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Actionable news in ODP: Office Depot, Inc.,

Unsavory Business Model

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DOW – 217 = 17,711
SPX- 19 = 2064
NAS – 49 = 4760
10 Y – .02 = 1.74%
OIL + 1.57 = 46.23
GOLD + 11.40 = 1277.70

The Dow Jones industrial average had its worst day since Feb. 11. The S&P 500 closed 0.96 percent lower for its worst day since April 7. Consumer discretionary led nine sectors lower. Oil turned higher and extended gains to close at a high for the year after the EIA’s weekly inventory report showed a decline of 3.4 million barrels, versus expectations of a slight build. Yesterday, the American Petroleum Institute reported a 3.4 million-barrel increase in crude inventories for the week; so, really, take your pick.

A federal judge has blocked Staples (SPLS) acquisition of Office Depot (ODP) after a judge agreed to the Federal Trade Commission’s request for a preliminary injunction on antitrust grounds. The FTC said the proposed merger would likely eliminate competition. The same result occurred when Office Depot and Staples sought to combine in 1997. Staples will now pay a $250 million break-up fee to its smaller rival for terminating the transaction.

The U.S. government posted a $106 billion budget surplus in April, down 32 percent from the same period last year.

The International Monetary Fund has published a new research paper that says public sector corruption siphons $1.5 trillion to $2 trillion annually from the global economy in bribes and costs far more in stunted economic growth, lost tax revenues and sustained poverty. Extrapolating from 2005 World Bank research, the paper estimated that around 2 percent of global gross domestic product is now paid in bribes annually. But it said corruption’s indirect costs are substantially higher, reducing government revenues by encouraging tax evasion and reducing incentives to pay taxes, leaving less money available for public investments in infrastructure, health care and education.

On Monday, the International Consortium of Investigative Journalists posted online its database of documents related to more than 200,000 offshore accounts created through Panamanian law firm Mossack Fonseca. You can read and search through the database at your leisure at On Monday, 300 economists signed a letter urging world leaders to end tax havens, saying they only benefited rich individuals and multinational corporations, while boosting inequality. Which is probably true, yet not quite complete. What we are also learning from the Panama Papers is that offshore accounts are a business model for the financial system. It is a core business for global financial institutions.

Tax evasion by wealthy individuals is only a small part of the story. Legal tax avoidance is almost certainly more important. Most of that involves companies; some companies designed to hide the activities of individuals or families, and also large global corporations.

And while it might be impossible at this time to measure the exact amount of...