Kenneth Ballenegger

Willy Staley on how McDonald’s essentially transformed being in the restaurant market into being in the commodities’ futures trading market:

At this volume, and with the impermanence of the sandwich, it only makes sense for McDonald’s to treat the sandwich as a sort of arbitrage strategy: at both ends of the product pipeline, you have a good being traded at such large volume that we might as well forget that one end of the pipeline is hogs and corn and the other end is a sandwich. McDonald’s likely doesn’t think in these terms, and neither should you.

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And unlike a Low Country barbecue shack, McDonalds has the means to circumvent—or disregard—supply and demand problems. Indeed, they behave much more like a risk-averse day trader, waiting to see a spread between an Exchange Traded Fund and its underlying assets—waiting for the ticker to offer up a quick risk-free dollar.