iOS app Android app More

Mark Gongloff   |   July 22, 2014   11:56 AM ET

Have you recently eaten a Chipotle burrito in front of the TV while binge-watching one of your shows on Netflix? Maybe? Probably? If so, then you, my sloppy TV friend, just might have the secret answer to the mystery of the future of America's economy.

Here is what I mean: Both Chipotle and Netflix announced their quarterly profits on Monday. Both reported that they had annihilated all of the competition, with quarterly profit gains of eleventy gazillion percent or some such ridiculous figure.

And here is the twist that opens the key to the cupboard with the secret knowledge of the future: Both of these companies managed to add customers despite having recently jacked up prices. Chipotle and Netflix both asked us to pay more for burritos/videos, and, instead of fleeing, we gladly gave them extra money for more of their sweet, sweet burritos/videos.

If we get a few more companies reporting this sort of behavior, then it could be a sign that companies have developed what is known in fancy economics textbooks as "pricing power." And pricing power can lead to inflation.

You've probably always thought of inflation as a bad thing, but in some cases inflation can be a good thing. Let's say, oh I don't know, your economy has been a Lovecraftian nightmare hell for workers for the past five years, with nobody ever getting raises, aside from evil, hairless-cat-stroking CEOs. Does that sound like an economy you might know personally?

If companies can raise prices and get away with it, then maybe they'll feel better about raising wages. And/or if wages start rising, then that gives people more money, which they can then spend on stuff, which could also cause prices to go higher.

So how high are we on the wage-price-spiral staircase to higher inflation and/or wages? Not very high. Here is a chart of the Fed's favorite inflation measure:

Do you see the runaway inflation? Me neither, unless you look at the chart backwards.

And here is a chart of wages (h/t The Week's John Aziz):

Going the wrong way!

It could just be that, instead of a sign that wages and prices are on a fast train to Inflation Town USA, Chipotle and Netflix being able to raise prices is just a sign that we really, really, really love us some Chipotle and Netflix. McDonald's, in comparison, also raised prices and had a terrible quarter.

Mark Gongloff   |   July 10, 2014    8:36 AM ET

Bubbles are filled with air, so it is only fitting that in our new tech bubble we buy companies that are mostly made of air.

One of the hottest stocks in the universe right now is a social-networking company called Cynk Technology, ticker symbol CYNK. As of Thursday morning, the stock had soared more than 30,000 percent in less than one month, shooting from 6 cents on June 16 to $18.21 Thursday morning, taking Cynk's market value from about $17 million to more than $5 billion. That makes it worth more than HuffPost parent company AOL or JetBlue, both valued at about $3 billion.

Here's how the stock looked as of Wednesday afternoon, when it was up a mere 24,000 percent:

cynk stock

Minor technical note: It is not entirely clear that Cynk actually, how do you say, exists.

Some parts of it do exist on the Internet, at least: Cynk Technology, formerly known as Introbuzz, is a social-networking company that runs a bare-bones website called IntroBiz. IntroBiz is apparently "a marketplace [where] you may both buy and sell the ability to socially connect to individuals such as celebrities, business owners, and talented IT professionals." It has pictures of Leonardo DiCaprio, Angelina Jolie and other celebs, suggesting that your dream of becoming besties with Leo and/or Brangelina will finally come true, thanks to IntroBiz.

So far, so legit. Now's when things get weird!

Cynk is headquartered in Belize, but was incorporated in Nevada in 2008. Its main contact number is in a Miami area code.

As Business Insider points out, the company warned the Securities and Exchange Commission in March that it wouldn't be able to file its annual report on time this year.

Signing that document was one Marlon Luis Sanchez, who happens to be the company's President, Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, Secretary and Treasurer.

A 1-800 number listed for Sanchez in the SEC filing is "unassigned," according to a phone-company recording. The company's Miami number reached a voicemail message for Cynk Technology. The company didn't immediately return a request for comment.

According to Cynk's most recent quarterly financials, the company has no revenue. What it does have is $39 in assets and nearly $52,000 in liabilities. It loses money every year.

So who the devil is buying up all of this company's stock? Hard to tell. It could be an instrument for one heck of a pump-and-dump scheme. Or it could just be that we live in a world where a Kickstarter for potato salad raises $44,000 (and counting) and car-service Uber is worth $17 billion. Who are we to judge who buys what in such a world?

Business Insider, Zero Hedge, TheStreet's Herb Greenberg and many others gave Cynk stock the stink-eye Wednesday, but that didn't seem to slow it down at all: At the time of publishing this story, about two hours after the market open Thursday morning, the stock was up 24 percent on the day.

