August 30th, 2025 - August is Over!

Steve and Adam Van We, along with Joey Loss, discussed the market analysis, highlighting that August ended positively despite a few economic headwinds and the mixed data surrounding the market performance. They emphasized the resilience of the economy with factors such as improving manufacturing, balanced employment conditions, and a strong consumer base, despite higher costs. The session also included discussions on topics such as long-term care insurance proposals, potential British population decline, and insights into the history of the furniture industry, illustrating the ongoing trends and challenges in the economic and financial sectors.

Transcript

Steve Van We 0:00

It's Saturday morning. It's 10 o'. Clock. This is the Ban we Financial hour. I'm Steve Ban We.

Adam Van We 0:05

And I'm Adam Van We.

Joey Loss 0:06

And I'm Joey Loss.

Steve Van We 0:07

And that third voice you hear means that Joey's not a father of two yet. But it could happen any day. You might get called in the middle of the show and says, come home. You never know. Not technically do, but how those things happen. I don't remember being asked in any of our three exactly what day we wanted to do it, although we sort of did because Sarah was induced once. But anyway, I digress. Here we are as usual on Saturday morning. But it's a very special Saturday morning. As I told Adam right before the show, the long national nightmare is over. College football is back.

Adam Van We 0:44

Thank goodness it's.

Steve Van We 0:46

And I. I also brought up Marco Rubio made a suggestion yesterday. He says what we need is a an executive order that bans weddings during college football season Saturdays. And I think he's going to get it.

Adam Van We 1:02

Yeah, yeah, maybe it's not a bad idea.

Steve Van We 1:05

No, 8020, that 80 is very powerful. So we'll see. Anyway, I digress. Again, it's really easy, especially when things are happening all around you. Anyway, for all of the regulars, thanks so much for always being there. You keep showing up, we keep showing up. That's the way it goes for new people. If you're just happening on us or been told about it, please try to stick around for the hour. We will inevitably touch upon something that you didn't know. And if you want to join the conversation today, just pick up the phone and dial 904-222-8255.

Steve Van We 1:45

The rules for these past 11 years and change have been the same. Callers get put directly to the top. You are the most important out there. That's why we do live radio. That's what makes it interesting. So don't be afraid to do it. We will have, as always, a trivia question right after the first break and then we'll just see what goes on from there without any further time spent. Let's go right to I. I'll give a quick my own quick scenario it. The week kind of ended with a little thud tiny. But it sure was a good month. Yep.

Adam Van We 2:24

And anytime you can exit August with a positive month, I will take that. I consider it a win. The market held up really well in the face. It had a few headwinds during the month and it still held up really well. We saw the Fed speaking at Jackson Hole. That always causes volatility. No matter what he says or when he says it, it's gonna cause some volatility. We have more or less MI I would call mixed economic data. I do see some signs of improvement in that data, but still pretty mixed. And then just from a seasonal perspective, August tends to be not a great month. But we, we did get out with a positive number. So I'll take

Steve Van We 2:27

Absolutely.

Adam Van We 3:04

was a really small drop. We. We saw the Nasdaq for the month. We saw the NASDAQ up 1.6%, saw the S&P rise 1.9% and the Dow actually led the way higher up 3.2%. I don't say that very often. Recently, not recently. For the whole quarter, the numbers look even better. Dow's up 3.3s and Ps up 4.1. Nasdaq is up 5.3. Unfortunately, this leads us to September. That's historically the weakest month of the year. And so who, who knows what'll happen, but buckle up, it'll be interesting. Remember coming out of the tariff tantrum way back in April when the VIX spiked and volatility was rocking the markets? If you look at the rate of change in the vix, the decline we've seen since April is the third highest on record behind. I bet you could guess what those two events are. The COVID crash and the financial crisis. Throughout history, these types of declines have all come at the beginning of market rallies. That's right, the beginning of market rallies. I'm not saying that's what's going to happen next. As lately we've seen a few historical patterns that are broken, but this is not necessarily bad news to see a record decline in the VIX like that. If you're wondering what pattern that has been broken recently, the one I was referring to is the yield curve. Having a hundred percent track record of predicting recessions. Now, we did see a recession. They won't call it a recession, but there was two consecutive months of quarters of GDP shrinkage back during under Biden. But for some reason the governing body that calls recessions said that wasn't a recession.

Steve Van We 4:42

The reason's obvious. It was a political move, nothing else.

Adam Van We 4:46

Yeah. Anyways, there is technically this. This inverted yield curve has not correctly predicted a recession. So that you never know with data and historical patterns if they'll hold. But this is one that I'm really interested to see if it does. If it does, we're going to be looking at some really outsized returns in the next few years. So that would that would be exciting to everyone at this table. Earnings season for quarter two pretty much now complete. Nvidia reported this past Wednesday. And that kind of wrapped it up. It was a pretty amazing season with 72% of companies beating their earnings targets while 74% beat on sales forecasts. Rarely do you see a higher beat rate on sales than on earnings. That's somewhat of an anomaly.

