iOS app Android app More

Mark Gongloff   |   August 13, 2014   12:47 PM ET

Kim Kardashian has been accused of MURDER, everybody. Murder of a video game. But she is innocent. Innocent, I say!

The victim is Candy Crush, the super-fun game of, um, crushing candy that simply everybody was playing in August... of 2013. The crime scene is the New York Stock Exchange, which was splattered on Wednesday with the blood and guts of Candy Crush maker King Digital, whose shares were down 24 percent shortly after the opening bell. It turns out that not quite everybody is playing Candy Crush any more, and King Digital hasn't yet come up with a new game that everybody wants to play.

So who killed Candy Crush? According to this Business Insider headline, Kim Kardashian done it. The BI story is about a fairly dull Deutsche Bank analyst note that mentions Kardashian's ridiculously popular app, Kim Kardashian: Hollywood, as one competitor for Candy Crush. The note says the game 2048 is another competitor, but the headline "2048 Is Killing Candy Crush" is not nearly as clickable. (Believe me, I am not hating: This is how the headline game is played. When you can put Kardashian in a headline, you do it.)

Deutsche Bank points out that Candy Crush is a ridiculously expensive game (if you go for its in-app purchases to keep the game going). But then so is Kim Kardashian: Hollywood, which makes an estimated $700,000 a day from in-app purchases, on its way to an estimated $200 million for the year. It is so expensive that parents are calling Kardashian & Co. "vile scumbag pigs" and Kardashian has been forced to defend it.

Aha, you might be saying, here is more proof that Kardashian is the murderer: All of the life-giving moneys are going to her instead of to Candy Crush. But I submit to you, ladies and gentlemen of the jury, that Candy Crush was dead long before Kardashian arrived.

Exhibit A: Look at how the air started hissing out of the Candy Crush bubble a year ago:

Exhibit B: When King Digital priced its IPO in March, people were already declaring it over. Here's a particularly brilliant piece of analysis that AV Club's John Teti wrote at the time:

King, the future one-hit wonder responsible for the cellular telephone game Candy Crush Saga, announced today that it will pretend to be worth up to $7.6 billion before the studio inevitably collapses.


The Candy Crush firm may be taking notes from its competitor Zynga, which is in the more advanced “collapse” stage of the game-studio collapse cycle after executing its hilarious “People will never get tired of FarmVille” strategy to perfection.

King's IPO priced at $22.50 and promptly collapsed at the opening bell on its first day of trading in March. It has hit that IPO price just once since -- just one opportunity in almost five months for people who bought the stock at the IPO price to cut their losses.

king stock

The stock was just above $14 a share on Wednesday.

If the stock price is for shit, you must acquit. (In other words, Kim Kardashian is innocent.)

Mark Gongloff   |   August 6, 2014    1:02 PM ET

The Great Recession ended more than five years ago, but good luck trying to convince many Americans of that.

Nearly half of all Americans, 49 percent, think the recession never ended, according to a new NBC/Wall Street Journal poll. And that number actually represents progress, since 57 percent felt that way in March. In fact, many polls have consistently shown that most Americans have long thought the recession, which officially ended in June 2009, is still ongoing.

The new NBC/WSJ poll has a chart that helps illustrate why this might be: Despite record levels of hiring and record highs in the stock market, huge numbers of people say they're still feeling the recession's effects. Here's the poll data:

lingering pain

As Josh Barro noted in March, this attitude is mainly a result of wages that continue to be flat and terrible, even as the rest of the economy is improving.

Mark Gongloff   |   August 1, 2014   10:54 AM ET

The job market is still not the greatest, but we just got one hopeful sign that it might be improving a bit.

The economy added 209,000 jobs in July, and the unemployment rate ticked up to 6.2 percent from 6.1 percent, the Bureau of Labor Statistics said Friday. Believe it or not, both of those numbers are encouraging.

The reason the first number is encouraging is because, duh, jobs. The encouraging part of the second number, the unemployment rate, is less obvious. Normally, higher unemployment is bad news, and people seeing HIGHER UNEMPLOYMENT on the evening news tonight will naturally assume the worst. But this time, unemployment actually rose for a good reason.


Source: BLS data

Here's why: Technically speaking, unemployment is the percentage of people in the "labor force" who don't have a job. To be counted in the labor force, you have to be looking for a job. One reason unemployment has fallen so quickly in recent years, from a peak of 10 percent back in 2009, is that a lot of people stopped looking for work. They took themselves out of the labor force. Once they stopped looking for work, they stopped being counted as "unemployed." Voila, the unemployment rate goes down.

But in July, 329,000 people jumped into the labor force, and that's the main reason the unemployment rate ticked higher. This is a hopeful sign: It could mean that people are hearing there are more jobs, and so they're starting to look again. They're just not finding those jobs right away, or at least not enough jobs for all 329,000 people. That's why unemployment rose, as it sometimes does at times like this.