Praise the Lord and pass the potato salad. On late Thursday morning Cynk was still going:

cynk intraday

Update: The Wall Street Journal managed to track down some of the people involved in the company, but its reporting does not make this situation any less shady. Apparently Sanchez no longer works for the company, which is now on its fourth CEO since 2008. The current CEO, named Javier Romero, seems unreachable, listed at an address in Belize that may not exist, according to the WSJ. Sanchez sold 210 million shares in the company, now worth nearly $3 billion, to this lucky new CEO back in February, according to the WSJ.

And now, inevitably, this may be happening:

The stock ended its busy trading day Thursday down 5.5 percent at $13.90 -- leaving it with a market value of $4 billion.

Update 2: Sure enough, the SEC halted trading in Cynk stock on Friday morning, Business Insider reported. The SEC cited "concerns regarding the accuracy and adequacy of information in the marketplace and potentially manipulative transactions in CYNK's common stock."

So if you've dumped your life savings into Cynk, this might be a good time to reconsider your life choices.

Mark Gongloff   |   June 25, 2014   10:04 AM ET

Obamacare is going to have to return its hero's cape, and we're all going to have to learn to think twice before we over-react to shaky economic data.

Two months ago, President Barack Obama's signature health-care reform law was widely credited with saving the U.S. economy from shrinking in the first quarter by giving a huge jolt to health-care spending. On Wednesday, we found out that had all been a mirage.

Using more-solid data than it had two months ago, the U.S. Bureau of Economic Analysis found that health spending actually shrank in the first quarter, weakening overall consumer spending and contributing to a terrible quarter for the broader economy. Gross domestic product shrank at a 2.9 percent annualized rate in the quarter, the worst since the depths of the Great Recession, with health spending alone shaving 0.16 percentage points from growth.

What a difference from two months ago, when the BEA first guesstimated that health spending soared at a 9.9 percent rate in the quarter, helping to keep the economy out of the dumpster. Many news outlets, including yours truly, ran headlines like this:

oops

Other outlets, with differing ideologies, zeroed in on the alleged spending surge as a bad thing, pointing out that one of the goals of Obamacare was to reduce such spending.

We were all wrong. It turns out that health-care spending actually fell, as apparently millions of new Obamacare and Medicaid enrollees boosted their total health-care spending much, much less than the BEA had guessed they would.

We should have listened to our own health-care reporter Jeffrey Young, who wrote when the first data came out:

Because everything with the words "health care" in it have been intensely politicized since 2009 when Congress started writing what eventually became the Affordable Care Act, every number that comes out has a tendency to be overanalyzed, and people on the left and the right have a tendency to draw grand conclusions from what can be pretty meager, preliminary information.

Young also pointed out that the long-term trajectory of health-care spending should be higher, anyway, given an improving economy, an aging population and other factors. On Wednesday, the White House suggested that health spending should pick up, but health prices should stay low, both of which the White House naturally attributed to Obamacare.

And we might not really have seen the full impact of Obamacare sign-ups on the economy yet, particularly as large numbers of them happened at the tail end of the first quarter, for insurance that actually couldn't be used until April -- the second quarter -- at the earliest.

Anyway, this episode highlights the risk we run every month of giving too much weight to any one economic number -- especially big, politically charged numbers like the unemployment rate and health-care spending. These numbers are often just best guesses that are revised completely beyond recognition in short order, and yet they can cause wild mood swings in consumers, politicians and financial markets. Better to be patient and stay focused on the big picture.

Mark Gongloff   |   June 24, 2014    3:25 PM ET

Accused of paying its workers too little, Walmart has responded in the most 2014 way possible: by being snarky on the Internet with a "fact check." Unfortunately, it is longer on snark than on facts.

Walmart rep David Tovar recently took a digital red pen and marked up a New York Times opinion column by Timothy Egan that suggested Walmart could help fix America's income inequality problem simply by raising wages for its low-paid workers. It was a fun idea with a lot of viral potential, and way cheaper than actually paying a living wage.

thanks for sharing

So. Hilarious. At least to right-wingers: The Wall Street Journal's in-house rape apologist James Taranto called it "devastating." NewsBusters called it not just "devastating" but also "spirited." Tucker Carlson's Daily Caller called it "EPIC."

In the face of such success, it seems almost unsporting to fact-check Walmart's fact-check -- almost, but not quite. (Tovar's full fact-check can be seen at the end of this story.)

can we see your math

Egan accused Walmart of draining U.S. tax coffers because its workers make so little that they have to go on food stamps and other public assistance to make ends meet. "We are the largest tax payer in America," Tovar countered. "Can we see your math?"