Steve Van We 5:30

I honestly don't remember last time. And we've been reporting this for years.

Adam Van We 5:31

I don't either.

Adam Van We 5:34

Definitely.

Joey Loss 5:35

Does that reflect investment in AI?

Adam Van We 5:37

I. I honestly, I don't know.

Joey Loss 5:39

Sales are up, but profits are down. And we know there's a ton.

Steve Van We 5:42

It could.

Adam Van We 5:43

But you could make the argument that maybe tariffs caused it too.

Joey Loss 5:46

It makes me feel smart to say it on the radio.

Steve Van We 5:48

Yeah, you should.

Adam Van We 5:49

Yeah. I mean, if you're paying more for goods that are coming in, you have to mark your prices up, but maybe you're eating some of the cost.

Joey Loss 5:56

Yeah, that's, that's a good point. Probably more of it, to be honest.

Adam Van We 5:57

Yeah. I don't know. You rarely even see a sales beat rate in the 70s, so that was a just an outstanding season. But that's not even the best part about the numbers. The best part is that 13% of companies raised their guidance during the quarter versus 5% that lowered. That's huge for everyone saying that, that PE ratios are high, that the market's overvalued. Well, when you see 13% of companies raising their forward guidance, they, that can help with that because it makes those discounted cash flows look, look better and therefore PE ratios come down. So that's great news for the rest of this year and beyond. I mentioned Nvidia released their second quarter earnings. They were really nothing short of remarkable. They beat their earnings target by 4% and revenue was 1% higher than expected. Data data center revenue was 56% higher than one year ago today. They did all this despite $0 in sales to China in the second quarter. So no, no revenue to China whatsoever. They announced a $60 billion share buyback, a strong signal that they believe their company stock is fairly valued and that they are printing so much cash right now, they don't know what to do with it all. But that's what happens when you have a 72.2%

Adam Van We 7:16

adjusted gross margin. Yeah. Can you imagine if an oil company had a 72.2% adjusted gross margin? Every Democrat in Washington would be attacking them for. For crazy profits or being too profitable. But Nvidia does it quarter over quarter over quarter. Pretty insane.

Steve Van We 7:38

I remember when Microsoft and Apple were putting up those gross margins in the 50 to 60% range and the world was absolutely appalled, except for the people who weren't. And you could put them right down.

Adam Van We 7:53

The middle to windfall. Windfall profits. That's what they called it when Exxon had a good.

Steve Van We 7:57

Exactly. Same. Same people. Exactly. Yeah. It certainly does not look like the month of September starting off with a bunch of a headwind to me.

Adam Van We 8:09

Well, let me, I'm going to talk about a little bit about the economic data when we get back because we're running up against a commercial break, but it's interesting you could make that argument.

Steve Van We 8:17

Okay, well, we will do that shortly after a break. We got to pay some bills. We'll come back and we'll talk about the pros and cons of what's going on out there in the economy and then a bunch of other stuff. So don't go anywhere. This is the Benway Financial Hour. Welcome back to the Van We Financial Hour. I'm Steve Van We.

Adam Van We 8:33

I'm Adam Van We.

Joey Loss 8:34

And I'm Joey Loss.

Steve Van We 8:35

And we do. I'll remind you first lines are open. 904-222-8255.

Steve Van We 8:41

And we will have a trivia question as usual, brought to you by Paul Lloyd at First Coast Alarm. You can reach Paul at 904-636-7888.

Steve Van We 8:54

Over the past 10 years, how many S&P 500 stocks have an actual negative, negative annualized return? It's something that I don't think about very often. You think s and P510

Steve Van We 9:11

years with negative return annualized. It just, it doesn't hit me, but it's true. It's a number greater than zero and obviously it's an integer. So anybody who wants to start bracketing it can just pick up the phone and give it a shot. All right. A few more comments on the, the economics surrounding the market.

Adam Van We 9:31

Yeah, I just want to say that generally it looks like economic data is getting better, but there's still pockets that don't look great. I think one of those is manufacturing. It's still soft, but the numbers are improving. And you're, you're starting to see that sector come to life a bit. Employment data suggests a neutral market with job hunters able to find jobs. But it's not as easy as it was a couple of years ago when employers couldn't find anyone to fill roles. That's a good thing. And you don't want those extremes really on either side. You really want a balance of power between employers and employees. And that's kind of what we're seeing right now.

