January 3rd, 2026 - Predicting 2026: Financial Trends and Warnings

On this episode of the Van We Financial Hour, Steve Van We and Joey Loss discuss the recent absence of Adam, who's off duck hunting in Arkansas. They delve into finance topics, highlighting notable 2025 market performances, Steve's congressional wish list review, and predictions for the upcoming year. The duo also speculates on potential 2026 disruptors, from geopolitical risks to tech advancements, engaging listeners in an insightful hour of financial analysis and conjecture.

Transcript

Steven H Van Wie 0:00

It's Saturday morning, it's 10 o'clock. This is the Van Wie Financial Hour. I'm Steve Van Wie. 

Joey Loss 0:06

And I'm Joey Loss.

Steven H Van Wie 0:08

And Adam is out today. He'll be back next week. He's chasing around a bunch of nicely colored, defenseless little birds down in Arkansas.

Joey Loss 0:20

He sent me a video yesterday that I'll just summarize as it looks like he's having fun.

Steven H Van Wie 0:23

Yeah, he always does. He's got a friend down there that has one of the primo duck hunting preserves anywhere in the country. They do an annual trip right, right about now and they, they just load up every day. There's so many decks, I don't even know if you have to aim. You just sort of point and shoot, you get them, but then they don't actually eat them, so they donate them to the people in the area that need them. And they have a guy who comes in and takes them away and cleans them and gives them all of the poor people and so on. And I think that's pretty cool.

Joey Loss 0:58

Yeah, yeah, I think that makes a lot of sense, especially because I think for this trip they've got guys coming from everywhere to hang out. Yeah, it just makes sense.

Steven H Van Wie 1:05

Yeah, these are people that Adam's known from his past jobs and goes all the way back to college in a couple of places. And it's a big get together and everybody's doing well. All these guys are doing very well, but the one who owns that property is doing exceptionally well. Yes, it's fun. And because it's one time a year and he'll be back next week. So enough of that. Happy New Year.

Joey Loss 1:34

Happy New Year.

Steven H Van Wie 1:36

I don't know where the whole year went. Last time I looked it was about the 3rd of August and now it's the 3rd of January. But got to get used to that because as you get older, it happens a little quicker every year, it seems. So what's going to happen this year? First off, I welcome everybody back. All of the regulars, you know, I say it every week. You keep listening, we'll keep talking. And without you guys, we probably wouldn't have the desire to do this anymore. But if you're new, then you should try to add yourself to the regular list and listen to the whole thing. Of course, you can always catch it on a podcast after if you miss it. But if you spend the whole hour, you will inevitably pick up something that's worthwhile and hopefully it just makes everybody's future a little bit better. And let's see, we had Last week had a caller who posed an interesting thing to us, said, why don't you, we want to know what you think for next year because you're pretty generous with that advice. But why don't you, you come up with like a top 10 list of things that could happen that would change things. And we decided at the end of the show that we would each do our own. And we never talked before the show about things like this because I, I like the spontaneity and the differences of opinion and so on. So after the market wrap, I'm going to run through my annual how did Congress do on my Christmas list. And then we're going to go into what we think will happen next year and then we're going to go into the Countdown list and see what things could disrupt the market. So it's a little bit different format today, but it definitely seeks input from the outside. So if we're going through what we want to go through and you have something else or a comment on what we've said or whatever it is, just pick up the phone and dial 904-222-8255

Steven H Van Wie 3:42

and you will go to the head of the class. All right. That said, this was a week that it felt to me like two completely different weeks. There was the last year part of the week, then there was the this year part of the week. With that take it away, this market.

Joey Loss 4:01

Rap, I'm going to focus on the entirety of 2025. And because we have so much other market conditional conversation to have, I'm just going to try and go through it pretty quickly. But 2025 was a year characterized by an everything rally. But perhaps the most notable headline was the explosive breakout in precious metals in international markets. Running through the major indices for the year, by order of success, Silver was the first place winner at 149.2%.

Joey Loss 4:29

Just an absurd number to say out loud. Gold did about half of that 74.5%.

Joey Loss 4:36

Emerging markets shined for the first time In a while, 33.6% for the year, developed international, 31.9%. The NASDAQ was up a whopping 20 and a half percent. The S&P was up 16.4. The Dow 13.4, 13.4 and the Russell Small Cap Index was up 12.8%.

Joey Loss 4:57

There's a lot of players in that list that we have not seen do anything for quite some time. I mean, to see international and small caps doing a good job is pretty exciting.

Steven H Van Wie 5:06

That is, especially if you've been hanging on to them, hopefully as long as I have.

Joey Loss 5:11

Yeah, I think like over the last year or the 10 years, I would imagine American investors have just been maybe 1 to 2% a year tilting heavier into the US and this was a corrective moment. Yeah.

Steven H Van Wie 5:22

Had to happen. 20, 30, 40, 50 years of history say it will happen. It just won't tell you when.

Joey Loss 5:27

Yep. Yeah. The S and P delivered a powerhouse performance in 2025, gaining the 16.4point I mentioned. And it marks its third straight year of double digit returns. Excluding the tariff episode in the early part of the year, it was a desirably smooth ride for investors. The index spent a staggering 55% of the time in overbought territory refusing to let up. Even as many braced for a correction that never quite arrived. However, while the market was hitting record highs, the mood across the country remains fractured. The University of Michigan Economic Sentiment Survey provided a stark reminder of this disconnect throughout the year. The survey data reveals that political leaning has become a primary driver of how individuals view the economy. Regardless of actual data on GDP or jobs. Those on the left and the right report diametrically opposed views on inflation and interest rate expectations. Essentially, your economic outlook in 2025 was often determined more by how you voted than by your actual bank statement and vocational experience. That's just fascinating that that's still the case.