Actually, we would like to see Walmart's math, because Exxon Mobil, Chevron, Apple and Wells Fargo paid more in taxes than Walmart, according to a January study by 24/7 Wall Street. That study used 2012 data in some cases, but fresher numbers haven't changed the picture much, according to HuffPost's review of company financial reports. It could be that Tovar meant that Walmart has the biggest U.S. tax bill, but that would also not be correct -- Apple paid more in U.S. taxes than Walmart in the latest fiscal year. Wells Fargo, too, if you count deferred taxes, as the bank does, taking a hit to earnings.

Walmart spokesman Kory Lundberg said in a phone interview that the company was looking into the discrepancy.

Walmart does pay a lot in taxes, for sure -- more than $6 billion in U.S. federal taxes alone in its latest fiscal year. But by not paying its workers a living wage, which does force some unknown number of them onto public assistance, its policies also arguably eat into a lot of tax revenue. A recent study by Americans For Tax Fairness estimated that Walmart workers cost the U.S. government $6.2 billion a year. The group also estimated that Walmart and its founding Walton family cost the government another $1.6 billion in tax revenue through various tax loopholes.

we see more associates

Walmart has repeatedly disputed the ATF's $6.2 billion number, and Tovar did so again in his fact-check. Trouble is, Walmart never offers any numbers of its own. Tovar claimed, "We see more associates move off of public assistance as a result of their job at Walmart." But that is not a particularly informative statement. "More" than what? Do more associates move off of public assistance than move on to it? How many move in each direction annually? Tovar's link takes you to one person's story in a YouTube video -- which, thanks, but without hard numbers, this is not so much a fact-check as it is an unsubstantiated assertion.

Walmart's Lundberg said the company has studied the number of its workers who are on public assistance, but declined to share its data.

"There are people that come to Walmart on public assistance, and through their job at Walmart, we see that most are able to move off of it within a couple of years," he said.

politifact

Regarding a 2013 study by House Democrats that estimated that one store in Wisconsin costs taxpayers nearly $1 million per year in assistance, Tovar claimed the fact-checking website Politifact has declared it "mostly false." But Tovar's claim is mostly misleading -- Politifact was addressing an Ed Schultz segment on MSNBC that cited the study, not the study itself.

Tovar also claimed that the company pays hourly employees $12.91 an hour, and that this figure does not include the pay of any store managers. But Walmart's pay figure has not changed much from what it was in previous years, when it did include some store managers who are paid hourly.

In a phone interview, spokesman Lundberg conceded that the latest figure does include some department managers who are paid hourly. Tovar's fact-check is not factual.

gandel furman

Egan's column cited a November 2013 story by Fortune reporter Stephen Gandel, which argued that Walmart could "give workers a 50 percent raise without hurting shareholder value." In his "fact check," Tovar questioned the credibility of Gandel, an established journalist, without offering any reason to do so. He suggested that we should instead listen to Jason Furman, chairman of President Barack Obama's Council Of Economic Advisors, as if Furman had recently written something that countered Gandel's argument.

Tovar did offer a link to an unrelated piece by Furman from 2006 about how Walmart helps the poor by letting them buy cheap stuff. Furman's piece was flawed -- Walmart could probably also help the poor by giving them better wages -- but, more importantly, it has no relation to Gandel's argument.

In the past, Walmart has also pointed to a 2005 paper by Furman that calls Walmart a "progressive success story." But in that paper, Furman also wrote that Walmart "does not pay enough for a family to live the dignified life Americans have come to expect and demand" and that the company had tried to shred the social safety net on which many of its low-paid workers rely.

Tovar did not dispute a recent Lake Research Partners survey that found Walmart has a 28 percent disapproval rating among Americans. Instead, he used math to point out that this result means that Walmart has a 72-percent approval rating. He did not mention that rivals Target, Costco and Amazon have far, far higher approval ratings than Walmart.

starbucks

Tovar also rather desperately tried to co-opt some of the corporate goodwill that has been accumulated by Starbucks over the years, by marking up an Egan sentence about Starbucks' OK pay and benefits to make it look as if Walmart offers OK pay and benefits, too.

Tovar wrapped up his rebuttal by suggesting that Egan write a different story. This story would be one about how Walmart is helping bring back the American Dream by buying more U.S.-made goods -- which is pretty ballsy, after Walmart has spent decades helping to wreck America's manufacturing base by selling us cheaply made foreign goods. This alternative story would also explain how Walmart is "expanding training, education and workforce development programs," all stuff that Walmart says is more important than just paying a boring old living wage.

This is the standard corporate objection to raising wages: We're not going to pay people more now, we're going to train them so they can earn more in the distant future. But you can't eat education, or pay your mortgage with a workforce development program. Why can't low-wage workers have some of both?

I'm going to have to declare Walmart's fact check "Mostly Bullshit."

