Minimum Wage, Maximum Stupidity

By Doug French, Contributing Editor

The minimum wage should be the easiest issue to understand for the economically savvy. If the government arbitrarily sets a floor for wages above that set by the market, jobs will be lost. Even the Congressional Budget Office admits that 500,000 jobs would be lost with a $10.10 federal minimum wage. Who knows how high the real number would be?

Yet here we go again with the “Raise the minimum wage” talk at a time when unemployment is still devastating much of the country. The number of Americans jobless for 27 weeks or more is still 3.37 million. And while that’s only half the 6.8 million that were long-term unemployed in 2010, most of the other half didn’t find work. Four-fifths of them just gave up.

So, good economics and better sense would say, “make employment cheaper.” More of anything is demanded if the price goes down. That would mean lowering the minimum wage and undoing a number of cumbersome employment regulations that drive up the cost of jobs.

But then as H.L. Mencken reminded us years ago, “Nobody ever went broke underestimating the intelligence of the American public.” Which means the illogical case made by Republican multimillionaire businessman Ron Unz is being taken seriously.

We Don’t Want No Stinkin' Entry Level Jobs Continue reading "Minimum Wage, Maximum Stupidity"

Wal-Mart Vs. Amazon: Which Should You Buy?

Toiling in the shadows of Google (Nasdaq: GOOG), Apple (Nasdaq: AAPL) and many other tech stars in California's Silicon Valley, a team of 1,500 technologists are hard at work on behalf of an unlikely employer: Wal-Mart (NYSE: WMT).

The retail giant has belatedly understood that simply having website for e-commerce won't cut it in the era of social media and mobile surfing. In response, the company is now committing serious resources to its digital efforts.

Will those 1,500 Wal-Mart staffers help turn the company into a leading-edge tech firm? Probably not. But they can identify hundreds of small ways to improve the online shopping experience. After all, consumers now carry the Internet in their pocket, thanks to the proliferation of smartphones.

Continue reading "Wal-Mart Vs. Amazon: Which Should You Buy?"

Dump Target? Only If You Want To Miss Double-Digit Upside

There are overreactions in the stock market all the time, leading to mispriced securities. This happens as investors tend to overreact to news or earnings. Almost no company is immune.

​Unjustified downward pressure can even happen to companies that offer products that touch every aspect of our lives. One thing that investors should remember is that these are usually near term pressures and can make for great buying opportunities. This is especially true if there is a long-term growth story is intact.

One recent example is blue-chip retailer Target (NYSE: TGT), which said last month that it had sustained a security breach of customer account info. The news continued to get worse for the stock as Target disclosed last week that additional info -- including phone numbers and street and email addresses -- might have been compromised. As a result, the company lowered its earnings outlook for its fiscal fourth quarter due to notably lower store traffic and sales stemming from news of the data breach. Continue reading "Dump Target? Only If You Want To Miss Double-Digit Upside"

Is Wal-Mart in trouble?

Wal-Mart Stores Inc. (NYSE:WMT) is the largest retailer in the world, and if they are have problems, then we really have to examine and be concerned about what is really happening to the economy.

Yesterday, it was reported that Wal-Mart stores were cutting back on U.S. orders amid an inventory backlog. It was later denied by David Tovar a spokesperson for Wal-Mart. However, true or false it managed to push the stock of Wal-Mart down over 2% on the day.

That is a fundamental viewpoint. What is interesting technically about Wal-Mart is the fact that it recently broke below a 25 month trend line.Trend lines are enormously important for determining the momentum and trends of stocks, commodities, and any number of items that can be charted. In order to be a valid trend line, it must touch three points along the line to be truly meaningful. The longer the time frame, the more meaningful and powerful the trend line becomes. A two year trend line like Wal-Mart recently broke thru to the downside is significant and should not be ignored.

Continue reading "Is Wal-Mart in trouble?"