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Paulitical Economy™

Paul Musson

23 episodes

1 day ago

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 ...

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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 ...

Show more...

Episodes (20/23)

Paulitical Economy™

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 ...

1 day ago

41 minutes

Paulitical Economy™

Post 340: The Reckoning Begins: Capital Misallocation Comes Home To Roost

All of a sudden a lot more companies are announcing layoffs.Things have significantly changed from when companies used to hoard employees just in case.A look back at Porsche.And sales are falling as their customers are feeling poorish.US inflation ticks up to its highest level in eight months with core inflation remaining well above the Fed’s 2% target.Which itself is a joke.Core inflation measures in Canada remain elevated.One of the biggest increases is in property taxes.As new development ...

1 week ago

47 minutes

Paulitical Economy™

Post 339: From Keynes to Krispy Kreme: The Economics of Unsustainable Indulgence

A look at social security in the US.It will be insolvent within ten years in large part because deductions from payroll to pay for social security are consumed rather than invested.Krispy Kreme is experiencing consumer demand that is softer than their donuts.And a look back.Sales for Gucci and Yves St. Laurent are less bad.And they sign a new deal with L’Oreal.L’Oreal continues to grow its like-for-like sales.And has been a solid long-term investment.Nestle announces thousands of layoffs.And ...

1 week ago

49 minutes

Paulitical Economy™

Post 338: Pepsi and governments lower the volume with further confirmation of our Special K economy

Cheap funding has been the main cause of housing affordability crises.After two quarters of negative sales growth, luxury group LVMH creeps into positive territory.And after only one quarter of negative sales growth, Domino’s soars into positive growth territory.Amazing what happens when you improve your customer value proposition.Pepsi’s volume has declined for thirteen straight quarters.And prices continue to rise.London’s black cabs are increasingly under threat.And a look back.Sales growt...

2 weeks ago

37 minutes

Paulitical Economy™

Post 337: More Beer, Less Bubbles: When Policymakers Toast Fake Growth

Beer maker Constellation Brands’ sales and share price are going down faster than its beer. US office vacancy rate ticked down from last year. But is still over 25% in some Western cities. When you buy a home the government assumes you’re paying rent to yourself and they add it to GDP making the economy look much stronger than it really is.Particularly if there’s a housing bubble. Another reason policymakers like to drive housing price higher.Mercedes Benz sales have been ...

4 weeks ago

42 minutes

Paulitical Economy™

Post 336: “Truckloads, Tax Loads, and the Working-Class Squeeze”

PACCAR is one of the leading truck manufacturers in the U.S.A look back.New truck deliveries are down 13.5% from pre-COVIDJ.B. Hunt is one of America’s largest trucking companies and its sales growth has finally nudged into positive territory.And no, supply chain bottlenecks did not cause the inflation of 2022.UPS sales growth in the US returns to negative territory.But Fedex’s sales accelerate.Mortgages in Canada are renewing at much higher rates.Inflation has a much greater impact on the wo...

1 month ago

35 minutes

Paulitical Economy™

Post 335: Paycheck to Paycheck, Kellogg’s, and a Dressing Down of the Federal Reserve

Two thirds of American workers are now living paycheck to paycheck.And job prospects are the lowest in at least 12 years.Kellogg’s has had a long history and the company split into two separate businesses a couple of years ago.Now both of those businesses will be taken over by private companies.Sales for both are very weak.Lennar is one of America’s largest home builders.Its home prices are now down over 20% from peak.And down from pre-COVID.Core inflation in Canada remains elevated.In Financ...

1 month ago

50 minutes

Paulitical Economy™

Post 334: Coffee, Airlines, and Lululemon: Signals of Strain

Tariffs are sending coffee prices soaring.A tax for American consumers with no benefit.Delta Airlines passenger revenue growth has been grinder lower for the last couple of years and is now flat:And now falling in economy class for two straight quarters.Lululemon has not grown comparable store sales in the US for a year and a half.And sales are accelerating downwards.The Canadian government has wisely scrapped next year’s quotas for new cars that must be low emission.Future targets may also f...

1 month ago

45 minutes

Paulitical Economy™

Post 333: From Heinz to Smucker: Prices Up, Demand Down, Spin Up

We start by taking a look back at Heinz.And two decisions that ended their long-term relationship with McDonald’s.Healthcare costs for Canadian boomers are being subsidised by the next generation.As well as their retirement.Headline consumer price inflation in the US ticks up in August and core inflation remains elevated.And it was mainly due to services i.e. not tariffs.Headline wholesale inflation fell.But core wholesale inflation was the highest in five months.J.M. Smucker posted their lat...

1 month ago

42 minutes

Paulitical Economy™

Post 332: Kraft Heinz Splits, Canada Drowns in Debt, Jobs Scarce — and Central Banks Sparked the Housing Crisis

After seven straight quarters of sales declines, and fourteen quarters of declining volume, Kraft Heinz has announced that they will split up the company.The merger of the two companies back in 2016 has been a disaster.And we take a look back.Canadians are falling behind on their debt payments.Home prices in Canada have outpaced those in the US.It’s primarily due to money supply growth and low interest rates.And Canadian politicians benefited more from this than the average Canadian.The Bank ...