Adam Van We 10:10

When it gets too extreme in either direction, that's when the real problems come up. But even the housing sector is showing some signs of life, although a lot of that is regional. We're just saying that in the Northeast right now you're seeing a pretty high demand for houses actually because there aren't enough on the market. So that low inventory is what's causing some of that improvement in the market. And of course, we look at the national numbers. If you look at the Southeast and the, and Texas and Florida and some of the areas that were super hot during COVID they're not as, they're not as hot as the Northeast is right now. So it really, as usual, housing is very local.

Steve Van We 10:51

I would have thought the Northeast would have a plethora out there because of all the people packing up, moving to Florida.

Adam Van We 10:58

Yeah, well, that's not as been as big of a trend it was for the last four years, but I think that's really kind of slowed down now. I think all the people that really wanted to get out have gotten out. And there's just not as much incentive anymore with, without the draconian COVID lockdown policies in place and things like that, it's. There isn't the incentive to get people to move and uproot their lives as much.

Steve Van We 11:22

And let's face it, Florida isn't that cheap either.

Adam Van We 11:25

No, it was. It is not anymore. It's not like you're selling your million dollar house in New York and buying a $200,000 house here. Now you're buying an $800,000 house here. So it's, it's definitely changed the, the game a bit. The last thing I wanted to mention is inflation. We're not seeing any spike in inflation. It's slightly higher than it was a couple of months ago. Truflation has it hanging around that 2% mark. And it's just not, it's not been a problem. Everyone is worried about it, some more than others, but, but it really hasn't been that big of an issue. And then I actually said lastly. But lastly, the consumer remains fairly resilient despite higher costs of everything. We saw that in, in retailer stocks this quarter. They had a pretty good quarter despite people thinking that the consumer was weak. That is not playing out in the data right now. We're seeing it in retail sales numbers. So people are, despite, they have jobs, they're still spending money. They may not be. The economy is not going crazy. But it is not bad either and I think it's getting a little bit better.

Steve Van We 12:36

I agree. And there's one I wanted to add one little punctuation mark to that. It seems it's a little too early to state this as an absolute, but it seems like maybe we have awakened sleeping midget. Meaning what led the way recently? Small caps. Oh, perhaps we last said that when you were much younger.

Adam Van We 13:01

Yeah. No kidding.

Steve Van We 13:02

Yeah. I think you had kids in diapers last time I reported that.

Adam Van We 13:07

Yeah, that was just a recent thing. Just really this month or this quarter.

Steve Van We 13:11

Yeah. The Russell 2000 small cap index had a 9% month and a 14.5%. Three quarters it wasn't, it technically wasn't a calendar quarter, but for three months up 14 and a half. Still those numbers are exceptional.

Adam Van We 13:27

Still hasn't hit a new all time high from many years ago though, right?

Steve Van We 13:30

That's quite true. But I think it's something that if you're looking to branch out a little bit, if you're looking for some portfolio ideas, I'd start keeping an eye on that because usually when it starts going, if you, if it can crack into that new territory,

Steve Van We 13:46

if you look at the charts over a long, long time, small caps are definitely winners and there is a reason for that. I should also point out they're riskier than large caps, but they also are less dependent on tariffs now because they do most of their operating domestically where there aren't tariffs. So take a look at it. I've been just mentioning that a couple times over the last couple months and now the data's starting to look like.

Joey Loss 14:12

I think, I think, I think your point is true about they do most of their commerce here, but they buy a lot of goods from the problem. So I think that your, your risk case for small caps being higher was perfectly evidenced this year where they were just slammed when they first came on.

Adam Van We 14:25

Really on the, on the, on the perch on the raw materials and good side.

Steve Van We 14:30

Nobody's immune, that's for certain. Yeah. And we'll see what happens. You know, it's, it's nothing if not fluid. But then look, look at what else happened this week. The first read on the second quarter GDP was 3% which was surprising to a lot of people. Not me, but to a lot of people. Well, we got the second read this week and did they do what they generally did in the last administration by knocking it down? No. 3.3%, a 10% improvement.

Adam Van We 15:02

But it gets better, the news gets better when you dig in too because the increases were in personal consumption and business investment. And those two areas are areas you want to see increase it offset downward revisions to government spending, inventories, and net exports. So, I mean, I think that's even better news when you look at the details.

Steve Van We 15:24

And first time unemployment claims fell sharply again. So, yeah, things. A lot of the really big things are looking pretty good to me. Right?

Joey Loss 15:32

Yeah. I mean, that one's hugely important. In the. For the last three years, such a large. A growing portion of GDP was represented by government spending, and we just weren't talking about it. And we're saying, oh, the economy's great. The economy. Well, who's paying for it? It wasn't the consumers. You know, it's good to see it going back towards normal free market activity.

