most probably include something on Americans. There are undoubtedly many American individuals and companies that have done business with the Mossack Fonseco crew, and it wouldn’t make sense for a collection of 11.5 million documents involving offshore finances to omit Americans entirely. Perhaps, then, someone purged those references before the documents were handed over to the German newspaper. The “someone” would, following my hypothesis, be the Russians—and the absence of incriminating information about Americans is an important hint of what I think to be the real purpose of this leak.

The Panama Papers contain secret corporate financial information, some of which—by far not all—reveals criminal activity. In the hands of law enforcement, such information can be used to prosecute companies and individuals; in the hands of a third party, it is a weapon for blackmail. For information to be effective as a blackmail weapon, it must be kept secret. Once revealed, as in the Panama Papers case, it is useless for blackmail. Its value is destroyed.
Therefore, I suggest that the purpose of the Panama Papers operation may be this: It is amessage directed at the Americans and other Western political leaders who could be mentioned but are not. The message is: “We have information on your financial misdeeds, too. You know we do. We can keep them secret if you work with us.” In other words, the individuals mentioned in the documents are not the targets. The ones who are notmentioned are the targets.

Kontrol, the special Russian variety of control

In sum, my thinking is that this could have been a Russian intelligence operation, which orchestrated a high-profile leak and established total credibility by “implicating” (not really implicating) Russia and keeping the source hidden. Some documents would be used for anti-corruption campaigns in a few countries—topple some minor regimes, destroy a few careers and fortunes. By then blackmailing the real targets in the United States and elsewhere (individuals not in the current leak), the Russian puppet masters get “kontrol” and influence.

If the Russians are behind the Panama Papers, we know two things and both come back to Putin personally: First, it is an operation run by RFM, which means it’s run by Putin; second, it’s ultimately about blackmail. That means the real story lies in the information being concealed, not revealed. You reveal secrets in order to destroy; conceal in order to control. Putin is not a destroyer. He’s a controller.

[FrankL]

Re: Major World News: Gigantic Panama Offshore data leak 2.6 TB largest in history

two problems with this post on Brookings:

1. the way it is linked to Russian Financial Monitoring Service is ridiculous; how does having legitimate information about the money streams help in hacking Monssack Fonseca more than anyone else with this information? Anyone that has information on how these type of off-shore trusts are set up has the knowledge; that's way too many people and countries to easily pin it down on just one.
2. why would Russia need to publish anything if they want to use it for control? They can just let the person in question 'know' discreetly without publishing any material. In fact, publishing of this material would greatly reduce the amount of people that can be blackmailed, and allows people who have things in place to dissolve them and set them up elsewhere.

I'd say #2 is much more of a counter-argument against Russia being behind it.

[shiny!]

Re: Major World News: Gigantic Panama Offshore data leak 2.6 TB largest in history

And another slant from Martin Armstrong, posted on April 5th. I don't know enough about the players and their motivations to agree or disagree with Armstrong's assertions, nor do I believe in his turn dates. I just thought it was interesting.

Blog/The Hunt for Taxes

ICIJ’s Political Agenda May Backfire

The International Consortium of Investigative Journalists (ICIJ) has clearly targeted Putin, however, it is his aids rather than him personally who were revealed in the Panama Papers. The political agenda of ICIJ is called into question by this action. Icelandic Prime Minister Sigmundur David Gunnlaugsson resigned just two days after the papers were released. Reports say that 12 current or former heads of state are mentioned in the Panama Papers. Whom are they protecting? It will be very interesting since targeting Putin makes this more of a political plot.

Nevertheless, this is coming precisely in line with the other side of 2015.75, which we warned would prove to be the peak in government. This is playing directly into our model’s predicted cycle of a collapse in confidence in government (i.e. politicians). This collapse in confidence is truly the driving force behind Trump. This massive leak may have far more political implications than merely targeting rich people who have a secret stash.

To what extent will this leak alter politics in an era of rising middle-class discontent and declining living standards as socialism collapses? This leak is more likely to fuel further anger among those who blame politicians and see the corruption boiling to the surface. The journalists are really closet socialists who hope that this will inspire the public to hand more control to government. To them, this will support their theory that the middle class is carrying a disproportionate share of the burden in supporting a system that they feel is unfair because the rich have more.