Here's Tovar's response in its entirety:

walmart fact check

Mark Gongloff   |   June 23, 2014   11:23 AM ET

Sting may not plan on leaving very much of his wealth to his offspring, but don't mistake him for some kind of equalizing role model out of Thomas Piketty's dreams.

Gordon Sumner, a/k/a Sting, the 62-year-old former frontman for The Police and alleged marathon sex-haver (not really), told the UK's Daily Mail that his children are not going to see very much of his fortune, which amounts to a little more than $300 million.

"I certainly don’t want to leave them trust funds that are albatrosses round their necks," he reportedly said of his six kids, all of whom are now adults. "They have to work. All my kids know that and they rarely ask me for anything, which I really respect and appreciate."

This is an admirable position for jillionaire rock royalty to take. If all millionaires and billionaires were more like Sting, then maybe we wouldn't have to worry about the dystopian hellscape of yawning inequality foretold by French economist Piketty in his book Capital In The Twenty-First Century. In Piketty's telling, wealth inequality will widen forever because the rich always get richer at a faster rate than the economy grows, and then they keep leaving their ever-expanding wealth to their ne'er-do-well young.

But Sting's screw-em approach to estate planning is not quite the noble child sacrifice it might seem.

For one thing, Sting's children are forever going to have the very substantial benefit of being Sting's children. They have been raised by millionaires in nurturing environments and attended the very best, most expensive schools. And the connections they have are priceless. For the rest of their lives, if they ever get into trouble, Sting's kids can just ring up, say, Paul McCartney or some other jillionaire rock royalty, or maybe just plain old royalty, and say, "Hi, Sting's kid here. Can you spare a few pounds and/or a job?"

And Sting has not promised to give all of this money to charity, as billionaires Warren Buffett and Bill Gates have done. Instead, Sting claims that he just plans to spend most of his loot. (Though he does do a lot of charity work.)

Which is fine, it's Sting's money, he can do what he wants with it. And this is certainly wealth redistribution of a different sort. Because boy, can Sting spend the hell out of some money. For example, he apparently has "more than 100 people on his payroll," according to the Daily Mail.

‘I keep a community of people going," he reportedly said. "My crew, my band, my staff... it’s a corporation!’"

I guess the rich really are job creators, just like they're always telling us. Still, this 100-person payroll raises nearly 100 questions:

What is Sting doing that requires the assistance of 100 people? Are they helping him sign autographs? Curate his Twitter feed? Do these 100 people do search-engine optimization for Sting.com? Do they make the olive oil, wine and honey for his Palagio brand of foodstuffs? Are they running the Tuscan estate where said foodstuffs are made? Is that Tuscan estate hiring? Would the ability to type left-wing diatribes at 100 words per minute be suitable experience? Do they act out songs from the Broadway musical he wrote? Does Sting sign the paychecks? Are those checks worth more than their face value because they have been signed by Sting? What are the benefits? What music plays in the break room? Good Police stuff or Sting's sketchier solo work?

Anyway, good on Sting for hiring all of these people and making his kids get jobs, but I'm not sure having everybody emulate Sting would be the best fix for wealth inequality.

Mark Gongloff   |   June 18, 2014   10:46 AM ET

If you are somebody who counts gun makers among the victims of the Sandy Hook Elementary School massacre, then I have an investment opportunity for you.

It's called Freedom Capital Investment Management, a new money manager that claims to be "the first investment manager dedicated to Patriotic Responsible Investing." That means buying stocks of gun makers -- which some investors dumped after the deadly school shooting in Newtown, Connecticut -- along with companies that promote "Energy independence, cyber security, American military security, Second Amendment rights, and agricultural independence," according to the firm's website.

"The Newtown event was extremely tragic; however, demonizing legal businesses -- particularly those that provide munitions to our military, thereby protecting America and its freedoms -- is unacceptable," the firm writes.

Freedom Capital isn't yet ready to accept investors, according to its founder, investment banker Jeffrey McClure. But if all goes well, it could be in business by the end of the year, and McClure told The Huffington Post he expects strong demand.

"There's a massive amount of capital allocated to various impact investing, socially responsible investing, agenda-based investing, letting all kinds of folks invest capital along whatever guidelines," McClure said by phone. "And we see a tremendous opportunity for a large portion of the capital markets to have an opportunity they haven't had."

In case you have any doubt about where Freedom Capital stands, its bare-bones website features pictures of bald eagles, American flags, men with guns, men on horseback, fighter jets and more men with guns -- just to give you some idea of how much freedom we're talking about, exactly. Let's just say it's a lot of freedom.

freedom flags

Actual picture from Freedom Capital's website.

This sort of imagery might lead one to think that Freedom Capital is a joke of the sort Stephen Colbert or corporate pranksters The Yes Men might dream up, but it's legit. It has an SEC filing, a Crowdfunder page and everything.