Steve Van We 15:50

Government expenditures have a velocity of about 1.00 in the national economy. It's about two and a half in the private sector. If you want to see the economy grow, shrink government and expand the private sector, and that'll be a really good start. And perhaps we're seeing that trend happen. I loved the fact that Chicken Little was proven wrong again. It went up to 3.3.

Steve Van We 16:18

I look for all these little clues, and once in a while we find something we really like. Here's. I gotta save that one. I need more time on that one. But let's see. How about this one? Trump's naysayers said that if he kept a Michigan coal plant open, it would cost millions of dollars. So the naysayers put the numbers together, and it's called Campbell. The plant is called the Campbell plant in Michigan, and it says it cost them $29 million over five weeks to keep that plant open. They did, however, forget one little piece of data in their analysis, and that was the revenues from selling the electricity that it generated. And when you put that on top of the expenses, it appears that the plant actually made a $5 million profit for the citizens of Michigan. And not only that, but it kept the electricity flowing. And if you shut this down, they don't have a replacement yet. They're trying to replace it with renewables in Michigan because Michigan is stark raving nuts.

Adam Van We 17:35

Well, I mean, when you're talking about a cost of 29 million, 29 million to you or me is a lot of money. 29 million to a gigantic company or a plant generating who knows how many megawatts of power a day, it's really nothing. It's nothing. I mean, that. That might be. That might be a couple days revenue. I mean, who knows? I don't know. The scale of this thing. But that doesn't even sound like a lot of money for a business of that size.

Joey Loss 18:02

No, that just seems like a, like that article is just a bush league representation job. It's like, okay, I can just pick a company and talk about the expenses. Who cares? What's. Oh, Nvidia. They spend this much money, they must be off like. No, they're the most profitable company in the world.

Steve Van We 18:07

Yeah.

Steve Van We 18:11

Yeah.

Adam Van We 18:17

Yeah, they, they spent 2 billion developing a new chip which they then sold like, you know, 100 billion of.

Steve Van We 18:24

So it's quite amazing, isn't it? Yeah. Gut reaction that the Trump derangement syndrome is everywhere. And the gut reaction of people is so funny to watch. If you are in the mood to make these things humorous, which I generally am. All right, let's, let's be the show that's not afraid to ask the big question this week. What happened with your crypto this week? Anybody paying attention? Any of you crypto owners?

Adam Van We 18:53

There's some volatility in it.

Steve Van We 18:55

Yeah, you could, you could phrase that probably what's up with crypto? And the answer would be nothing. I don't know what happened. But it just, it took a real tumble this week with the news and I do not follow it to speak of, so I can't tell you why. I don't know if you guys have any opinions, if, is it just within normal volatility or was it something in the economics that.

Adam Van We 19:18

No, well, I'm sure there is something there, but it's, I mean it wasn't outside of the normal volatility range for, for an asset class like that I saw was down like 4 1/2% on Friday at the open. I'm not exactly sure what caused it. I don't, I'm still trying to figure out what causes big moves in crypto. It doesn't move just like anything else. I know when the risk on appetite is strong and you're seeing people buy small cap stocks and things like that, they also tend to buy crypto. But overall I'm not exactly sure what drives it.

Steve Van We 19:50

Yeah, I wondered if there had been sort of a flight to crypto from some people who are, who were getting out of equities. I wonder if it's just a reverse flow.

Joey Loss 19:59

I don't know. I, I, it seems like sometimes bitcoin behaves like gold. It's like a risk off thing when there's concerns about currency and then other times it's risk on. So I can't get it.

Adam Van We 20:08

Yeah.

Steve Van We 20:09

Yeah, well, I don't know, I. I only bring these things up because it's such a big deal overall. But not to us. We don't talk about it very much and I'm just kind of curious. Still learning. We'll be right back. Don't go anywhere. This is the Van we Financial Hour. Welcome back to the Van we Financial Hour. I'm Steve Van We.

Adam Van We 20:26

I'm Adam Van We.

Joey Loss 20:27

And I'm Joey Loss.

Steve Van We 20:28

And I remind everybody that the lines are open 904-222-8255.

Steve Van We 20:35

And the trivia question is out there. And we'll repeat it. In The S&P 500 index, how many stocks had an actual negative annual rate of return over 10 years that ended July 31?