2 months ago

44 minutes

Paulitical Economy™

Post 331: The World Works… Until Debt Takes Over

49% of the homes sold in the US this year were under the price of $400,000Up from 43% in 2023.Shooting deaths in New York City are at an all-time low.But shooting up is still a problem.Headline inflation in Canada excluding energy seems to be stabilising.But core inflation remains elevated.Canada’s income gap hits a record.The top 40% account for 66% of after-tax income.And 86% of net worth.Financial Ructions:Margin debt is at a record but short selling can impact this.And yes, the absolute n...

2 months ago

30 minutes

Paulitical Economy™

The Ford F-Series of pickup trucks have constantly been in the top six of cars sold going back to the 1960s.Pickup trucks now account for four of the top six.In the 2010s Japanese cars accounted for four of the top six.After experiencing two straight years of declining sales, Home Depot seems to be turning things around: slowly.Amazon continues its strong sales growth.Advertising and web services leading the way.And are now offering same-day delivery for groceries.Deere Corporation sales cont...

2 months ago

44 minutes

Paulitical Economy™

Large movie chains in the US are outperforming the industry.And a look back at AMC Theatres.French luxury goods company LVMH sales are still falling.Especially in Japan.US renewable energy credits are going away.A Danish company is particularly impacted.A poll shows that a slight majority of Canadians want to see home prices fall.But the percentage of homeowners who want this is likely much lower.Core inflation in the US ticked up for the second month in a row.In Financial RuctionsWholesale i...

2 months ago

31 minutes

Paulitical Economy™

McDonald’s turns things around.But lower income consumers are suffering.Caterpillar sales are still falling but not as much.A turnaround?But things not looking good at Gucci.RH (luxury furniture) has really turned things around.And some examples of their great corporate culture.Molson Coors no longer seems to be benefiting from the boycott of Bud Light.It’s share price is down 54% over the last ten years.And a look back.And Creemore!We look at the changes in Canada’s property prices since 197...

3 months ago

51 minutes

Paulitical Economy™

Starbucks is still seeing comparable store sales decline.But a fourth leg of their business is growing quickly.Chateau Lafite Rothschild is one of the world’s top wines.Its futures price is off 49% from its peak.Another look at the three main ways in which policymakers created Canada’s housing affordability crisis.They thought the benefits would trickle down to the next generation.Spoiler alert: they didn’t.Carbon Dioxide emissions by countryWho’s number one: USA, China or both?Microsoft is g...

3 months ago

46 minutes

Paulitical Economy™

General Motors has a long and interesting history.It has been hurt by tariffs, but sales did benefit as customers rushed to beat the tariffs.Women are twice as likely to be raped in the UK and Sweden than they are in the US.And a hundred times more likely than in Japan.Chipotle is a fast casual restaurant whose sales have been going in the wrong direction over the last year.A quick look back.Americans are going to the movies a lot less than they were pre-COVID.Higher ticket prices are helping...

3 months ago

45 minutes

Paulitical Economy™

Prices in the US are rising with eggs leading the way.To the extents that tariffs are pushing up prices it should be a one-time hit.Unless tariffs rise even further.Core inflation in Japan is steadily rising.Inflation in Canada is proving sticky.In Financial Ructions:We look at longer-term rates which are rising.This should lead to higher mortgage costs.In our book review of The Way the World Works.JW introduces the Laffer Curve where at some point higher tax rates lead to lower tax revenues....

3 months ago

20 minutes

Paulitical Economy™

US booze companies see impact from tariffs.First positive and then negative.Nike has not grown its sales for seven straight quarters.And just experienced its largest sales decline so far.Cocoa bean prices are very volatile and near historic highs.A look at the world’s largest chocolate manufacturer.Hershey sales are suffering.As is its profitability as the high cocoa bean price bite.A look at how growth in household wealth is only partially a reflection of growth in capital being produced in ...

4 months ago

29 minutes

Paulitical Economy™

Florida is one of the weakest housing markets in America.But prices are still sky-high compared to pre-COVIDNationally, sellers outnumber buyers by half a million.Prices are falling in some areas, but even with prices falling many will remain priced out of the housing market.America’s largest home builder’s sales are accelerating downward.The issue is affordability constraints, but it’s not about mortgage rates.Tesla’s car deliveries fall for the second straight quarter.Robotaxi to the rescue...

4 months ago

42 minutes

Paulitical Economy™

Carnival continues to ride the wave of higher prices.General Mills sales are decliningBut would be a lot worse if not for their pet business.Yet, JM Smucker’s pet division had a double-digit sales decline.And a look back.Airliner JetBlue is seeing declines in air travel.Its share price has been a 25-year disaster.Student loan delinquencies in the US are soaring.And government workers have a sweet deal.Insolvencies in Canada fell in April.We may finally be getting to a level that is less influ...

4 months ago

25 minutes