McClure's prior experience includes founding an investment bank called The Bear Companies and a specialty-finance firm called Kodiak Funding, both of which built collateralized debt obligations (though not of the toxic mortgage variety) prior to the financial crisis.

Freedom Capital said it's mad about how the media have forced investors into "socially responsible investing," which avoids investing in companies that destroy people's health and the planet. The number of funds with "an agenda-driven investment thesis" has grown nearly nine-fold since 1995, with assets of $3.7 trillion, according to Freedom Capital.

"All of these funds have a liberal bias," Freedom Capital writes. "Not one of these funds has a patriotic strategy."

Freedom Capital has had enough of this sort of thing and wants to do something about it, with "robust marketing campaigns to identify and educate investors about the stronghold that the liberal left has on the management of US household wealth" and "a proactive patriotic investment alternative."

freedom ride

Another picture from the Freedom Capital website.

"Want to invest in Green Technology and renewable energy? There's a fund for that," Freedom Capital's website freedomsplains. "Want to invest in guns or weapons manufacturers? No funds available for that, sorry."

Actually, if your goal is to invest only in guns and weapons, then, no, there is probably no such fund right now. But you can buy plenty of stock in guns and weapons makers just by buying one of thousands of mutual funds available through your company's 401(k) plan. And you are always free to simply buy individual stocks in these companies.

And perhaps it's with good reason that people have pumped $3.7 trillion into socially responsible investment funds, and that until now no one has thought to create a fund like Freedom's. Because what's the opposite of socially responsible investing?

"We know some people operate with a different moral compass," McClure said, "but there's opportunities for those people to invest the way they want to invest, and that's what makes America America."

Incidentally, the gun maker that made one of the guns used in the Sandy Hook massacre is called Freedom Group. It has no relationship with Freedom Capital, aside from a dedication to, you know, freedom. Its private-equity owner, Cerberus Capital Management, announced plans to sell Freedom after the massacre, but hasn't managed to let go of its grip yet, despite getting a $1 billion offer, according to Crain's New York Business.

If Freedom Capital had been around at the time of the Newtown massacre, it might have profited, like Cerberus, from the huge boom in gun sales that followed. Gun enthusiasts have snapped up guns and ammo in anticipation of draconian gun-control laws, though Congress still has not enacted any in the 18 months since the massacre, during which time there have been 74 more school shootings, about 15 of which were Newtown-style killing sprees.

Mark Gongloff   |   June 13, 2014    9:53 AM ET

For the past several years, China has been building stuff at a mind-blowing pace. Just how mind-blowing? Here, let's let Bill Gates put it in perspective:

Think about this for a second. Between 1901 and 2000, the U.S. built an entire interstate highway system, the Golden Gate Bridge, the Hoover Dam and just about all of its skyscrapers -- to name just a few concrete-intensive things. China did all that, and almost half again, in just three years.

On his blog, Gates suggested that all of this concrete had helped pull Chinese out of poverty. But all of this building has also left China with a huge and dangerous property bubble, massive ghost cities and empty housing.

Mark Gongloff   |   June 12, 2014    1:23 PM ET

Are you a wealthy Londoner with an appetite for risky investments and also delicious burritos? Then have we got a deal for you.

Chilango, a small Mexican-food chain operating in some of London's snobbiest neighborhoods, is raising cash by selling bonds that pay 8 percent interest per year for four years. That's a pretty high interest rate these days, more than the 5 percent junk bonds are paying.

As an added incentive, anybody who invests at least 10,000 British pounds, or nearly $17,000, gets a free burrito per week for each of those four years.

Here is some math: Chicken burritos at Chilango cost 5.99 British pounds, while pork burritos cost 6.99. If you enjoy consuming roasted dead pig, as I and The Wall Street Journal do, then investing in this bond will save you more than $600 per year in burritos.

chilango burrito

So far only 89 people have invested in the bonds, which are for sale at the crowdsourcing site Crowdcube. But after just a couple of days, the company is more than a third of the way to raising its target of 1 million pounds.

Before you clean out your 401(k) to jump on this opportunity, consider that probably only rich people could or should buy $17,000 in Chilango bonds. There is a good risk that you might not get your money back, or that you might show up hungry at a Chilango one day, burrito-paying bond in hand, and find the doors closed forever. The restaurant business is notoriously difficult. Perhaps, as Quartz notes, there is an unflattering reason Chilango is banging a tin cup on Crowdcube instead of getting a proper bank loan.

Still, Chilango's slick promotional video shows people lining (or "queueing," as they say over there) up around the block for burritos, so who knows? Early investors include former executives of the U.K. branches of Krispy Kreme and Domino's, who might be expected to know what they're doing.