Steve Van We 20:54

That's just because when the data came in, it means absolutely nothing in the big scheme of things. But how many stocks of the s and P500 actually had a 10 year annualized return that was negative? Not something I would have thought was even likely at all. One quick thing and then Adam has a millionaire presentation which we haven't done for a while. And I know a lot of people like sue, so bear with me a moment because I think this is a little bit related to what we were just talking about and kind of fun. The article is called Bitcoin was the prototype. Nat Gold is the masterpiece. You guys heard of Nat Gold? N A T G O L D. Well, let's see. Bitcoin's cool some respects, but it has some major flaws. According to the Nat Gold people people, it's backed by nothing but faith. True. It's wildly volatile. True. And it burns more electricity than Argentina. I don't know if that exact comparison is true, but it is, I believe, the second largest consumer of electricity in this country after the federal government. So that was the prototype. Now here comes the masterpiece, as they call it. Nat Gold is the next evolution. A digitally mined token backed by real verified gold still in the ground. And it goes even further. No physical extraction. The gold stays in the earth. No storage costs and no middlemen. No pollution or environmental harm. Well, this is getting good, huh? Just real gold. Digitally secured and globally tradable. Built by a team of formal SEC advice, former SEC advisors, global mining executives and institutional blockchain partners trusted by Goldman Sachs. Wow, they've already got a hundred thousand token reservations. Oh, no, they're going to only accept 100,000 up front. And I looked all of this, you know, it's really good, nice stuff, made a lot of notes. And then I came down to that one question. I don't see answered in here. Who owns the gold? It's underground. Yeah.

Joey Loss 23:09

What is the value of it? Being backed by the least liquid asset I could possibly. I mean. Yeah, the one flaw there, it's.

Steve Van We 23:13

Yeah.

Steve Van We 23:20

In the ground.

Adam Van We 23:21

If it were in a safe somewhere, I would like the idea a lot more.

Steve Van We 23:25

You can get allocated gold, especially in the bank of England. There's a lot of gold in their vault that's allocated. That means you own a piece of it, you're part of it is actually identified as your part of it.

Adam Van We 23:36

So. So in this case, still in the ground, they go bankrupt. You, you're out there with a pickaxe, digging your gold out.

Steve Van We 23:43

I want my gold. Yeah.

Joey Loss 23:44

Which was yours anyway, if you found it. By the way. Just the greatest game.

Adam Van We 23:49

I assume they have the mineral rights to it.

Joey Loss 23:51

Yeah, maybe.

Steve Van We 23:52

I'm pretty sure you guys would get a kick out of this one.

Joey Loss 23:55

Was this founded by Fort Knox? This is the perfect solution to.

Steve Van We 23:59

There it actually is. And I'm kind of disappointed that Trump hasn't done his Fort Knox audit yet. But that's a story for another day. All right, who am I? A million self made millionaire in America.

Adam Van We 24:12

For those of you that are not familiar with this segment, what I do is I go and I find someone who became a millionaire who was born poor or, or had modest means and through hard work and, and a little bit of luck ends up becoming wildly successful and wealthy. And it's just sort of to prove that the American dream is, is still what they say it is and it's still available to people. This one's really good. I think you'll enjoy it. This millionaire was born in 1893 in Belarus, Russia, present day Belarus, to a Jewish family with eight children. Her father was a rabbi and her mother owned a grocery store. She began working in that store at a young age. At the age of 20, she got married and then immigrated to the United States. In 1917, she arrived in Seattle unable to speak English and was transferred to Iowa where her husband was living. Two years later, they moved to Omaha, Nebraska, which had a community of Russian speaking immigrants. Their first business venture was to open a used clothing store in Omaha which was operated by her husband. Then in 1937, she founded the Nebraska Furniture Mart in the basement of their clothing store. With a $500 investment, that's about $12,000 by today's standards, this store grew to be the largest indoor furniture store in America. This millionaire saw what she perceived as a, as greed in this industry. She thought that 50% margins were way too high. She bought everything for cheap, marked it up 10% and resold it for cheap early on. Vendors wouldn't extend her credit. She told them they were stupid and that they would go bankrupt and she would be rich and that she would buy their building more often than not. That is exactly what happened. Yeah. She ended up putting many competitors out of business and sometimes bought their businesses out of bankruptcy. The Nebraska Furniture March Mart ended up so profitable that Warren Buffett's Berkshire Hathaway ended up purchasing 90% of it in 1983 for $60 million. This now multi millionaire retired six years later. Three months after that, she opened a new store across the street, which became profitable in 1991 and was acquired by Buffett in 1992. This millionaire was involved in philanthropic activities including supporting the construction of the performing arts center which is named after her, the Omaha Jewish Community Center. She received honorary degrees from NYU and Creighton University. However, this amazing woman passed away in 1998 at the age of 104. Her credo was sell cheap, tell the truth and don't cheat nobody. Warren Buffett said of Rose Blumpkin, I'd rather wrestle grizzlies than compete with Mrs. B and her progeny. From Belarus, Russia, to owning the largest furniture store in America and selling out to Warren Buffett, Buffett. Rose Blumkin led a long and amazing life. She praised America and Americans up till her death. And this comes as no surprise because where else would this story have been possible?