They do not look at government and the corruption. Instead, they just want to blame the rich for having more than they do in a traditional Marxist view of the world. They do not bother to ask why government always has to raise taxes and cannot manage the economy. Imagine if someone managed your funds and lost whatever you gave them each month, blamed the bankers, and then asked you to give them more money to manage again. How many times would you keep giving them more money when they never produce a profit? The hedge funds and Wall Street own Hillary, yet they will never expose such connections or truly investigate her past. This illustrates that they too have a political agenda.

This revelation may actually backfire and produce far more political damage than just hunting the rich, which has been the ICIJ’s agenda. The ICIJ may have just contributed to the collapse of socialism, but they will never understand the consequences of their actions.

[BillBoard]

Re: Major World News: Gigantic Panama Offshore data leak 2.6 TB largest in history

Yes, I did considered that too. However, cui bono?

Looking at this massive chess game, what's really the main objective? Really, what is the "final solution"? Take a flight of fancy and dare to speculate a bit.

[jk]

Re: Major World News: Gigantic Panama Offshore data leak 2.6 TB largest in history

Yes, I did considered that too. However, cui bono?

Looking at this massive chess game, what's really the main objective? Really, what is the "final solution"? Take a flight of fancy and dare to speculate a bit.

for oligarchs - people with a lot of power and money - isn't the current set-up "solution" enough? of course each always wants more, but as a class they've already got soooo much. as concentration increases, the game moves from extracting wealth from those with less- since they have a smaller and smaller hoard to pillage, and becomes more zero sum within the oligarch class.

wealth:

YouTube/politizane

[BillBoard]

Re: Major World News: Gigantic Panama Offshore data leak 2.6 TB largest in history

for oligarchs - people with a lot of power and money - isn't the current set-up "solution" enough? of course each always wants more, but as a class they've already got soooo much. as concentration increases, the game moves from extracting wealth from those with less- since they have a smaller and smaller hoard to pillage, and becomes more zero sum within the oligarch class.

Not really. It moves to eliminate those that don't have anymore to contribute. There, simple as that.

[jk]

Re: Major World News: Gigantic Panama Offshore data leak 2.6 TB largest in history

Not really. It moves to eliminate those that don't have anymore to contribute. There, simple as that.

life expectancy for the poor is stagnant or going down. so i guess that process is proceeding.

[Southernguy]

Re: Major World News: Gigantic Panama Offshore data leak 2.6 TB largest in history

More on the same line: the 0.01% are coming for us (the 10%ers. who do not need to borrow, supreme criminals!!!)
April 12, 2016 The War on Savings: the Panama Papers, Bail-Ins, and the Push to Go Cashless

by Ellen Brown

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The bombshell publication of the “Panama Papers,” leaked from a Panama law firm specializing in shell companies, has triggered both outrage and skepticism. In an April 3 article titled “Corporate Media Gatekeepers Protect Western 1% From Panama Leak,” UK blogger Craig Murray writes that the whistleblower no doubt had good intentions; but he made the mistake of leaking his 11.5 million documents to the corporate-controlled Western media, which released only those few documents incriminating opponents of Western financial interests. Murray writes:

Do not expect a genuine expose of western capitalism. The dirty secrets of western corporations will remain unpublished.
Expect hits at Russia, Iran and Syria and some tiny “balancing” western country like Iceland.

Iceland, of course, was the only country to refuse to bail out its banks, instead throwing its offending bankers in jail.
Pepe Escobar calls the released Panama Papers a “limited hangout.” The leak dovetails with the attempt of Transparency International to create a Global Public Beneficial Ownership Registry, which can collect ownership information from governments around the world; and with UK Prime Minister David Cameron’s global anti-corruption summit next month. According to The Economist, “The Panama papers give him just the platform he needs to persuade other governments, and his own, to turn their tough talk of recent years into action.”
The Daily Bell suspects a coordinated global effort linked to the push to go cashless. It’s all about knowing where the money is and who owns it, in order to tax it, regulate it, “sanction” it, or confiscate it:

Without privacy, authoritarianism flourishes because it is impossible to build and expand private networks that would act as a deterrent . . . . A worldwide transparency regime virtually guarantees abuses and corruption from those in power.

