Post 341: Denial and Decline: Signs from the Real Economy

• Manufacturing in the US has been contracting for most of the last three years.
• Chipotle has a younger customer base that is struggling economically and thus eating at home more often.
  • Its share price is down 47% this year.
• Starbucks comparable sales finally turn positive – just.
• Introducing the PM Loser Index.
• McDonald’s sales tick down a bit but still in positive territory.
  • Traffic from low-income consumers was down almost 10%.
    • Inflation pressuring margins but profitability still rose.
• Clorox sales are down.
  • And consumers across all income groups are trading down to lower cost/better value items.
• Diamonds are a man’s best friend?
• Kimberly-Clark sales ticks down but still in positive territory – just.
  • And they announce the acquisition of Kenvue (the consumer health company that Johnson & Johnson spun-off).
    • My thoughts on why they bought it.
• Tyson Food’s beef division is steadily increasing beef prices, but continues to lose a considerable amount of money.
  • Consumers seem to be switching from beef to chicken.
  • And a look back.
• In Financial Ructions:
  • We look at a WSJ article from February of 2008 by the late Martin Feldstein.
    • And how he saw well before others that the US was in recession.
      • And why the downturn would be more severe and last longer than previous recessions.
  • And some similarities to today’s situation.
• Book Review
  • We continue Chapter 10 of Where Keynes Went Wrong by Hunter Lewis.
    • We find that Keynes believes that interest rates should be driven to near zero and kept there.
      • HL and I explain why this is really bad for the economy.