Steve Van We 25:51

She didn't love it.

Steve Van We 27:07

Huh?

Joey Loss 27:07

I love that.

Adam Van We 27:08

Yeah. Pretty good, huh?

Steve Van We 27:10

Grammar aside, that was pretty good advice.

Adam Van We 27:13

Yeah, definitely.

Joey Loss 27:14

Now that grammar was perfect for an entrepreneur. That's the hard headed. That's what it takes.

Steve Van We 27:16

I think that's true too.

Adam Van We 27:19

Definitely.

Steve Van We 27:20

Absolutely. Very good. All right. Got a warning shot for the world. Another thing that we like to talk about a lot is the population implosion that's happening among civilized countries. Got some new numbers here and they're getting scarier and scarier. And this one is from Great Britain and they just set another new fertility record. And it wasn't on the direction that we would like it to be. 2.1 children per female is replacement rate for your population. And we've been talking about South Korea imploding, Japan imploding, Russia's imploding. We would be if not for our immigration. But England just dropped a 1.41.

Joey Loss 28:12

Oh my goodness.

Steve Van We 28:14

Now, how fast does a country find itself unpopulated?

Steve Van We 28:19

And we're going to find out if this keeps Up England has a lot of problems. A lot of just stupidity is what I would call a lot of it. And yes, children are too expensive for a lot of people. They got to do something to figure out why. But I was absolutely appalled that 1.41

Steve Van We 28:42

which broke last year's record, which was 1.42

Steve Van We 28:47

and people, you got to wake up, you got to do something. I do. I have the answer. No, I do not. I do have the problem though, will in hand. All right, how about this one? Anybody know what LTSS insurance is?

Adam Van We 29:06

Long term something you're good, good start.

Steve Van We 29:09

Long term services and supports which is essentially like in comb hair, in home care, assisted living. It basically, it's long term care. A lot of people think that Medicare covers it and of course we all know that Medicare doesn't cover it. So you try to buy long term care insurance. Most people wait too long, can't afford it, it's very expensive. There are alternatives in the life insurance and annuity industry that help long term planning. Long term care planning starts with can you afford and can you get qualified for a long term care policy? And if that's no, then it moves on. Well, a couple of congressmen got together and said well we can do something about this. And they have introduced a bill that would, it's called the well being insurance for seniors to be at home, which stands for Wish Act. Now does that ring a bell with anybody but me? When somebody puts out a proposal for Congress, it's called the Wish Act, Wish in One Hand act or what? I don't know. But anyway, Tom Suozi, Democrat from New York and John Moulinar,

Steve Van We 30:29

Republican from Michigan have proposed this and it would be qualified for by having at least six quarters of payroll tax contributions during the applicable base period which starts in the first quarter of next year. So nobody's qualified for it today under their plan and wouldn't be for at least a year and a half but then it would start to happen and it goes up. Full coverage would be attained at 40 quarters of coverage. So this would be good for very young people coming in. Now who stands to benefit? It's people who are basically guaranteed to run out of money because of their medical expenses later in their lives. And that's true. And this they, they say it drops the percentage of people who are going to run into trouble by 28 to 30%. Well that's okay. We care about those things. And it also says that wealth is no guarantee against a long term care catastrophe, which we tell our clients all the Time. Don't plan on inheriting your parents wealth until you find out how much of it they're going to spend on their way out of this world. Because it can be a whole bunch. This is two solid pages typed up here with all their explanations and so on. And once again, I found one hole in the whole thing here. How are you paying for it?

Adam Van We 31:58

We're out of time.

Steve Van We 31:59

We're on our way out. Yeah. All right, we'll be right back. Don't go anywhere. This is the Ban We Financial Hour. Welcome back to the Ban We Financial Hour. I'm Steve Van. We're going to go right. I'm sorry, Joey, I'm really off of this segment. Yeah, I apologize here. I got carried away. I want to just finish that thought before we hit the phones. And the problem with this LTSS insurance bill is they mention that it's paid for by six quarters of payroll tax contributions. So as Adam remarked. Oh, so we're going to tax the rich. Well, they won't even tell us how much.

Adam Van We 32:07

We're Adam Van.

Adam Van We 32:36

That would hit everyone. That would be an increase in tax. You're just paying more FICA.

Steve Van We 32:40

How much? You're talking about 1%, 2%, 15%? I don't know. You put this stuff out there and get everybody real enthusiastic about it and then put a price tag on it. What happens?

Adam Van We 32:45

Yeah.

Joey Loss 32:53

You're not supposed to ask how it's paid for.

