💰 Big Promises, Same Receipt

THE MAIN EVENTBig Promises, Same Receipt 🧾

Two summers ago, a presidential candidate stood behind a table stacked with meat, milk, and eggs and made a promise. “When I win, I will immediately bring prices down, starting on Day One.”

Eighteen months later, groceries are up another 3.3%. Of the six grocery aisles the government tracks, exactly one is cheaper than in January 2025. Dairy. By 0.3%.

Now, New York's mayor is rolling out the other party's version of the same play. Five city-owned grocery stores, selling produce, meat, and seafood at 30% off.

Here's the problem: we've already run that experiment.

The federal government operates 235 discount grocery stores today (military commissaries), and they deliver almost exactly Mamdani's target, roughly 25% savings.

The catch? It takes about $1.4 billion a year from Congress, around 30 cents of subsidy per dollar sold. The discount is real. The savings aren't. The bill just moves from the register to the taxpayer.

But set the politics aside, because politics is the least interesting part. When both parties converge on the same promise, it tells you something. Few things move American wallets, or ballots, like groceries.

So why can't anyone deliver? Three reasons.

Reason 1: You're Barely Paying For The Food 💵

Let's break down the average dollar you hand the cashier.

1. About 19 cents makes it back to a farm, per the USDA's official accounting.

2. About 1 cent is the store's profit. Don't take anyone's word for it. Kroger, America's largest pure grocer, sold $147.6 billion of groceries last year and reported $1.0 billion in net earnings. That's under a penny per dollar.

3. The other 80 cents feeds the machine in between. Processing, packaging, trucking, warehousing, labor.

That machine is what got expensive. Since 2020...

• Diesel +71%

• Fertilizer +134%

• Long-haul trucking +44%

• Warehousing +53%

• Food-factory wages +34%

In fact, since January 2025, farm prices have fallen 0.7%. Yet shelf prices rose 3.3%. Farmers are holding their end down, but they only control 19 cents of your dollar. The other 81 cents inflated right past them.

What about “corporate greed?”

The FTC found grocery markups rose from 5.6% to 7.0% of revenue after the pandemic.

So picture the cart that cost you $100 in 2020. Today it runs about $132. If stores gave back every point of that markup increase, you'd save roughly $1.85.

The rest isn't sitting in anyone's pocket. It was spent on diesel, fertilizer, and paychecks somewhere between the field and your cart.

Nobody in the chain has a 30% cushion to give back.

Reason 2: Nature Sets The Big Prices 🐄

Zoom in on the three biggest price moves lately, and you’ll notice who's actually in charge.

• 🥩 Beef, +24% since January 2025. The US cattle herd is the smallest it's been since 1951. Rebuilding it makes prices worse before better, because a calf takes about two years to reach market weight. Plus, every heifer a rancher holds back to breed is a cow that doesn't become burgers.

• ☕ Coffee, +33%. America only grows about 1% of the coffee it drinks, so your morning cup is priced in Brazilian weather.

• 🥚 Eggs, −56%. The one true grocery collapse of the past 18 months. The cause wasn't a policy. Bird flu ended, flocks recovered. What fell, fell on its own.

Herds, weather, and disease don't take orders from Washington. Or Gracie Mansion.

Reason 3: These Fixes Have Already Failed 🧪

The tools politicians hold have all been tested.

• Discounts by decree. Nixon froze prices in the 1970s. Ranchers held cattle off the market, hatcheries destroyed chicks, and shelves emptied. All that disruption bought almost no price benefit.

• Discounts by ownership.

  • Baldwin, Florida closed its municipal market in 2024 after years of losses, with zero competitors in town.

  • Erie, Kansas's mayor put it best. “We had one profitable month, and then after that, we were bleeding.”

• Only oversupply has ever worked. Annual grocery prices have fallen exactly twice since 1967, in 2016 and 2017, thanks to an oversupply of beef, eggs, and dairy.

Change The Scoreboard 💡

Michigan State food economist David Ortega puts it bluntly. “People want grocery prices to get down to pre-COVID levels, and that's just not going to happen.”

The realistic goal isn't falling prices. It's prices that rise slower than your paycheck.

• 2026 grocery inflation is running just 1.1%. Against a 3 to 4% raise, your food bill shrinks the only way it ever does, as a share of your income.

• That's the long American story. Groceries took about 14 cents of every take-home dollar back in 1960. Today, it’s under a nickel.

So the next time a politician promises cheaper groceries, remember the factors that dictate your bill. None of them are running for office.