Here is a caveat salad: These labor-force numbers jump around a lot. We could easily see 500,000 people leave the labor force in August. A steadier number, the percentage of the working-age population in the labor force, is still dismally low. It ticked up a tiny bit in July. But at 62.9 percent, the labor-force participation rate is still near the lowest level since the 1970s:

labor pool

Source: BLS data

More importantly, wages are still dead in the water -- average hourly earnings for all employees are up just 2 percent in the past year, basically keeping pace with inflation. We're still far from a fully healthy job market.

Mark Gongloff   |   July 31, 2014   12:48 PM ET

America is arguably the most advanced economy in the world, but today it resembles a toddler who just accidentally pulled down the Christmas tree and set the house on fire.

That's hyperbole, sure. But the fact is that one conservative American billionaire and a handful of American judges have just pushed Argentina, a nation of 43 million people with an economy bigger than that of the Netherlands or South Africa, into defaulting on its debt. It's a move that threatens not only chaos for the Argentinian people, but potential chaos for other countries hoping to borrow money in the future.

"This is America throwing a bomb into the global economic system," Columbia University economist Joseph Stiglitz told The New York Times on Thursday in a front-page story about the battle.

paul singer

Billionaire Paul Singer

The conservative billionaire is Paul Singer of the hedge fund Elliott Management. Singer has given millions of dollars to George W. Bush, Mitt Romney and Swift Boat Veterans For Truth, to name a few causes (including, to his credit, support for gay marriage and LGBT rights). He has waged a years-long war with Argentina over its debt, driven by his fervent, conservative belief that debtors should pay creditors all of the money they owe, according to the NYT.

Elliott Management did not immediately respond to a request for comment.

Here's a quick sketch of the background on this complicated story: After Argentina defaulted on its debt in 2001 amid an economic depression, it forced most of its creditors to take a lot less money than they had loaned to Argentina in the first place. In bond-market lingo this is known as a "haircut," and it is sort of like The Moe on the Spectrum of Desirable Haircuts.

But the Moe is arguably better than getting scalped (to continue the metaphor) -- unless you are Paul Singer. He and a handful of other investors would rather get nothing, and pay millions of dollars to lawyers along the way, than settle for The Moe.

Through a Cayman Islands subsidiary, NML Capital, Singer had bought up a bunch of Argentinian debt on the cheap after the country defaulted. Then he and other holdout investors, including other "vulture funds" like his, began demanding Argentina pay them in full.

moe howard

The original Moe haircut (left)

Argentina refused to pay these vulture funds, on account of their being vultures, but kept on paying its Moe-coiffed bondholders. Singer said this sort of behavior made the ghost of Ayn Rand cry -- I'm paraphrasing -- and he fought and fought and fought it in court.

Then in 2012, a federal judge, Thomas Griesa of the Southern District of New York, got the gospel of Paul Singer. He decreed that Argentina could not keep paying its Moe-coiffed bondholders if it wasn't paying Singer and the other holdouts. Not only that, but he also declared that any banks playing middle-man between Argentina and aforementioned Moe-coiffed bondholders would be in trouble with the law.

This was a radical decision. Worse, it might have been kind of stupid. Times columnist Floyd Norris pointed out recently that Griesa "had not completely understood the bond transactions that he had been ruling on for years."

But the Second District Court decided that Griesa's ruling was A-OK, leading Felix Salmon to call them "poltroons." Poltroons, I say!

And then finally in June, the U.S. Supreme Court, led by Associate Justice Antonin Scalia, declined to hear Argentina's appeal. Last-ditch negotiations to end the dispute failed Wednesday night, and Argentina did not make a scheduled bond payment -- again, because Griesa had ordered it not to do so. Bada bing, bada boom, Argentina is in default and nobody gets paid.

Some of the blame for this is arguably Argentina's. Maybe it should have weighed its disgust with Singer against the need to protect its citizens from another financial crisis. Forbes' Agustino Fontevecchia suggests that maybe it didn't protect itself well enough legally.

Fontevecchia also notes that Argentina still has time to cut a deal and forestall all of this. The nation has not reached the point of no return, beyond which it can't borrow any more and its economy devolves into turmoil. But they're closer to that point than they should be.

Singer's victory stands to make it a lot harder for other debt-burdened countries to cut deals in the future, the International Monetary Fund warned last week. After all, what creditor is going to want to take The Moe when there's hope some court will let them get ... The Fabio?

The Fabio (Source: Giphy)

Mark Gongloff   |   July 29, 2014   10:39 AM ET

After wrecking the U.S. economy and sucking hundreds of billions of dollars from American taxpayers for their own survival, what can our patriotic big banks do for an encore? Why, help American companies flee the U.S. to avoid taxes, of course. For America!

