Capitalism, The Fed and Economic Policy

Lerxst1992

mrussel1 said:

Lerxst1992 said:

Confirmation bias? Edit, ask AI that.

Your brain is turning to mush

When did you become 5? Happy birthday. 

Lerxst1992

mickeyrat said:

Tim Simmons said:

this is what WINNING looks like. 

Now do NASDAQ 

Lerxst1992

Lerxst1992 said:

Using McDonald's value meals as a macroeconomic indicator carries the same risks as using any single-company metric, but it also has its own specific set of complexities that can make the data misleading.

Here are the key risks associated with using value meals as an economic bellwether:

1. "Trading Down" vs. Overall Decline

This is the most critical and often misunderstood aspect of using value meals as an indicator.

 * The Misleading Signal: An increase in the sale of value meals may not always signal a weakening economy. In a mild downturn, or as people feel a financial pinch, they may trade down from more expensive dining options to a cheaper one, like a McDonald's value meal. In this scenario, McDonald's sales might even increase as it captures a larger share of a shrinking dining-out market.

 * The Real Signal: The more telling sign is a decline in total customer traffic and a decrease in sales even of the value meals. This suggests that even budget-conscious consumers are cutting back on fast food entirely, opting for cheaper alternatives like home-cooked meals. When this happens, it's a stronger signal of a true economic crunch.

2. Corporate Strategy and "Loss Leaders"

McDonald's and other fast-food chains often use value meals as "loss leaders"—low-margin or no-margin products designed to get customers in the door.

 * Promotional Push: A temporary surge in value meal sales might be the result of a deliberate, aggressive marketing campaign to win back customers, rather than a genuine shift in consumer behavior driven by economic conditions. For example, a new "limited-time" $5 or $6 deal could be a company-led effort to compete with rivals, not a reaction to a widespread recession.

 * Erosion of Profitability: From the company's perspective, a high volume of value meal sales can actually signal a negative trend. If the vast majority of customers are only buying the cheapest items, it indicates that the company's overall profit margins are shrinking. This is a sign of internal financial pressure, which may or may not be directly tied to the broader economic picture.

3. The Localized Nature of "Value"

The concept of "value" is not universal. The pricing and components of value meals can vary dramatically by region, city, or even individual franchise.

 * Franchise-set pricing: Since a large percentage of McDonald's restaurants are franchised, prices are set by the individual owners. A viral social media post about an "unaffordable" value meal in one high-cost-of-living area might not be representative of the rest of the country. This makes it difficult to draw a national conclusion from a few anecdotal data points.

 * Regional cost differences: The cost of labor, rent, and local ingredients varies significantly. A value meal that is genuinely affordable in a low-cost rural area might be prohibitively expensive in a major metropolitan center, regardless of the overall economic climate.

4. Limited Insight into Diverse Consumer Behavior

While value meals are aimed at budget-conscious consumers, they don't capture the full spectrum of the economy.

 * The "Affluent Consumer": McDonald's sales, even of value meals, don't provide insight into the spending habits of higher-income households. These consumers may be less affected by a downturn and continue spending on premium dining, luxury goods, and travel. A true macroeconomic indicator must reflect the health of the entire consumer base, not just one segment.

 * No Insight on Savings or Debt: The purchase of a value meal offers no information about a consumer's savings rate, debt levels, or job security. These are far more critical indicators of long-term economic health. A person may buy a value meal because they have no other choice, or because they are cutting costs elsewhere to save for a major purchase.

In conclusion, using McDonald's value meals as an economic indicator is fraught with risks. While a sharp increase in their sales could be a signal of a "trading-down" effect, it is a weak and incomplete data point on its own. It is far more useful when combined with other, more robust economic indicators like GDP, unemployment rates, and consumer confidence surveys.

Mush indeed.


Dude has no clue what he is criticizing.  Biased indeed

static111

Lerxst1992 said:

mickeyrat said:

Tim Simmons said:

this is what WINNING looks like. 

Now do NASDAQ 

Same stupid argument the Dems made for having a strong economy.  If people can't afford groceries the NASDAQ doesn't matter one bit 

mrussel1

Lerxst1992 said:

mrussel1 said:

Lerxst1992 said:

Confirmation bias? Edit, ask AI that.

Your brain is turning to mush

When did you become 5? Happy birthday. 

I’m trying to help you. Relying on AI for your arguments or writing atrophies your brain

Gern Blansten

Tim Simmons said:

Remember when Hardees did Fried Chicken?

Yeah they had acquired Roy Rogers or something... When I worked there they served roast beef sandwiches. Good stuff... I used to slice off a few pieces and eat every so often 

Tim Simmons

It had to be the sit down ms pac man machines

PJ_Soul

Any place can lure me with a Ms Pac-Man table version. My old local pub had one - it was an incredible place generally, converted from a mountain chalet (destroyed to buikd townhouse), but that Ms Pac-man table that you could be served at and drink and play was the Pièce de résistance that will stick in my memory for all time, lol. The Mountain Shadow. Damn. Now I feel sad. 

Lerxst1992

mrussel1 said:

Lerxst1992 said:

mrussel1 said:

Lerxst1992 said:

Confirmation bias? Edit, ask AI that.

Your brain is turning to mush

When did you become 5? Happy birthday. 

I’m trying to help you. Relying on AI for your arguments or writing atrophies your brain

Or, be slightly critical of the confirmation bias comments here

mrussel1

Lerxst1992 said:

mrussel1 said:

Lerxst1992 said:

mrussel1 said:

Lerxst1992 said:

Confirmation bias? Edit, ask AI that.

Your brain is turning to mush

When did you become 5? Happy birthday. 

I’m trying to help you. Relying on AI for your arguments or writing atrophies your brain

Or, be slightly critical of the confirmation bias comments here

?  That’s random. 

tempo_n_groove

PJ_Soul said:

Any place can lure me with a Ms Pac-Man table version. My old local pub had one - it was an incredible place generally, converted from a mountain chalet (destroyed to buikd townhouse), but that Ms Pac-man table that you could be served at and drink and play was the Pièce de résistance that will stick in my memory for all time, lol. The Mountain Shadow. Damn. Now I feel sad. 

You should buy yourself a tabletop version.

Have tournaments!

mickeyrat

US payrolls benchmark revision estimate suggests labor market weaker than previously thought - https://www.reuters.com/business/us-payrolls-benchmark-revision-estimate-suggests-labor-market-weaker-than-2025-09-09/

mickeyrat

putting this here...

One Illinois man’s decadeslong fight to convert his fields into rice paddies demonstrates how it’s possible to bring diversity to the Corn Belt, but improbable so long as federal farm policy remains focused on soybeans and corn.

Read the full story (with Capitol News Illinois): https://propub.li/45UyWKP

mickeyrat

For chemist Kris Hansen, 3M was a family affair; her father was a creator of the company’s N95 face masks.

Yet, after she found 3M’s forever chemicals in human blood, the company repeatedly doubted her work and stopped her research on the chemicals.

Read more (published May 2024): https://propub.li/4przTlu

DE4173

Tim Simmons

yeah and interest rate reduction will do that.

DE4173

Let's go!!!