New York City Restaurant Employment

The exponential growth trend failed in 2015, the Fed started raising rates in 2016, and then the pandemic hit in 2020. What's next? Meteor?



Source Data:
St. Louis Fed: All Employees: Leisure and Hospitality: Full-Service Restaurants in New York City, NY

The Road to NIRP Is Paved with ZIRP Intentions

The following table shows the annualized inflation rate in the 2 years before each recent recession, the inflation rate in the 2 years after each recent recession, and the differences between them.

I am not a believer in the economy will soon overheat theory. A $1.9 trillion stimulus package might sound like a shockingly large sum of money, but let's put this in perspective. Household net worth now stands at $123 trillion and has grown $63 trillion since the Great Recession in 2009. By comparison, $1.9 trillion is like loose change found in the couch.

Our exponentially growing monetary addiction requires ever increasing sums just so the wheels don't fall off. Has anyone actually considered that $1.9 trillion might not be enough?

Ten Rhetorical Stimulus Questions

1. Are we supposed to be shock and awed by a $1.9 trillion stimulus package that's only equivalent to 1.5% of household net worth?
2. What if savers continue to save?
3. Are we counting on savers to spend?
4. Are we counting on spenders to spend what they've already spent?
5. How does one hoard services?
6. If there really is pent-up demand for haircuts, will people be getting twice as many over the next 2 years?
7. How much of a $1400 stimulus check would we need to save to earn $4.20 in annual interest in an online savings account that only has a 0.3% interest rate?
8. Should we use the $1400 instead to buy 100+ fast food meals, 2 shares of Tesla @ $674, or 5 shares of GameStop @ $247?
9. Easy come, easy go. Am I right?
10. Human sacrifice? Dogs and cats living together? Mass hysteria?

Humans needlessly sacrificed, dogs and cats living together, mass hysteria. It's been quite a year.

Unprecedented Restaurant Pain

The following chart shows the natural log of the sales of food services and drinking places. Constant exponential growth is seen as a straight line.

This is probably the most disturbing exponential trend failure that's ever been posted on this blog. The pandemic makes the Great Recession look like a minor hiccup. Will things ever return to normal? How many restaurants will actually survive?

The Sarcasm Report v.274

February 4, 2017
CNBC: A couple who spent $30,000 eating out last year highlights a critical money lesson

The life lesson is obvious. If you are spending $80+ per day to eat out then it is very easy to forget exactly how much you are spending. Make it an even $100 though, and you'll never forget. Neither will your waiter! Round up, I say. Round up! It's a win-win for everyone!

"What most people do when they earn a dollar is pay everyone else first. They pay the landlord, the credit card company, the telephone company, the government ..." writes financial adviser David Bach in "The Automatic Millionaire," and at the end of the day, they pay themselves whatever is left over. Oftentimes, that's not much.

Pay yourself first. If there is anything left over then send a few dollars to the landlord, the credit card company, the telephone company, and/or the government. It's a vastly superior plan. None of those entities need the money as much as you do. What's the worst that could happen? Eviction notices? Penalties? Collections? Liens? Lawsuits? Summons? Oh, please. That only happens in the movies!

Career Idea: Anthropology Barista?

November 14, 2016
Kiplinger: 10 Worst College Majors for Your Career

5. Anthropology

Annual online job postings: 923

...more than 12,000 people who recently studied anthropology in college and grad school.

Yikes!

The Sarcasm Report v.263

October 20, 2016
USA Today: Your groceries may be cheaper, but farmers and supermarkets feel the pain

Christopher says many shoppers are using the savings to buy more groceries.

This is great news. Market forces are finally tackling the widespread problem of shrinking waistlines in America, says my secret source, an anonymous executive of a for-profit statin drug manufacturer.

Michelle Morris, 45, of Canton, Mich., estimates her family is saving $10 to $20 a week at the grocery store. As a result, they’re eating out less frequently...

More great news. Now that food prices have fallen, people can finally afford to eat at home instead of dining out. There's nothing quite like anecdotal evidence to support a questionable implied theory.

Amazon: With Great Power Comes Little Responsibility

July 20, 2016
Birkenstock quits Amazon in US after counterfeit surge

For example, Amazon commingles inventory from distributors at its fulfillment centers, so authentic products and fakes can get mixed together.

Amazon better get a handle on the counterfeit problem. Commingling is definitely not the solution.