Now you tell me 👇

MARKET MOODMemory Wins, Optics Pay The Bill 💾

Winners

MarineMax ($HZO) - Market Cap: $1.1B (Week-to-Date: +45.9%)

Blackstone already owns Safe Harbor Marinas, the world's largest marina operator. Now it's buying MarineMax, America's biggest boat dealer, for $53 a share. The deal puts the place you buy the boat and the place you park it under one roof. MarineMax's board approved it unanimously, and the stock leapt straight up to the offer price.

Sandisk ($SNDK) - Market Cap: $223.1B (Week-to-Date: +26.1%)

Sandisk makes the flash memory chips that store AI's data, and there is not enough to go around. Quarterly revenue just hit ~$9 billion, more than quadruple a year ago. The demand is so far ahead of supply that even rivals Micron, Western Digital, and Seagate surged alongside it. Shortages are painful everywhere except the seller's income statement.

Workday ($WDAY) - Market Cap: $51.0B (Week-to-Date: +14.9%)

Workday sells HR and payroll software to big companies, which makes it exactly the kind of business AI was supposed to disrupt. But Wall Street just changed its mind. Wells Fargo now says today's software giants will win in a hybrid AI world. They argue that companies would rather buy AI features inside their existing software than replace the systems entirely.

Losers

Resideo ($REZI) - Market Cap: $3.1B (Week-to-Date: -21.5%)

Resideo makes the gear on your walls, from Honeywell Home thermostats to First Alert smoke alarms. It just spun off its distribution arm, and the market didn't love what's left: less than half the revenue of the old combined company, with a heavier debt load. Despite beating expectations this quarter, investors decided a smaller business deserves a smaller price.

Tapestry ($TPR) - Market Cap: $25.9B (Week-to-Date: -20.9%)

Tapestry is the parent company of Coach and Kate Spade, two brands moving in opposite directions. Last quarter Coach grew 14% while Kate Spade shrank 7%. Next year's forecast disappointed a stock priced for growth, and the CEO conceded the Kate Spade turnaround has been slower than planned.

Coherent ($COHR) - Market Cap: $64.0B (Week-to-Date: -13.7%)

The same wave that lifted Sandisk knocked Coherent down. Coherent sells the laser optics that shuttle data between AI chips, but memory is the AI part in shortest supply right now, so that's where the pricing power is. Chasing it costs money, and traders raised that money by selling the neighboring trade. An earnings beat didn't help, since next quarter's profit margins may be thinner than expected.

CHART OF THE WEEKBoomers Are Breaking The Jobs Data 🧓

On paper, America's workforce is vanishing. Labor participation just fell to 61.4%, the lowest outside of Covid in 50 years.

That green line looks like a recession warning, but the blue line is why it isn't.

Prime-age participation hasn't budged since January 2024. A small slice of the drop is young people staying in school longer, but the bulk of the move is a retirement wave (not a layoff wave).

More than 11,000 boomers turn 65 every day through 2027, and only 1 in 5 Americans over 65 keeps working.

That one detail changes how to read everything downstream:

• Jobs reports will keep looking weak even in a healthy economy. The BLS expects labor participation to keep drifting lower through 2034.

• The Fed has a harder job now. Weak hiring used to mean the economy needed help. But when the pool of job seekers is shrinking too, a small month of hiring can still be enough for everyone looking.

• Fewer workers per retiree is the same story behind rising wages, Social Security's shortfall, and the rush to automate.

So when the next jobs report looks ugly, check the blue line before falling for a doomsday headline.

FAST FACTSScams, Shams, And Savings Plans 🚨

⚖️ "Jury Duty" Cost $25,000: Fake deputies convinced a Tampa woman she had missed jury duty, then kept her on the phone until her savings were gone. [Read]

🚗 Auto Insurers Deny Nearly Half Of Injury Claims: Insurers closed 45% of auto injury claims last year without paying a dime, up from 35% a decade ago. [Read]

💵 How To Save $5,000 In 6 Months: It breaks down to just $28 a day, yet a third of Americans still have no emergency savings at all. [Read]

🎓 Grad Students Hit A Borrowing Wall: New federal loan caps leave a tuition gap for roughly 440,000 students a year, but private lenders are happy to fill it. [Read]

🌉 San Francisco Rent Reclaims The Crown: The AI boom pushed average asking rent to $3,728 a month, past New York for the first time since 2019. [Read]

🏢 Condo Fees Are About To Jump: New Fannie and Freddie rules will force associations to set aside 50% more in reserves, and owners will foot the bill. [Read]

📈 Earnings Season Doubled Expectations: With most of the S&P 500 reported, profits are growing 47% versus the 24% analysts penciled in this spring. [Read]

🏦 Berkshire Is Buying Again: Greg Abel bought $23.5 billion of stocks last quarter, ending a 14-quarter selling streak that Buffett himself never broke. [Read]

WORDS TO REMEMBERLet Time Do The Heavy Lifting 🧠