Steve Van We 32:55

Exactly. Good morning, Mike. How stains?

Speaker 4 32:58

Hey, good morning, guys.

Speaker 4 33:02

Well, I got this ringing in my ears and I can't get rid of it. I think I trapped some,

Speaker 4 33:09

probably wax. I did some swimming recently, a lot of swimming, and I think I trapped some and I'm trying to loosen it up with the old standby peroxide and olive oil. And it's doing it somewhat, but not enough.

Steve Van We 33:25

How about some swim ear on it? Never know. Something will work.

Speaker 4 33:31

Anyhow, I just want to touch base on the recent lower court surprise, surprise decision that someone said that Trump's tariffs are illegal. And my question is, I think Steve and I are old enough to remember President McKinley and he did tariffs.

Steve Van We 33:43

Yep.

Steve Van We 33:52

And I remember yourself.

Speaker 4 33:58

Also, I think they blamed Herbert Hoover for his tariffs as part of the Depression.

Speaker 4 34:07

I thought a president has the right to initiate tariffs.

Adam Van We 34:11

Well, all other presidents do, just not Trump.

Speaker 4 34:14

Good answer. Good answer.

Adam Van We 34:16

No, Biden put on tariffs. Yeah, he did. He put tariffs on Canadian lumber. We talked about it last week.

Steve Van We 34:17

Biden put tariffs on.

Steve Van We 34:23

The problem with this one is they're citing the exact law that Trump is using Right there Are several other possibilities, including. You ready for this one? Smoot Hawley.

Speaker 4 34:35

What was that?

Steve Van We 34:36

Smoot Hawley is still in the. Yeah. He could invoke that if they wanted to. He'll get around this. You know, they just line up. It's my turn to block Trump. No, it's my turn to block Trump. Every day some somebody and I think, look at, look at the Supreme Court. They are getting very upset with this.

Speaker 4 34:38

Oh, Smoot Hawley.

Adam Van We 34:58

Yeah, definitely. It's. They're going to, they're going to hear about this and I think they do it just to get invited to cocktail parties in D.C. oh, count on it.

Steve Van We 35:06

Absolutely.

Speaker 4 35:07

I agree. I think the lower court decision, whoever it was, said that it has to be done under severe or extreme circumstances. And this wasn't one of them.

Steve Van We 35:20

Well, it is if you listen to the real argument. But what the court actually said was it has to be an enumerated power under the emergency part of that clause. In other words, if it doesn't say the word tariffs, you can't do tariffs no matter what's going on. According to stupidity. 74 ruling, which means there's plenty of dissent on it and it'll go to the Supreme Court and they'll laugh them out of the place. Or they'll just say, no, use a different law, something.

Speaker 4 35:50

Yeah, I believe it'll be overturned. But if not, I guess that would have ramifications for the stock market.

Steve Van We 35:58

Yes, it would. I'm. I'm not going to lose any sleep over that possibility to say.

Speaker 4 36:03

I understand. I hear anyhow, shot at the trivia. I'm going to say 22.

Steve Van We 36:07

Yeah.

Steve Van We 36:11

You can always count on Mike. He's doing his homework. It is indeed. 22. And to me, doesn't it seem just kind of really unlikely that 22 out of 500 stocks over 10 years lost money and stayed in the index? Very strange.

Speaker 4 36:31

Yeah. Some of them were Centene,

Speaker 4 36:34

Walgreens, PG and E. Who's had their troubles out there in California.

Adam Van We 36:39

Oh, yeah.

Steve Van We 36:40

Oh, very much so. Interesting.

Speaker 4 36:42

Yeah. Anyhow, all right, great weekend and thank you so much for another great show.

Steve Van We 36:47

Sharon, we've got your address. Not the.

Speaker 4 36:49

All right, thanks. Take care. Bye.

Steve Van We 36:52

Yep, it's. It kind of makes you wonder, what are they doing? Are they sleeping while they're building this index or aren't there enough choices or what? But anyway, that. That was the answer. 22 of them over 10 years lost money and still look what the index does. Just keep in there. That's why a lot of people say that stock Pickers make more money. I don't go along with it. Some stock pickers might. Yeah, but not very many.

Adam Van We 37:19

Well, some stock pickers do in any given year, but exactly, yeah. Over time, it's really hard to beat the market.

Steve Van We 37:25

Yeah. We've talked about the Congressional Budget Office a lot and how they always get things wrong. And they were saying that the Trump tax bill was going to cost 4 trillion or 5 trillion added to the debt over 10 years or so. Well, guess what? They changed their tune. Isn't that amazing? Here we go. CBO projects Trump tariffs will slash deficit by $4 trillion. What changed?

Steve Van We 38:00

I don't know.

