In today’s newsletter I discuss how it’s the economy stupid, Starbucks ISN'T buying Chipotle, the Wu-Tang Clan just dropped “The Disciple: A Wu-Tang Fable” on Netflix, Reese Witherspoon is buying back her production company Hello Sunshine on the cheap, Ben Affleck is pretty popular in Hollywood these days after selling his AI company to Netflix, American homeowners are sitting on a massive pile of wealth, Elon Musk has decided he’s renaming his “SpaceXAI” to “SpaceXSI”, the Wu-tang Clan is dropping The Disciple: A Wu-Tang Fable on Netflix tonight, kids are moving back in with their parents to save money so they can daytrade AI stocks using margin, and the Walt Disney Company announced it will be streaming the upcoming Super Bowl LX on Disney+.

Let’s get into it!

If you turn on the financial news these days you’ll likely hear everything is going gangbusters in the U.S. economy. Talking heads point to a massive $32.56 trillion dollars GDP that’s growing at a +2.2% annualized rate as of Q2 2026, a booming stock market valued at over $75.3 trillion dollars, and a consumer that just keeps on spending seemingly no matter what happens. But this market exuberance ignores what’s really going on just beneath the surface. I’m talking about the K-shaped economy, and contrary to what some might say it’s not dead. It’s just getting started. Let’s get into it.

The headlines are filled with reports of new investments in factories and corporate cash piles so big Scrooge McDuck could swim in them, yet everyday working families are battling compounding living costs that are adding up to a record $1.14 trillion dollars in high interest credit card debt just to get by. Meanwhile, the small businesses that employ roughly 46.5% of America's workforce, and who you can thank for keeping your local community running, are getting squeezed by sky high borrowing costs. To understand what’s really going on with our economy, you have to look past the rosy Wall Street figures and examine the real economic pressures that are affecting families who are sitting at the kitchen table wondering if they can afford to continue to put food on the table.

Let’s start with the much talked about and cheered revitalization of American manufacturing. Some political parties claim that aggressive tariffs can single handedly transform this country’s factories. I’m all for growing manufacturing in the U.S., but I’m skeptical that taxing the American people, which is exactly what tariffs are, is the best way to do it. The way the current tariffs have been implemented has been haphazard and are now acting as a regressive national sales tax paid at the checkout counter by the very consumers who increasingly are struggling to put food on their tables. No foreign governments are paying these tariffs, just like Mexico didn’t pay for any wall. When U.S. manufacturers are forced to pay higher prices for imported parts and raw materials they have no other choice than to pass those costs down to U.S. consumers. The actual driver of the recent domestic construction and manufacturing boom is not just U.S. protectionism, but rather targeted public investments that stimulate the economy and lead to broader prosperity. Take for example the CHIPS and Science Act, which injected $52.7 billion dollars directly into domestic semiconductor manufacturing, or the Bipartisan Infrastructure Law passed in 2021 that directed $1.2 trillion dollars into rebuilding American supply chains and physical infrastructure. The Inflation Reduction Act dedicated another $391 billion dollars toward energy and climate provisions. These kinds of government spending initiatives are what lead to Intel spending $20 billion dollars to build new factories in Ohio. Tariffs haven’t led any U.S. companies to turn around and say “I know we’re losing billions of dollars to tariffs, but now seems like a great time to build a new factory.”

Are you picking up on my sarcasm? Because I’m laying it on pretty thick!

Crediting tariffs for this growth is wrong, and it ignores the bipartisan public investments that have led to the current AI boom and the stock market making all new highs, which I know that “the stock market isn’t the economy”, but it’s hard to ignore the discrepancy in prosperity of U.S. investors in the face of tariffs and rising prices on nearly everything.

The financial press, and I’m talking about the CNBCs and Wall Street Journals of the world, love to point out how resilient consumer spending has been as some kind of proof that everyday people are thriving. They’re not. They’re just getting by…barely. When analysts report high volumes of foot traffic and sales at discount chain stores they label spending by middle and lower-income consumers as strong, but Americans aren’t rushing to mindlessly spend their money. They’re looking for a deal. They’ve used up their disposable income, and now they’re making financial choices of whether to buy no-name shoes for Junior or pay their rent on time. They’re starting to feel the impact of years of compounding price increases that have eroded their purchasing power. Their Covid-era savings are gone. Today’s consumers are financing daily necessities with expensive debt. Total household debt has reached an insane $18.8 trillion dollars. Credit card balances in the U.S. have surged to $1.26 trillion dollars. Auto loan debt has exceeded $1.71 trillion dollars. These are huge numbers that can’t be ignored. We’re seeing credit card and auto loan delinquencies creep up to alarming levels. I mean I’m alarmed, and I write about this stuff all the time. Aren’t you worried? Well I think you should be. Working families aren’t spending more because they’ve got disposable income. They’re swiping their credit cards that have 23.96% interest rates because they have no other way to pay for their family’s food. They’re just trying to maintain their basic standard of living, but the press would have you believe they’re out at the malls spending freely because everything is peachy.