And raising money this way is a clever PR stunt, at the very least. It follows in the footsteps of Naked Wines and other companies that have offered free stuff along with their bonds, Quartz notes. The company says it is using crowdfunding to better reach the masses. Investors should hope its ability to sell burritos is on par with its ability to sell itself.

Mark Gongloff   |   June 11, 2014   12:27 PM ET

Eric Cantor's political career is dead and Wall Street is sad.

The primary defeat Tuesday night of House Majority Leader Cantor (R-Va.) at the hands of Tea Party rival David Brat means Wall Street is losing one of its best buddies, a champion water-carrier for finance. And Wall Street wasted no time moaning about it.

"I thought it was stunning," Goldman Sachs CEO Lloyd Blankfein told CNBC on Wednesday, referring to Cantor's loss. "Eric Cantor in my view was a sensible politician who dedicated himself to public service."

"Many lobbyists on K Street whose clients include major financial institutions consider Cantor a go to member in leadership on policy debates," wrote Politico's MJ Lee and Zachary Warmbrodt.

An anonymous Wall Streeter told Politico that Cantor was “one of the few remaining House Republicans who understood the complicated and nuanced issues facing the financial services community," which is PR-speak for champion water-carrying.

And he was well-paid for that water-carrying, raking in more than $1 million in 2013-2014 from the finance, insurance and real estate industries, according to OpenSecrets.org. Goldman Sachs alone accounted for $26,600 of that. OpenSecrets doesn't have similar data for Dave Brat, who barely raised any money anyway. Cantor reportedly spent more money on fancy steaks than Brat spent campaigning.

As evidence of the depth of Cantor's loyalty, he was deeply concerned about the "mobs" of Occupy Wall Street. He was "incensed" by a proposal earlier this year by Rep. Dave Camp (R-Mich.) that the biggest banks should be taxed on their assets, to help curb their "too big to fail" advantages. Who could possibly get "incensed" by such a thing, except for bankers or their mouthpieces?

Scary bank-taxer Camp is leaving Congress at the end of his current term. But he could have a kindred spirit in Brat, who campaigned hard against Cantor's fealty to Wall Street.

"All the investment banks up in New York and D.C. or whatever, those guys should've gone to jail," Brat told fellow Tea Partiers in one campaign speech. "Instead of going to jail, where did they go? They went onto Eric's Rolodex. That's where they all are, and they're sending him big checks." (h/t Matt Stoller)

This line got a HUGE laugh from Brat's Tea Party audience and probably helped him win the primary.

Does he mean it? If elected, will Brat get busy putting bankers in jail? We'll see. Even after his victory on Tuesday, though, he said, “the Republican Party has been paying too much attention to Wall Street and not enough to Main Street."

In any event, these are not the messages bankers like to hear.

The wailing and gnashing of teeth over Cantor's departure could be heard even in the stock market, where the Dow Jones Industrial Average fell nearly 1 percent Wednesday morning, partly because of the practical implications of Brat's victory: If it moves Republicans even more to the right, then it's likely we'll get more existential crises over stuff like the debt ceiling.

But there is also an emotional explanation, as Joshua Brown, "The Reformed Broker," tweeted:

Mark Gongloff   |   June 11, 2014    7:39 AM ET

The recovery might soon start to feel like a real recovery: There are hints that wages could finally start growing again after a long rut.

Stagnant wages have left most Americans feeling like the five years since the Great Recession officially ended weren't much of a recovery at all. This chart of wage growth pretty much tells the whole story:

No matter how many million jobs have been created in the past five years, no matter how many new records the Dow Jones Industrial Average has set, no matter how many billions of dollars Uber is worth, your stagnant wages speak the loudest, and they tell you this hasn't been much of a recovery.

There are some signs that this story might be about to change. Conor Sen, a portfolio manager at New River Investments and a prolific tweeter and blogger, tweeted this chart on Tuesday. It shows how wages and job openings typically track each other over time, and how there's a big gap between the two right now:

Job openings have been on the rise, so wages should be, too, according to Sen and Business Insider's Joe Weisenthal. The idea is that when companies have jobs to fill, they'll pay up to fill them.

For all our sakes, let's hope so. Even Wall Street might be starting to grumble about how lousy pay is hurting the economy.

Meanwhile, small businesses report they are increasingly hard-up for employees and plan on raising wages soon, according to another couple of charts Weisenthal published, from the National Federation of Independent Business:

In the first chart, the thick line shows how much small businesses have raised pay in the past three months. The thin line shows how much they plan to raise pay in the next three months. Both lines have almost climbed back to pre-recession levels, which is good news.

small biz comp

The second chart shows how "labor quality" is a rising problem for small businesses. Good help is hard to find, in other words -- meaning they might be willing to pay more for it.

small biz probs

Businesses have stepped up their hiring a bit in recent months, a hopeful sign. But the overall pace of hiring is still far below where it was before the recession, the Economic Policy Institute, a think tank focused on labor issues, noted on Tuesday.