This is a reason why the “cashless society” idea is such a bad one. When no one is able to use cash, financial histories will be easily available via electronic bank records.
Michael Snyder of InvestmentWatchBlog.com also links the Panama Papers with the push to go cashless:

. . . [W]ith this Panama Paper leak and all its pre-conditioning against tax havens, people aren’t realizing yet that very soon, once Negative Interest Rates and Bail-Ins are being openly discussed and prepared for implementation, the whole tax haven or tax dodger discussion in the media will quickly switch from talking about corrupt billionaires and shell companies half way around the world, and instead will be talking about something much closer to home . . . .
In my strong opinion this whole thing is all part of the coming capital control war, which ties directly in with the coming transition to a biometric digital currency, the implementation of Negative Interest Rates, the rollout of large scale systemic bail-ins, and the demonization and eventual criminalization of physical assets that are outside of direct taxation control (which again would be done using the pre-conditioned guise of “tax havens”, with physical precious metals and physical cash being the main targets).

War on Corruption or War on Savers?
What we may be witnessing here is the 1% going after the 10% of people who, according to German researcher Margrit Kennedy, do not need to borrow but are “net savers.” Today the remaining 90% are “all borrowed up.” Either they are unwilling to borrow more or the banks are unwilling to lend to them, since they are poor credit risks. Who, then, is left to feed the debt machine that feeds the 1%, and more specifically the 0.001%? The power brokers at the top seem to want it all, and today that means going after those just below them on the financial food chain. The challenge is in squeezing money from people who don’t need to borrow. How to legally confiscate their savings?
Enter bail-ins, negative interest, all-digital currencies, and the elimination of “tax havens.”
Bail-ins allow the largest banks to gamble with impunity with their depositors’ money. If the banks make bad bets and become insolvent, they can legally confiscate the deposits to balance their books, through an “orderly resolution” scheme of the sort mandated in the Dodd-Frank Act.
Negative interest is a fee or private tax on holding funds in the bank.
Eliminating cash prevents the bank runs that these assaults on people’s savings would otherwise trigger. Money that exists only as digital entries cannot be withdrawn and stored under a mattress.
Exposing tax havens shows the predators where the money is and who has title to it, facilitating its confiscation and preventing the funding of massive rebellions against confiscation.
Orchestrated at Davos
That could help explain those coordinated developments we’ve been seeing across the central-bank-controlled world, proliferating particularly after the January summit of the World Economic Forum in Davos, Switzerland, where the global elite gather to discuss the hot economic issues of the day.
According to one Morgan Stanley attendee, a notable topic this year was the need for “a rapid introduction of a cashless society so that even more negative deposit interest rates could be introduced in Europe to offset likely secular stagnation.” With the use of physical cash curtailed, J.P. Morgan estimates the European Central Bank could ultimately bring interest rates as low as negative 4.5%.
“Secular stagnation,” the official justification for negative interest, means a chronic shortfall in demand: not enough money chasing goods and services. Today virtually all money is created by banks when they make loans; and when old loans are paid off, new ones must be taken out to maintain the money supply. Central banks have traditionally dropped interest rates to stimulate this continual borrowing, but interest rates have now effectively been pushed to zero. The argument is that they can be pushed below zero – but only if cash withdrawals, and hence bank runs, are not an option.
That is the argument; but as Paul Craig Roberts, former Assistant Secretary of the Treasury for Economic Policy, observes:

The notion is that the economy’s poor economic performance is not due to the failure of economic policy but to people hoarding their money. The Federal Reserve and its coterie of economists and presstitutes maintain the fiction of too much savings despite the publication of the Federal Reserve’s own report that 52% of Americans cannot raise $400 without selling personal possessions or borrowing the money.

In an article titled “Exposing the Hidden Agenda of Davos 2016”, Zerohedge reports on a flurry of activity during and after Davos related to the push to go cashless. But stimulating demand may just be the cover story for something darker behind this orchestrated effort.
Rescuing the Economy or the Banks?
Of greater concern at Davos than “secular stagnation” was the imminent insolvency of some major banks. Ambrose Evans-Pritchard, writing in January from Davos, quoted William White, former chief economist of the Bank for International Settlements, who warned:

The situation is worse than it was in 2007. Our macroeconomic ammunition to fight downturns is essentially all used up.
. . . European banks have already admitted to $1 trillion of non-performing loans: they are heavily exposed to emerging markets and are almost certainly rolling over further bad debts that have never been disclosed.
The European banking system may have to be recapitalized on a scale yet unimagined, and new “bail-in” rules mean that any deposit holder above the guarantee of €100,000 will have to help pay for it. [Emphasis added.]