The debt levels of Wall Street companies can also shed light on the economic foundation of our economy. While it’s true that some of the biggest tech companies in the U.S. have easy access to capital with near zero interest rates that they locked in years ago, the small and mid-sized companies that actually employ nearly half of the American workforce are being squeezed. The corporate debt market in the U.S. has just swelled to over $13 trillion dollars, with the average interest being charged to these companies sitting at around 5.97%. A mid-sized U.S. manufacturing company that is forced to refinance a $50 million dollars loan in this financial environment is going to face skyrocketing interest payments which will force them to stop hiring, or even worse cause them to begin laying off the very American workers that the government is telling them that tariffs will help revitalize the manufacturing sector in the U.S.

It’s great to celebrate a booming stock market, but the AI boom doesn’t lift all ships in this economy. A growing GDP is good news, but it masks the K-shaped economy that is leaving lower and middle-income households facing rising costs, falling real wages, and in financial distress while financial talking heads tout rosy topline economic numbers that don’t mean much without context. The top 10% of Americans now hold roughly $44 trillion dollars in stock market wealth, while the average American household has less than $500 dollars that they could use in an emergency. The median home price in the U.S. is now hovering around $420,000 dollars, which puts it firmly out of reach financially for young people just out of school and entering the workforce. There’s no doubt that the U.S. economy is massive, and that it’s been resilient in the face of previous economic turmoil, but we’re now facing a divergence in the economy that ups the stakes of tipping into a recession if all Americans aren’t equally lifted up by the rising economic tide.

It turns out burritos and coffee don’t go well together, although I beg to differ. Starbucks has decided not to submit an offer to acquire Chipotle, as was rumored and I wrote about last week. Can’t say I’m sorry, as the deal didn’t make a lot of sense amid Starbucks' turnaround story, but Chipotle’s growth is hard to ignore. I’m guessing this won’t be the last Chipotle acquisition rumor we hear.

Reese Witherspoon is buying back her production company Hello Sunshine from Candle Media, which she originally sold to the company for $900 million dollars back in August 2021. She’s partnering with the French studio Mediawan to buy back the entire company. The repurchased Hello Sunshine will allow Reese Witherspoon execute on a creator-first philosophy that better matches her own vision for telling stories as distribution models and streaming economics evolve. It’s also rumored she was able to buy back Hello Sunshine for a fraction of the $900 million dollars she got when she sold it, with some industry experts suggesting it was for less than $99 million dollars. That’s a pretty big number for Candle Media to write off. I’d watch a movie about Reese Witherspoon’s deal to sell and then repurchase Hello Sunshine. Think they’ll make a movie about it?

Ben Affleck is pretty popular in Hollywood these days, except it’s for his AI chops and not his acting. Earlier this year in March 2026 Netflix bought Ben Affleck’s AI startup InterPositive for $587 million dollars. Netflix even let him stick around after appointing him as a senior advisor, not that he needs the money these days.

American homeowners are sitting on a massive pile of wealth in the form of the homes they own, and they’re refusing to spend it. The total accumulated home equity held by U.S. homeowners with a mortgage hit a record of $17.9 trillion dollars. With property values climbing so quickly, the average home owner holds around $310,000 dollars in home equity. According to economist Thom Malone most homeowners have low interest rates on their home’s mortgages and they see no reason to borrow anymore money. I’m guessing they’re sleeping pretty good at night with all that equity over their heads.

Last week I wrote about how President Donald Trump on a whim decided he alone could rebrand “Artificial Intelligence” as “Super Intelligence” all on his own without asking anyone in the AI industry, who presumably knows what they’re talking about, if it was a good idea. Now one of President Donald Trump’s favorite Yes Men, Elon Musk, has decided he’s renaming his “SpaceXAI” to “SpaceXSI.”

While you'll never get me to say “Super Intelligence” with a straight face, I will heretofore refer to ElonMusk’s AI division as “SpaceXSI”.

That hurts just saying it.

Everyone that knows me knows I’m a huge Wu-Tang Clan fan. I’ve seen them a bunch of times in concert, as well as seeing some of the individual member’s own concerts including my claim to fame where I was shoved by Method Man after a concert he did with Redman at Vassar College back on November 17, 1995.

I’m definitely checking for this new new movie from the Wu-tang Clan called
The Disciple: A Wu-Tang Fable when it drops on Netflix tonight!

Having lived through my fair share of market bubbles, and having been a daytrader on-and-off over the last 30 years, you just know we’re in a bubble when kids are moving back in with their parents to save money so they can daytrade AI stocks using margin on platforms like Robinhood and Webull. I’ve seen this movie before, as well as starred in it metaphorically speaking, and believe me when I say it doesn’t end well.

The Walt Disney Company announced it will be streaming the upcoming Super Bowl LX on Disney+ alongside ESPN and ABC. Disney paid $2.7 billion dollars for an 11-year media rights contract to broadcast the Super Bowl that runs through the 2033 NFL season. They’re expecting a record audience of over 127.7 million U.S. TV viewers, with some predicting viewership could even exceed 200 million views. I’m skeptical of that number, but I agree viewership is definitely growing for the Super Bowl. Disney has completely sold out of all ad spaces, with some brands paying as much as $10 million dollars for a 30 second spot. For that price, Disney better hope they get a record number of viewers.

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The Business Behind The News is written, edited, and published by Chris Thompson.