I recently paid full price for two Playstation 3 controllers to replace ones that failed (due to excessive use as a gamer). I wanted to buy on Amazon for the convenience and the better price but did not trust the product they are selling.

Amazon: PlayStation 3 Dualshock 3 Wireless Controller (Black)

Although it averages 4 stars, take a look at the 13% who rated it 1 star (which I always read before making a purchase). There is a common theme.

Be wary of fakes!!

I've taken apart both this controller and a genuine Dualshock 3 controller, and the innards are vastly different as well.

Meanwhile, over at Best Buy...

Best Buy: Sony - DualShock 3 Wireless Controller for PlayStation 3 - Black

98% of customers recommend this product.

Best Buy won that round, at least for me, even at the higher price point. I was willing to drive somewhat out of my way to pick up in person. I've been using the controllers for a few days. No complaints so far.

This is how it starts. Ask Chipotle. Once trust is lost, it can be very difficult to get it back. I can't speak for others, but my trust is clearly fading.

Does Amazon's return policy solve the problem? Not exactly. First, it's annoying to have to return stuff. Second, Amazon may close your account if you return too much stuff. If the counterfeit problem continues to grow then things will certainly get interesting.

This is not the first time I've written about counterfeiting, and it won't be the last. Still haunted by my experience as a research assistant in college.

February 21, 2011
Counterfeit Wealth

Somebody, somewhere, is driving a car with at least one engine mount bolt made out of lead. I truly believe that.

I offer this story as a warning to those buying precious metals. If engine mount bolts can be faked, then anything can. To this day, I would not be able to tell the difference between the bolts without testing them. That's how good the fakes were.

Eddie Lampert's Hometown Fries

Oops. My personal headline robot has run amok again.

No, this story isn't about the burning of the town where Eddie Lampert once grew up.

No, this story isn't about a new and exciting fast-food restaurant created by the legendary Wall Street whiz kid and his dedicated staff of corporate executive minions. It's too bad though. An artisan Craftsman burger has a nice ring to it.

It's simply a story about more of the same. Very expected. Very dull. Very boring. Sorry about that.

June 3, 2016
Sears Hometown reports 1Q loss

HOFFMAN ESTATES, Ill. (AP) _ Sears Hometown and Outlet Stores Inc. (SHOS) on Friday reported a fiscal first-quarter loss of $3.6 million, after reporting a profit in the same period a year earlier.

June 3, 2016
Analyst: There's 'No Reason' For Consumers To Shop At Sears

"They don't have any reason for being anymore," he also told Bloomberg.

That kind of naysaying negativity has no place in America. Stating the obvious like that causes irreparable damage. Investors who buy high and hold low don't want to hear it. Trust me on this. It's just not their style.

The Hole Retail Story

May 18, 2016
Yahoo Finance: The whole retail story in 2 earnings announcements

The divergent quarterly results of Lowe’s (LOW) and Target (TGT) on Wednesday confirm a trend in consumer spending: Americans are spending less on apparel while spending lots in home-related categories.

Are people still shopping at grocery stores? Buying cars? Filling their prescriptions? Eating at restaurants? Buying gasoline? Furniture? Electronics? Sporting goods? Shopping online? How's Eddie Lampert at Sears holding up? Are there any Memorial Day sales this year? Are we going to have a great Christmas? How about next year? Have robots replaced all the retail employees yet? Is Walmart still hiring older workers to greet shoppers and make sure nobody is leaving the stores without paying? How about the bathroom situation? Have we finally figured out who can use which ones? Has Cramer chimed in yet? Is Ackman still shorting Herbalife? When can I expect sales taxes to go up again? Why don't they ever seem to fall? Are Canadians still coming down to buy stuff or is our dollar too strong? Would now be a good time to buy stuff in Canada? How about Apple? The gaming industry? People still downloading apps? Any good ones I don't know about?

Oops. That's one helluva paragraph. Sorry about that. Unfortunately, I have many more questions to ask. I don't know. Seems like I'm missing part of the whole retail story, but maybe that's just me.

So help me, if I get to the last page of this whole book and find out the butler did it, this story's gonna suck.

Dammit. That was supposed to be the end of my post but... Are people still buying physical books? Or are they all electronic now? What's the current Emergency Room Bill to College Textbook price ratio? Why do those two seem so linked? Coincidence? How can textbooks be so expensive when most books with text are so cheap? Where has Borders gone? Is Barnes & Noble next? What will replace them? Will our strip malls shrink? How about nail salons? Can there ever be too many?