There were 4.5 million job openings in March, but 9.8 million people trying to fill them, the EPI pointed out. In other words, there were more than two workers for every job opening. In a normal economy, those numbers would be closer to even. It's hard to imagine wages surging while there's still this much slack in the job market. But maybe we're at least seeing the early hints of such a surge.

Mark Gongloff   |   June 6, 2014    2:48 PM ET

Now do you believe we're in a new tech bubble?

Uber, a controversial car-hiring app, just raised $1.2 billion in fresh investor cash, giving it a total value of either $17 billion, according to the company, or $18.2 billion, according to The Wall Street Journal. Really, though, what difference does a billion here or a billion there make any more, when money no longer has meaning?

Uber, the value of which has quadrupled in less than a year, is now the most expensive member of the WSJ's "Billion Dollar Startup Club," made up of companies being financed by venture capital that are worth more than $1 billion. There are now more than 30 such companies, most of them in tech, including Airbnb ($10 billion), Dropbox ($10 billion) and Pinterest ($5 billion).

Would you like some dubious comparisons to help you put these outlandish numbers in perspective? Of course you would.

Uber is the second most-valuable startup in history, after Facebook, according to the WSJ.

Uber is now worth more than half of the companies in the Standard & Poor's 500-stock index, including dozens of banks, oil companies and technology companies. It is worth more than Chipotle or Whole Foods. It is worth more than ancient-economy companies like Alcoa and Clorox.

Uber is now worth more than all the personal real estate in the crowded Washington, D.C., suburb of Falls Church, Virginia, according to the real-estate research firm Redfin.

Uber is now worth more than two times the net worth of billionaire/real-life-Iron-Man Elon Musk (as measured by Forbes).

Uber is worth more than George Lucas, Steven Spielberg, Donald Trump and H. Ross Perot combined.

Anyway, you get the idea: It's worth a lot of money. Whatever money is.

We have warned you repeatedly of a tech bubble in the past couple of years, and we continue to be correct.

The good news is that this tech bubble is probably not anything you should worry about just yet, unless you live in the parts of California that these absurd mountains of cash have rendered uninhabitable. You, normal investor, are probably not really at risk of getting too badly burned when all this goes kablooey the way you were in the dot-com bubble. The tech-heavy Nasdaq index is still far away from the record it set back then.

Then again, it's early yet.

Mark Gongloff   |   June 6, 2014   11:43 AM ET

We have finally recovered all the jobs lost in the Great Recession. That's good, but not nearly good enough. In fact, we might still be missing 7 million jobs.

The U.S. economy added 217,000 jobs in May, the Bureau of Labor Statistics reported on Friday. There are now nearly 138.5 million people on non-farm payrolls -- a high that finally tops the previous record of nearly 138.4 million set in January 2008. We've finally gotten back all the jobs we lost in the recession -- five years after the recession officially ended.

We can now retire this chart from Calculated Risk blogger Bill McBride, which Business Insider has long called "The Scariest Chart Ever." It shows how miserably long it has taken us to recover all of the recession's job losses, and how historically awful the recovery has been:

scariest ever

Unfortunately, we have a ready replacement for the Scariest Chart Ever, which shows the job market is still in a deep, deep hole. It's from the Economic Policy Institute, a think tank focused on labor issues. The EPI estimates that, in order to keep up with population growth, we should really have 7 million more people working today than we do:

jobs gap

"We are far, far from healthy labor market conditions," EPI economist Heidi Shierholz wrote on the EPI's Working Economics blog on Thursday.

In other words, the economy and job market have been growing for the past five years, but not nearly fast enough to give everybody a job that needs one. Discouraged after years of not being able to find work, people have slinked off to the sidelines and given up trying to find a job, resulting in millions of people not being counted in the official unemployment numbers. If these people came back, the unemployment rate would be 9.7 percent instead of 6.3 percent:

You could possibly quibble with the EPI's methodology. In figuring out how many workers are missing from the labor force purely because of discouragement about the economy, the EPI tries to strip out the effect of Baby Boomer retirements. To do this, EPI economists use a 2007 BLS forecast of future retirements, which might no longer be relevant -- it's possible the recession caused a shift in these numbers.

In other words, it's possible that more people than the EPI realizes have left the labor force, never to return. The Fed has been thinking about this possibility for quite a while.

Still, there is no doubt that at least some of the millions of people missing from the labor force are waiting for new jobs to come along. The job market still has a long way to go to get those people off the sidelines.