It seems the War on Cash is being waged, not to stimulate the economy, but to save the lucrative private banking scheme at all costs. Quelling the riots likely to result from the mass confiscation of deposits could also underly the heightened push for a global “security state” and for those “anti-corruption” measures designed to determine where the money is and who owns it.
Postscript: Bail-ins under the new 2016 European Recovery and Resolution Directive began officially today, April 10, in Austria. Ominously, it was in Austria that a major bank bankruptcy triggered the Great Depression in 1931.

Join the debate on Facebook
Ellen Brown is an attorney, founder of the Public Banking Institute, and author of twelve books including the best-selling Web of Debt. Her latest book, The Public Bank Solution, explores successful public banking models historically and globally. Her 300+ blog articles are at EllenBrown.com.

More articles by:Ellen Brown

[jk]

Re: Major World News: Gigantic Panama Offshore data leak 2.6 TB largest in history

According to one Morgan Stanley attendee, a notable topic this year was the need for “a rapid introduction of a cashless society so that even more negative deposit interest rates could be introduced in Europe to offset likely secular stagnation.” With the use of physical cash curtailed, J.P. Morgan estimates the European Central Bank could ultimately bring interest rates as low as negative 4.5%.

who would be foolish enough to keep much money in banks under such conditions? you might keep a low balance to allow for transactions, but that's got to be it. if cash doesn't exist then strongly negative interest rates will give people irresistable motivation to turn their money into goods.

thus, i'd expect an enormous burst of inflation.

is this the new "ka-poom" scenario?

interestingly, this situation would also motivate people to pay off debt, even fixed rate debt - not usually the case in a "normal" inflation. this is because it would be a way to get rid of their savings before the negative rates eat into them, while reducing the risk of a liquidity squeeze when holding low transaction balances. paying off debt would be a way to shrink the size of necessary transaction balances.

[Southernguy]

Re: Major World News: Gigantic Panama Offshore data leak 2.6 TB largest in history

"if cash doesn't exist then strongly negative interest rates will give people irresistable motivation to turn their money into goods."
In case you don't want to spend you have to invest: stocks and real estate being obvious candidates. More inflation in these. Returns on investment for both shall go down even further. Read somewhere people saving for retirement in this low interest enviro tend to save more just to keep enough when they retire. Thus reducing comsumption.

[shiny!]

Re: Major World News: Gigantic Panama Offshore data leak 2.6 TB largest in history

who would be foolish enough to keep much money in banks under such conditions? you might keep a low balance to allow for transactions, but that's got to be it. if cash doesn't exist then strongly negative interest rates will give people irresistable motivation to turn their money into goods.

I hate to sound like a goldbug here, but under this scenario gold and silver might become the currencies of choice in a black market economy.

[jk]

Re: Major World News: Gigantic Panama Offshore data leak 2.6 TB largest in history

"if cash doesn't exist then strongly negative interest rates will give people irresistable motivation to turn their money into goods."
In case you don't want to spend you have to invest: stocks and real estate being obvious candidates. More inflation in these. Returns on investment for both shall go down even further. Read somewhere people saving for retirement in this low interest enviro tend to save more just to keep enough when they retire. Thus reducing comsumption.

people do tend to save more, apparently, in this low return environment. otoh, i question whether that would be the case if they knew their return was MINUS 4.5%.

and yes, besides consumption goods people would bid up stock and real estate. of course then they'd end up paying taxes on their phantom profits.

[DSpencer]

Re: Major World News: Gigantic Panama Offshore data leak 2.6 TB largest in history

who would be foolish enough to keep much money in banks under such conditions? you might keep a low balance to allow for transactions, but that's got to be it. if cash doesn't exist then strongly negative interest rates will give people irresistable motivation to turn their money into goods.

thus, i'd expect an enormous burst of inflation.

is this the new "ka-poom" scenario?

interestingly, this situation would also motivate people to pay off debt, even fixed rate debt - not usually the case in a "normal" inflation. this is because it would be a way to get rid of their savings before the negative rates eat into them, while reducing the risk of a liquidity squeeze when holding low transaction balances. paying off debt would be a way to shrink the size of necessary transaction balances.

In reference to the cashless society and negative interest rates: It's so disturbing that people actually think this way. These people are absolute egomaniac control freaks to think they can manage the world this way. In addition to being stupid and destined to end in economic calamity, this plan is just pure evil. Consider what they are actually saying:We want to force everyone to keep their money in the bank and then slowly steal it from them.

[thriftyandboringinohio]

Re: Major World News: Gigantic Panama Offshore data leak 2.6 TB largest in history

...they...want to force everyone to keep their money in the bank and then slowly steal it from them.

Bingo