Adam Van We 38:01

Too bad they're. Too bad they're illegal.

Steve Van We 38:04

Yeah,

Steve Van We 38:07

that's good. Now cost us $4 trillion to throw. Yeah.

Joey Loss 38:12

Democrats are supposed to slash the deficit, not Republicans.

Steve Van We 38:16

I think that's the problem that, you know, it's just one thing after another after another after another, and it's just keeps going on and on.

Joey Loss 38:27

What changed in their calculations? Did they just look at the tariff revenue and decide that I see growth.

Adam Van We 38:34

They. They said, well, the tariff revenue was not connected to the bbba, so this is a separate calculation. Okay, so that one, they scored at what, negative 3 trillion, and now they're saying 4 trillion will be made from the tariffs. I think. So I think it's totally separate.

Steve Van We 38:51

Yeah. Yeah. It's just absolutely bizarre. And of course, then you don't borrow as much money and then the interest on that debt doesn't pile up as much. So on and on and on. But those are the same things that we said when we were trying to get the bill passed, weren't they? And speaking of getting the bill passed, it's nice to know when you're being listened to. And it. It seems to me that Trump's been listening to us. As we've been saying,

Steve Van We 39:24

you really need to learn to love the obbba, because people have been just slamming in every way, shape or form in the media. And I just published a blog a little while ago called Learn to Love the OBBA obbba. It's easy. It was a hard one to write. Took a lot of revising. Saying it the way we wanted to say it was difficult, but the problem is people have been told that the big, beautiful bill is bad, and it's hard to tell them why it's bad and get to the masses. So Trump listened and made a change. The other day, he was giving a speech and he has decided that the OBBBA is a moniker now that is too negative among the public to change Its perception real well. So he has changed it. And the new name of the, the old bbba, which I'm going to change to because I like it, it's now called the Working Families Tax Cut. Okay. Now could you sell a name like Working Families Tax Cut to Working Families? I think we could. And I think he's going to do it in the form of a Republican convention next summer if pre midterm elections.

Adam Van We 40:38

Yeah.

Adam Van We 40:48

Yeah, I saw that. If people believe that the Inflation Reduction act reduced inflation, they will believe that.

Steve Van We 40:54

Exactly right. But I am just amazed at how many times we talk about something on this show and they pick it up in D.C. and do it. And I'm sure they just have people paid to sit there and listen to what we talk about.

Adam Van We 41:09

Oh, obviously.

Joey Loss 41:10

And it's not just D.C. cracker barrel changed their logo back. We saved the company last week.

Steve Van We 41:14

That was all Joey.

Joey Loss 41:17

That one hit close to home. I had to say something.

Steve Van We 41:19

Yeah, apparently. And they listened to you. So, you know, stick around a few years. Maybe we'll get this whole, whole problem straightened out. We talked about Warren Buffett a little bit and I had this little piece of waiting to talk about one day. Charlie Munger, arrest him. Oh, we have a call. I don't, I don't have.

Adam Van We 41:42

Sorry. Just pick it up.

Steve Van We 41:44

Good morning.

Speaker 4 41:46

Very quick question. Listen. On the air,

Speaker 4 41:50

Canada, Alberta and Saskatchewan. I don't know if y' all have been following this, but the lady who is the prime minister in Alberta is really pushing to gain their independence or maybe statehood. At least to be like the Virgin Islands, etc. Economically. Yalls thoughts about that. Thanks so much.

Steve Van We 42:05

Yes.

Steve Van We 42:14

Oh, absolutely. Thank you, Marshall.

Steve Van We 42:20

She is in charge of the part of Canada that has the most resources and she is very strongly pro American and doesn't like all the junk that they get from Ottawa. And she's been pushing pretty hard for this. And if there's any way they can do it, I would be so in favor.

Adam Van We 42:37

This is a, this is a big trend right now. Like the eastern parts of California, Oregon, Washington have all talked about these things. Really, it comes down to just philosophical differences between Democrat city dwellers and, and rural Republicans. And they don't get along, but there's more of the city dwellers and they end up living under those policies that benefit them and not the rural people. And I think the same thing is going on in Canada. Yep.

Steve Van We 43:03

Okay, in the final few seconds here, before I thank everybody for listening, I want to finish this up. Charlie Munger, may he rest in peace, longtime partner of Warren Buffett had a rule that a lot of people are going to find very disturbing. He calls it the 50% drop test. He says the difference between a winner and a loser in investing is that if you undergo a 50% drop, you still live through it. You don't sell off, and then you'll be a winner. But if you sell with a 50% drop, you will never recover. He was a pretty smart guy. It hurts, but it works. Thanks for listening. Have a wonderful Labor Day. We'll see you next week, the same time. This is the band with Financial Hour.