Attack Friday: How retailers hope to control sales lunacy
Recapping the day's news and newsmakers through the lens of CNBC.
Look hard enough and you can always find a bright side. Well, almost always. Though earlier-than-ever holiday deals mean retail employees will be working on Thanksgiving and many families will be rushing dinner to shop, early openings may serve as a kind of relief valve for the bargain obsession that has caused store fights, tramplings and other incidents in past Black Fridays. This year, more stores are likely to stagger sale times, a tactic that last year seemed to prevent mob scenes. Others will use cordons, extra security and maps to help customers find sale items. For shoppers who make one-hour sale blocks but can't get what they want, Wal-Mart will hand out rain checks. And because many people won't shorten Thanksgiving to shop, Thursday night openings may draw smaller crowds than recent Black Friday starts.
"It keeps somewhat of the frenzy under control and down. We want to avoid any type of frenzy."—Sonya Hostetler, Wal-Mart's vice president of asset protection and safety, on the merits of staggering sale hours
When last we looked, just days ago, a major shareholder was pressing Men's Wearhouse to reverse its rejection of a merger offer from rival Jos. A. Bank. Now, in the latest skirmish in the wear warfare, Men's Wearhouse has turned the tables by proposing to buy Jos. A. Bank for $1.2 billion. That's $55 a share, or just under a 10 percent premium, a level Jos. A. Bank shares closed above today, at $56.29, after an 11 percent gain.
"Given that JOSB [Jos. A. Bank] has previously stated it would be willing to be acquired by MW [Men's Wearhouse], we anticipate that JOSB will give MW's offer considerable consideration."—analysis by Stifel Nicolaus
An elite housing bubble
Home prices rose 13.3 percent in the 12 months ended in September, the biggest gain since 2006. But what's really behind that jump? The standard line says it's the warming economy and more-reasonable lending standards. But Nobel laureate Robert Shiller, co-founder of the Case-Shiller Home Price Index, credits investment money from firms like Blackstone, the private equity firm. The problem, says Shiller, a Yale economics professor, is that once these pro investors conclude the easy money's been made, they may pull that prop from the market, killing the upward price momentum. Ordinary buyers, says Shiller, remain cautious.
"The word from [housing market investors] seems to be that they're long-term investors, but I suspect they're not. They've learned that there's short-run momentum in the housing market and they know how to play momentum."—Yale economics professor Robert Shiller
As that item on housing notes, Americans aren't all that thrilled with the way things are going. In fact, a new Conference Board survey shows consumer confidence fell in November. What's bugging people? That survey suggests job anxiety is high. And another, by the Washington Post and the Miller Center think tank shows that six in 10 workers worry they'll lose their jobs, the highest level since the 1970s. A record one in three workers say they worry "a lot" about losing their job, and that category jumps to 54 percent for people earning $35,000 or less. Among lower-income people, 85 percent fear their family won't earn enough to meet expenses. That's 25 points higher than in the 1971 survey.
Dangers of diversification
The 60/40 stock/bond investing rule is like mom and apple pie. It's been around for 60 some-odd years and generations of investors have done just fine with it. It returned about 10 percent a year from 1990 through 2011. But now one of the greatest investing thinkers or our time, Wealthfront chief investment officer and Princeton professor Burt Malkiel, author of "A Random Walk Down Wall Street," says a 40 percent bond allocation could be disastrous as rising yields drive down bond prices—the opposite of what happened during those good years for 60/40. Some bonds should be replaced with dividend-paying stocks, Malkiel says, and a 50-something investor should consider the following allocation: 5 percent cash, 27.5 percent dividend payers and bonds (emerging markets and tax-exempt), 12.5 percent REITs and 55 percent stocks.
"The investor in bonds is, I think, very likely to get badly hurt by sticking with the 60/40."—Malkiel
—By Jeff Brown, Special to CNBC.com