Wednesday, May 20, 2009

14 TRILLION . . . CALORIES

When financially-oriented souls think of the number 14 trillion, they usually think of U. S. GDP. They may also with good reason think of it as the stated Federal deficit plus the amount pledged to support what's left of the financial system.

However, another estimate of the importance of 14 trillion is the number of calories Americans would need to shed in order to get to some semblance of normal weight.

This number can be estimated as follows. 300 M Americans X 15 lbs overweight (or more) X 3500 calories/pound gets one there, plus a little for good measure.

What does this number have to do with an economics post?

Think of the outperformance of McDonald's vs. Wal-Mart. McDonald's stock is the best performer of the Dow 30 over the past 24 months, having returned about 10% in that time frame. Wal-Mart sells what are arguably more necessary items than MCD, yet its stock price keeps eroding. Today, MCD got a lift because an analyst touted the rollout of its premium espresso/cappuccino line.

It would seem that despite a poor economy, Americans are more hooked on junk food and sugary coffee drinks than on the low-margined necessities that Wal-Mart sells.


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