Mark Gongloff   |   May 23, 2014    2:11 PM ET

What is it with economists and spreadsheets? Another monumental work of economic research may have big data errors, if a new report by the Financial Times is true.

The blockbuster book by French economist Thomas Piketty, Capital In The Twenty-First Century, contains "many unexplained data entries and errors in the figures underlying some of the book’s key charts," FT writers Chris Giles and Ferdinando Giugliano claimed in a story published on Friday (subscription required).

Piketty defended the book at length in a response published on the FT's website.

The alleged errors don't seem to be as damning to the entire premise of Piketty's book as were the spreadsheet errors of Harvard economists Ken Rogoff and Carmen Reinhart, authors of an infamous study used to justify strict austerity measures in the U.S. and Europe. But they could undermine the book's reputation for analytical rigor. They will certainly lead to a frenzy of new scrutiny.

In a deeper dive on the specific errors, Giles noted what he described as fundamental problems with some of Piketty's numbers on wealth inequality.

"I discovered that his estimates of wealth inequality -- the centrepiece of Capital in the 21st Century -- are undercut by a series of problems and errors," Giles wrote. "Some issues concern sourcing and definitional problems. Some numbers appear simply to be constructed out of thin air."

Giles also said that the spreadsheets Piketty provided as source material for his book have "transcription errors from the original sources and incorrect formulas. It also appears that some of the data are cherry-picked or constructed without an original source."

This is an attack on one of the key pillars of Piketty's book, which claims that inequality is destined to return to the heights seen in earlier centuries unless governments intervene. The best-selling book has been embraced by liberals as a call to action to against inequality, and attacked by conservatives as a call for socialism and wealth redistribution. But nothing so far has dented the book's reputation for serious number-crunching.

In his detailed response, Piketty did not confirm or deny that there were any big errors in his data, but said his raw data sources had to be adjusted in some cases to paint a smoother picture, or to fill in gaps.

“I have no doubt that my historical data series can be improved and will be improved in the future," Piketty wrote, "but I would be very surprised if any of the substantive conclusion about the long-run evolution of wealth distributions was much affected by these improvements."

Piketty also pointed out that subsequent studies have backed up many of his conclusions, including the idea that wealth has become more concentrated in the U.S. in recent decades.

Giles seemed unsatisfied with these responses, declaring the entire premise of Piketty's book on shaky ground.

But, just as with the initial discovery of errors in Reinhart and Rogoff's work, this controversy has only begun. People will be pulling apart Piketty, and the FT, for months and maybe years to come.

Credit Suisse Proves It Really Is Too Big To Jail

Mark Gongloff   |   May 20, 2014    9:28 AM ET

Pleading guilty to criminal charges is proving so harsh and damaging to Credit Suisse that its stock price is only up 1 percent Tuesday morning. Must be nice to be too big to truly prosecute.

The Swiss bank pleaded guilty Monday evening to conspiring to help U.S. customers evade taxes, the first such guilty plea by a major financial institution in years. Not long ago, prosecutors, regulators, banks and shareholders all feared that having a major bank like Credit Suisse plead guilty could have catastrophic consequences for the bank and the global economy. Now they know better -- everything will be just fine.

"We continue to be hopeful and encouraged that there will be very little impact," Credit Suisse CEO Brady Dougan, who will keep his job as part of the bank's deal with prosecutors, said in a conference call Tuesday morning.

That should certainly make banks think twice before committing more crimes: It will make them think that doing crimes, and even copping to them, is not such a big deal.

credit suisse

No wonder shareholders are cheering and Wall Street analysts are keeping their "buy" ratings on the stock: Top bank executives will get to keep their jobs, the bank can pin the whole thing on a handful of underlings, and it won't have to give up a list of client names to the government. Credit Suisse will have to let an independent monitor keep an eye on it, but that's a minor inconvenience at worst. The guilty plea could cost the bank some clients here and there, but investors and analysts are betting there won't be much impact. The most painful part of the deal, the $2.6 billion in fines, is manageable, less than one quarter's revenue.

Government sources boasted to The New York Times about how a Credit Suisse lawyer begged them for mercy "with a quiver in his voice" before they brought down the hammer of swift, merciless justice -- the "force of the law," as the NYT's headline puts it. In the end, this lawyer was basically Brer Rabbit begging not to be tossed into the briar patch -- the bank got exactly what it wanted.

At the same time, our brave prosecutors were doing some begging of their own, pleading with regulators not to use a Credit Suisse guilty plea as a reason to force the bank to stop doing business, which would have rattled the financial system.

We're probably going to hear a lot from the Justice Department about how this case proves prosecutors have finally solved the problem of "too big to jail." Not by a long shot.