Andrew Ross Sorkin had a must-read New York Times column on Tuesday about how some of our biggest bailout recipients also have the biggest share of the nearly $1 billion banks have made in the past few years helping U.S. companies do "inversions." That's when an American company buys a company in an foreign country that has a lower tax rate and then moves its headquarters to that country to shave a few points from its tax bill, possibly costing the U.S. government $19 billion over the next decade. For America.

And you'll never guess which bank has made the most money on this patriotic activity! OK, you'll probably guess: It is Goldman Sachs:


Yes, the Vampire Squid has made more than $200 million advising companies on 10 different inversion deals since 2011, according to the NYT's crunching of Thomson Reuters data. The second-busiest inversion handmaiden is Morgan Stanley, with 8 deals at nearly $98 million. JPMorgan Chase has made more than $184 million on 6 such deals, and JPMorgan CEO Jamie Dimon has taken the extra step of publicly defending the practice, Sorkin noted.

“We have a flawed corporate tax code that is driving U.S. companies overseas,” Dimon recently said on a conference call. “Even if you stop and say, ‘Don’t invert,’ capital will move away.”

And then Dimon added this hilarious kicker: "I'm just as patriotic as anyone." Which is a little like the "some of my best friends are black" racism defense.

I dare say that Jamie Dimon might not be exactly as patriotic as anyone, like, say, a soldier holding it down at a forward operating base in Afghanistan or, I don't know, maybe the CEO of a company that decides against doing an inversion for reasons of actual patriotism.

But Jamie Dimon is not the first person in a Sorkin column to declare their undying love of country while doing the opposite thing. In a recent column titled "Reluctantly, Patriot Flees Homeland for Greener Tax Pastures," Heather Bresch, the CEO of drug maker Mylan, called herself a patriot as she reluctantly packed her bags to reluctantly move her company forever to the Netherlands, in order to reluctantly cut her company's tax bill from 25 percent to the "high teens."

Dimon and other defenders of inversions claim they keep U.S. companies competitive and so are truly patriotic. If only the U.S. would cut corporate tax rates, they say, then these companies would stop running away. But most of these companies already pay far less than the statutory tax rate of 35 percent. And one tax professor told Sorkin that the U.S. would have to cut its corporate tax rate to less than 10 percent to have any real effect.

Unlike Dimon and Bresch, many bankers involved in inversions apparently have normal human shame responses and thus declined to comment to Sorkin on the record about inversions. One told Sorkin, anonymously:

“This is going to sound cynical, but as much as I may hate these deals and the ramifications for our country, if I don’t do the deal, my competitor across the street will be happy to do it."

Pro tip: If you ever hear an investment banker start a sentence off with "This is going to sound cynical," you'd better brace yourself for a blast of weapons-grade cynicism right in the face.

President Obama has called for Congress to stop inversions, so of course they will probably go on forever. But if even Andrew Ross Sorkin, who usually struggles to find reasons to criticize Wall Street, is angry about them, then maybe the chances are a little better than we thought.

Mark Gongloff   |   July 29, 2014   10:27 AM ET

Rich people have been wondering why everybody is so mad at them when all they do is create jobs and have better genes and work harder than the rest of us schlubs. But it's no mystery.

The answer to why everybody is mad at rich people (who actually do not create jobs, have better genes or work harder than the rest of us) can be found in a new study by the Russell Sage Foundation, a New York research group, on how the Great Recession affected Americans' wealth. The typical household's wealth has been slashed by 43 percent since 2007, the year the recession began, tumbling from $98,872 to $56,335, according to the study.

For the top 5 percent of Americans, however, the story has been much different: Their net worth fell, too, but only by 16 percent, to $1.36 million from $1.63 million.

And looking at the slightly longer term, over the past decade, median household wealth is down 36 percent, while the household wealth of the top 5 percent is up 14 percent.

Here's another way of looking at it, an even longer-term view. This chart, from the Russell Sage report, tracks the change in wealth for various groups of Americans going all the way back to 1984.

wealth change

As you can see, for people at the very top of the wealth pile, their net worth has nearly doubled in the past 30 years. Median wealth, on the other hand, is lower than it was 30 years ago. The Reagan Revolution mostly benefited a lucky few, helping widen wealth inequality, a trend that seems likely to continue for the foreseeable future.

Meanwhile, at the bottom of the wealth pile, net worth has been more than cut in half over the past decade. The rich have benefited from a soaring stock market in the past five years. Some middle-class homeowners have scratched back some wealth thanks to a partial rebound in home prices. The poor, on the other hand, have no such assets, and their debts have piled higher -- debts, in many cases, owed to the wealthy.

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:


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.


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.


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 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.