Gasping for breath! I need to know!! Are...

To Be Continued

Corporate Guarantee of the Day

October 21, 2015
Subway starts measuring 'footlong' subs in response to lawsuit

Subway is putting its "footlong" subs up to a tape measure to guarantee the subs are actually what they advertise: 12-inches long.

Finally! It's a corporate guarantee that we can count on!

Subway maintains in the settlement agreement that due to variability in food production and the baking process, it "will never be able to guarantee that each loaf of bread will always be exactly 12 inches or greater in length after baking."

Or not, lol. Sigh.

In honor of this guarantee, I promise to never mention Jared again when talking about Subway in polite conversation. Yes, you heard me right. Jared will never be mentioned again. I promise! The last thing anyone wants to do is think about Jared when eating one of their sandwiches. You know, because of what Jared did.

Oops. I think my promise is getting off to a very poor start. Sorry about that! ;)

The Sarcasm Report v.247

October 7, 2015
Cramer on Yum earnings: ‘This is inexplicable’

CNBC's Jim Cramer said Wednesday he is baffled by Yum Brands' latest earnings miss.

If this was a drinking game and you had to drink a shot of Vodka every time something baffled Jim Cramer, then just think how sober you might be!

That's assuming you still have a functional liver after his "Winners of the New World" article back in 2000, of course. ;)

Two Subway Promotion Ideas

September 6, 2013
The Onion: New Subway Promotion To Honor Subtember 11

...visitors of the restaurant’s tens of thousands of franchise locations will be able to “fly on in” and pick up two footlong subs of their choice for only $9.11.

It just doesn't get any less politically correct than that. Or does it?

The Jared Fogle Septender

Up to 7 inches of tenderness sort of kind of NOT suitable for kids of all ages!!

I did not just go there. Oh, dear. I did.

Shame on me. Bad Mark! Bad! Bad!

How will Subway ever live this down? They bet the advertising farm on a "sure thing" who will be forever imprisoned in our thoughts.

July 7, 2015
We’re All Making The Same Dumbass Joke About Jared From Subway

We embrace anything that makes it possible for us to sound-off on any and every issue that comes our way. We condemn people in our court of public opinion where the trials last maybe three minutes, and that’s only if we are in a break between Netflix episodes.

Hey! My joke isn't the same! That said, I am in a break between Netflix episodes. Seriously. ;)

Beware of the Warning that There Is a Bubble in Stock Market Bubble Warnings

August 11, 2015
MarketWatch: Opinion: Beware of the bubble in stock market bubble warnings

It's sure been a rough 10 days for those who found comfort in his warning.

Today’s equity market doesn’t resemble the one in 2000

Agreed.

The dividend premium.

Unlike the dotcom bubble, investors are flocking to dividends and dividend growth. Some even call it chasing yield. Agreed.

Shares of new corporate cash from equity issuance.

Unlike the dotcom bubble, corporations are generally buying their own stock instead of selling it. The more they buy the more the public buys. That's great news for corporate executives with fat stock options! Agreed.

What could possibly go wrong? Here's a crazy theory. I'm really swinging for the unbelievable crackpot fences on this one.

What would happen if new corporate cash was coming from debt issuance? What if companies used that cash to buy their own shares and help fund their dividends? What if they were doing so because they thought all this cheap "junk" credit was a perpetual free lunch that only offered enormous upside and no downside?

What are the odds of that ever happening though? Like I said, it's a crazy theory. Nobody in this country embraces debt. It ranks right up there with being a McDonald's investor and worrying about a new chain of Puff the Magic Dragon restaurants appearing. Hey, I'm just being silly to make a point. Can you imagine? Puff the Magic Dragon? Hahaha!

May 29, 2015
Time: ‘Puff, The Magic Dragon’-Themed Restaurants Might Actually Happen

WTF! I want whatever they're smoking! Am I allowed to say that? Are there children present?

No word on whether these stores or restaurants will open in Colorado or Washington, where marijuana is legal for recreational use.

We can only hope... that there is no stock market bubble, again. Investors love those restaurant stocks. Everyone needs a place to eat! They just aren't making any more restaurants! Buy now or forever be priced out!

