He started DoubleLine Capital and is known as the “bond king,” Jeffrey Gundlach. He saw an ad that made him think the economy isn’t doing well.
Cousin Eddie (Randy Quaid) says, “I don’t know why they call it Hamburger Helper, it does just fine by itself.” This scene is well known to people who grew up in the 1980s.
The product has been around since the 1970s. Eagle Family Food Group bought it from General Mills for $610 million in 2022, along with the Suddenly Salad business.
The two companies made a total of $235 million in sales in 2021. However, Eagle Foods, which is owned by the private equity firm Kelso & Company, is working to bring the name back to life. This year, the Cleveland company brought back Lefty, the Hamburger Helper’s glove character.
So what Gundlach saw is less of an economic sign and more of a sign of a private-equity-backed company trying to grow so that it can sell or go public in the future.
Another thing he might be wrong about is the business. He could have learnt this from his coworkers. Andrew Hsu and Michael Fine of DoubleLine looked at asset-backed securities for information on the health of the U.S. consumer in a study released in September.
Based on DoubleLine’s own personal loan statistics, collateral for asset-backed securities from the years 2023 and 2024 is losing less than collateral from the years 2022 and 2021. Mortgage delinquencies have stayed low for a while now, which suggests that homeowners are in a pretty good position. However, credit card and auto loan delinquencies have been going up.
“Consumer resilience is likely boosted by the robust housing mortgage market, a strong job market, and the extra savings that people built up during the pandemic,” they said. They were aware of the risks, such as the fact that funds would be lost, wages would stay the same, unemployment would rise, and prices would stay high.
