Water storage in California is at critically low levels, according to reports from the U.S. Drought Monitor. At Shasta Lake, located about three hours north of Sacramento, reservoir levels are the lowest they have ever been for the month of April. According to reporting from CNN, snowpack in California was only at 4% of normal levels at the end of April.

In southern California, the Metropolitan Water District (which serves ~19 million people) has asked customers to dramatically cut back their water usage this year.

The drought conditions that have pervaded in the western U.S. in recent years look as if they will intensify this summer, according to the evidence available so far.

It’s good to be a refiner in the United States right now. Public refining companies are starting to report first quarter results, and some of the numbers are staggering.

PBF Energy, an independent petroleum refiner with assets located across the country, reported gross refining margin of $11.36 per barrel in 1Q22, up 3.1x from $3.65 per barrel in the same quarter a year ago.

Similar results are coming in from competitors in refining industry, and stock prices have rallied as a result.

In this chart, we illustrate one version of the crack spread, which is used as a proxy for refining profitability. This particular chart shows the difference between the price of a barrel of diesel (which drives refining revenue) and the price of a barrel of crude oil (the main refining input cost).

Diesel crack spreads, now above $60 per barrel, are easily at their highest levels of all time.

Originally written May 11th, 2022.

Getting a job after college isn’t easy. Data from the Federal Reserve as of February 2022 shows a wide range in early career salaries and unemployment rates, when looking at the population according to their college major.

Engineers, on average, appear to earn higher starting salaries (~66,600) than their peers in other fields (~43,800), a difference of ~52%. However, even engineers are not immune to the unemployment difficulties facing recent grads. Around half of the engineering majors shown on this chart have unemployment rates higher than the February 2022 national rate (3.8%).

The good news is that those with college degrees in the United States say they are better off for the experience. 70% think that their degrees helped bring them job opportunities, according to October 2021 research from Pew Research.

What do you think about the post-college job market? Let us know in the comments and follow us on instagram at @initiatingcoverage for more education-related content.

The world population is growing, but at ever slower rates. Global population growth peaked in the 1960s (at just above 2% annually), and has slowed gradually since then to its current rate just above 1% annually.

The United Nations predicts that global population growth will continue its downward trend and eventually reach zero around the year 2100, when the human population of the planet will have reached ~10.9 billion people. The UN’s Population Division, which releases these forecasts, is due to publish its latest revision sometime this year.

The UN has historically proven adept at forecasting global population changes, but they’re not the only group of researchers modeling this figure. The IIASA predicts a population peak much earlier (2070), as does the IHME at the University of Washington (2064).

Let us know what you think about population forecasting in the comments.

The increasing competitiveness of the college application process in the United States has been a consistent trend for decades now. In this chart, we analyze the year-by-year undergraduate admissions rates for a group of selective colleges to better understand this trend over time. As expected, the average admissions rate among the group has moved lower, from 9.5% for the class of 2016 to 5.1% for the class of 2025 (students who will begin their sophomore years this fall).

Also interesting is the clustering in admission rates among this group. For the class of 2016, 10.9 percentage points divided the most selective college (Harvard) from the “least” selective (Cornell). Fast forward to the class of 2026 (with the data we have so far) and this spread has compressed to only 3.7 percentage points.

It’s also worth noting that the trend lower in admission rates does not exist at all U.S. colleges. According to a 2019 study from Pew Research, about 31% of colleges had their admit rates actually go up from 2002-2017.

Let us know what you think in the comments.

Americans don’t go to many movies anymore. In this graphic, we analyzed data from a December 2021 Gallup poll which asked a representative sample of 811 adults in all 50 states and D.C. about their moviegoing habits over the past year.

For the first time in the history of the survey (the same survey had been run sixteen times before, going back to the early 1990s), the median number of movies attended over the previous twelve months was “zero”. The mean response also touched a new low, at 1.4 movies.

AMC shares up 88% since the end of 2019, but does the underlying fundamental data support this repricing? Let us know what you think.

The big tech names have not had a great start to 2022. Netflix, for example, has seen its stock price drop 70% since the beginning of the year, while Meta (down 40%) and Amazon (down 33%) have been close behind.

Tesla shares have gotten punished this year too (down 29%), but the company still stands well apart from its tech peers when evaluated on revenue multiple basis.

In this chart, we illustrate revenue multiples (EV/LTM Revenue) for the FAANG stocks plus Tesla on a quarterly basis since 4Q18. As the chart shows, Tesla underwent a dramatic transformation in the market’s eyes from 2019 to 2020, improving from a valuation of 2.3x revenue in 3Q19 to 25.8x revenue in 4Q20.

We’ve written before about the relative outperformance within the airline industry of low-cost carriers (like Spirit, Frontier, and Allegiant) during the economically-challenging stretch of the pandemic.

In this analysis, we revisit the airlines to look at how customer satisfaction compares to unit revenue on an airline-by-airline basis. We use TRASM (total revenue per available seat mile) to measure unit revenue at the airlines, which serves as a rough estimate for how “expensive” each carrier is. Ultimately, it looks like you get what you pay for with airline travel.

The more expensive carriers report much higher satisfaction levels than the low-cast carriers, overall. However, the operator with the highest customer satisfaction (JetBlue) landed right in the middle of the group in terms of unit revenue.

France is the undisputed champion when it comes to Michelin-starred restaurants. In this graphic, we show the top ten countries in the world arranged by total number of Michelin-starred restaurants, according to data from the 2021 Michelin Guide. France is a remarkable 52% ahead of second-place finisher Japan, though the United States claims the highest percentage of 3-star restaurants among its portfolio of starred restaurants.

Amazon may have had a bad quarter (AMZN stock is down 14% since 1Q22 earnings were reported on April 28th), but the company’s advertising budget is showing no signs of slowing down. From 2017 to 2021, the company’s global ad spending has exploded to $16.9 billion from $6.3 billion, making it (likely) the largest ad buyer of all time, which should be confirmed once peers in the consumer products space (P&G, L’Oréal, Samsung, Unliever, etc.) release their figures for this year.