Panama Papers refer to a massive leak from a Panamanian law firm that shows significant financial wrong doings by the world’s richest, powerful, and famous. Panama Papers show that many politically well connected people have been dodging taxes by hiding their wealth through Panamanian corporations. In many cases, the wealth of the rich and famous appear to be the result of corruption.
Various governments are reacting differently to the Panama Papers. Australia is starting an investigation. Prime Minister of Iceland is under pressure to resign. China denounces Panama Papers and limits the coverage of the issue by the media in China.
In our analysis, the negative effect of such a revelation is usually short lived. After all from the beginning of time, there have been both honest and corrupt people in the world.  However the stock market is overbought and is not fully supported by fundamentals. For this reason, we are increasing the hedge and cash levels.