Shake Shack! Has both food and housing right in its name! Can't lose! Ever! Unless one bought the stock about three months ago. What's a 50% loss among friends? Opinion: That bubble HR Popnstuf'd.

Infestor Head Games (Musical Tribute)

August 20, 2015
Mutated 'Super Lice' Strike in California and 24 Other States

“They just want to give up,” Wilson said. ““If that bug is crawling around the head and then someone is giving hugs, sharing hairbrushes, or by that person, that bug can transfer like that.”



What? You thought I was referring to today's stock market activity? Well, I kind of am. How am I going to shop at the local mall if I am afraid to leave the house?

Big man like me shouldn't be afraid of tiny mutated 'super lice' you say? I should hang out by the McDonald's ball crawl to prove my bravery? F%^k that! Hahaha! Sigh.

New Airline Travel Class Coming Soon!

First Class

Designed for the sophisticated customer, who has money to burn. It's an experience second to none!

Business Class

Designed for the business traveler, whose company has money to burn. It's an experience better than most!

Economy Class

Designed for the family customer, who barely has money for Disneyland. It's a hellish experience that will hopefully soon be forgotten!

Freight Class

Designed for the mostly spherical customer, who spent all his money at McDonald's. It's the most basic "just get me there, no questions asked" experience.

August 12, 2015
This airline is going to start weighing passengers before flight

Passengers will be asked to proceed through a weighing machine in the departure gate zone.

The Crock of @#$% Report v.024

August 6, 2015
McDonald's cuts 225 jobs in push to revive business

NEW YORK (AP) -- McDonald's says it is cutting about 225 corporate jobs as part of a push intended to revitalize its flagging business.

1. I know this may seem hard to believe, but I have never picked a restaurant to dine at based on the number of employees it had at its corporate headquarters.

2. On the one hand, if the typical employee at its corporate headquarters is making bad decisions, then reducing the number of them could reduce the damage they are doing. I'll give you that. However, that in and of itself, cannot revitalize the flagging business. It would simply slow its decline into the abyss.

3. On the other hand, if the typical employee at its corporate headquarters is actually making good decisions, then reducing the number of them will also reduce the number of good decisions that are made. This would accelerate its decline into the abyss.

4. Has McDonald's not been paying attention to what that whiz kid genius Lampert over at Sears has been doing to revitalize its flagging business? It's starting to look like the same f%^king game plan!

Nothing but Premium Products for the Fanboys!

What happens when you serve McDonald's to some food experts and pretend it's a new organic meal?



It's apparently the same thing that happens when you serve up Android to Apple fans and pretend it's iOS 9! Hahaha!!

General Tso's Chicken

August 2, 2015
Final Caixin China PMI for July surprises by dropping to two-year low

"The downturn in China's manufacturing sector intensified at the start of the third quarter. Renewed falls in both total new work and new export orders led manufacturers to cut production at the fastest rate since November 2011," the news release said.

General Tso was last seen cowering under his military tank, mumbling something about possible broken prosperity promises to more than a billion people.

"The weakness of numbers like the PMI does suggest that [the China economy] is having a very hard time turning around," Donna Kwok, senior China economist at UBS, told CNBC.

Can China mustard the energy to ketchup to its potential growth rate? Or is the potential growth rate just one big missed steak? In any event, China's central planners have little margarine for error.

Food for thought.

P.S. If you like food puns, I aim to peas. Otherwise, sorry to a salt you.

Practical Advice for Restaurateurs

July 27, 2015
These 2 unlikely fast food restaurants are killing the rest of the industry

"It's been a process," Arby's CEO Paul Brown told Business Insider in February.

...

"We're in a unique position because consumers perceive our food as high-quality, but we are routinely priced below fast-casual competitors," Brown said.

1. Give consumers what they want! Condiment lipstick on the "processed" pig!

Burger King also doubled down on its marketing strategy to appeal to young and cash-strapped customers.

2. Never underestimate the resiliency of American consumers! Unless of course, you know they are cash-strapped, and you see an opportunity to double down on their misfortune.

This Country Needs More Unsophisticated Investors

July 25, 2015
For novice restaurateurs, risk of failure is high

“It's generally not the kind of economic investment for a sophisticated investor just because there is such a high failure rate for these kinds of ventures.”

How else can we continue to sustainably grow our thriving service economy now that the Fed has permanently put an end to all future recessions?