Jeffrey Gundlach, the investor who founded DoubleLine Capital and is best known as the bond king, saw an ad that made him think the economy is not doing well.
Those who grew up in the 1980s remember the scene in National Lampoon’s Vacation where cousin Eddie (Randy Quaid) says, “I don’t know why they call it Hamburger Helper, it does just fine on its own.”
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The product, which dates back to the 1970s, was acquired by Eagle Family Food Group from General Mills in 2022 for $610 million, during which it also received the Suddenly Salad business.
The two companies had 2021 sales of $235 million, but Eagle Foods, owned by private equity firm Kelso & Company, is trying to revive the brand. This year, the Cleveland company reintroduced the Hamburger Helper’s glove mascot, Lefty.
So what Gundlach noted is less an economic indicator and more a sign that a private equity-fueled company is trying to boost growth for a sale or IPO down the road.
Perhaps he was also wrong about economics, which he could have learned from his colleagues. DoubleLine’s Andrew Hsu and Michael Fine examined asset-backed securities on U.S. consumer health data in a September report.
DoubleLine’s proprietary personal lending data shows that asset-backed collateral from years 2023 and 2024 has better loss performance than years 2022 and 2021. Continued low mortgage delinquencies indicate homeowners are in a relatively strong position , although they note that credit card delinquencies have increased, as have car loan delinquencies.
“Consumer resilience is likely fueled by the strength of the residential mortgage market, a robust labor market and excess savings built up during the pandemic,” they concluded. They did acknowledge risks, including the depletion of savings, wage stagnation, rising unemployment and persistently high prices.