Steven H Van Wie 6:33

I've never seen it that that bifurcated before. I guess there's always been some mood changes with the politics of the day, but when you say they're opposite, you're not talking about like it's 55, 45 and the other ones is 45, 55. We're looking at 80, 90%. Yeah, it's just weird.

Joey Loss 6:54

And if you ask these people, you know, just give a general response, how are things going? They'll say, oh, it's awful out there. And then if you ask someone who voted a different way, they'll say, oh, everything's fantastic. I can't wait for the future. Yep, amazing. I have some strategic we're running starting to run down on time for this segment, but I'll quickly run through generally what the strategic forecast suggests for next year. So number one, Wall street is unanimously Team Bull. In a rare moment of total agreement, all 20 major Wall street strategists expect the market to finish 2026 higher than it starts. The average forecast is a gain of 10.7%. While optimism is great, remember that when everyone is on the same side of the boat, the market can become vulnerable to surprises. Number two, the tax selling speed bump. After a year like 2025, when everything is so profitable, especially things like gold and silver, you're going to see people making adjustments. And a lot of those people waited to make those adjustments until 2026 because they wanted to kick the tax bill down to the next tax year. So I think investors would be wise to expect a wave of selling early in 2026 as people lock in those gains, raising profits. And number three, AI is a long term story, not a flash in the pan. Most experts think we're only in the third inning of this AI run. And so I think those are all positives looking into 2023 or 2026, and I think that's what the strategists are coming together to agree on.

Steven H Van Wie 8:20

Yeah, I don't see how anybody could even conjure up a thought that AI is anything but unstoppable. It's crazy. All right. We're going to take a quick break. We'll be right back. Don't go anywhere. This is the Van Wie Financial Hour. 

Steven H Van Wie 8:47

Welcome back to the Van Wie Financial Hour. I'm Steve Van Wie.

Joey Loss 8:49

 And I'm Joey Loss. 

Steven H Van Wie 8:51

And we do have a trivia question as usual brought to you by Paul Lloyd at First Coast Alarm. You can call Paul at 943-67888. Got an unusual trivia question for an unusual day. But technology's a little bit soft lately. But Joey just alluded to the fact that in the coming years, it's not going to be any different than the preceding years. Technology leads the way and will. So this is a technology question. What high tech event was promised to us that it would happen in 2017, but it wasn't completed until a few days ago. That's all I'm going to ask. It could be a wide variety, as you know. All right. I did want to mention the politics of the Western hemisphere this morning. Seems that Nicholas Maduro and his wife had an early and unexpected awakening this morning. And then they got a free helicopter ride out to a big ship where they're headed to New York to stand trial for basically the crime of being Nicholas Maduro and his wife. It's just about all you have to say. So thank you, President Trump and the entire military who did your job beautifully. I heard there might be a couple people hurt, but there were no, no real casualties in this whole thing. Okay, lines are open. 904-222-8255.

Steven H Van Wie 10:19

Joy wanted to wrap up a couple things, I believe and then we'll move on to the plan.

Joey Loss 10:26

Yeah, I just wanted to touch base on the. I ran through these strategic forecast takeaways pretty quickly. One was that Wall street is unanimously team bull. All 20 major strategists are positive on next year. Average forecast is 10.7% for the S.

Steven H Van Wie 10:41

And P. Their neck out to the average over time.

Joey Loss 10:44

Yeah, right. Which by the way, when I looked at under the hood at the data, the spread historically between what the strategists predict and what actually happens is 14% on average. So it's not even close. That's more than a standard deviation. It's not looking too hot. Number two, tax selling speed bump. I think we should all expect some volatility, especially through tax day as people create liquidity to pay tax bills. It's going to be a messy first part of the year and I don't think that necessarily means anything about.

Steven H Van Wie 11:14

Although there is a setting factor because prior to tax day, people who are getting refunds will be filing like crazy and the refunds are going to be bigger than ever because the tax law was changed retroactively.

Joey Loss 11:26

Yeah, that's a good point. That's true.

Steven H Van Wie 11:30

They usually change the tax law and you have to wait for things. But they were smart to do it this way. I think they said not only are we not going to allow the taxes to go up on 1-1-26,

Steven H Van Wie 11:44

but we're also going to go backwards with some of these things like the $6,000 deductions for age 65 and up and the no tax on tips and that sort of thing, all retroactive. Well, they didn't change the withholding tables until this week. So what's going to happen is people are over withheld and that's going to result in them getting bigger refunds, which hopefully will offset any kind of negativity that gets in there too.

Joey Loss 12:10

Yeah, that's a very fair point. I mean, even a few thousand dollars, what you're talking about impacts 100 million people. Yeah, that's a real money.

Steven H Van Wie 12:17

When you've got rounded off to about half of America, that would be stymied if they got an unexpected $1,000 expense. If you can get them a thousand or two or three additional refund, that could be a game changer for many people. Hope it works out as well as we think it probably will. But I absolutely agree, expect volatility statistically, the second year of a presidential term is the worst one. But there's so much about this particular year and the past five or six, actually almost 10 now. I don't know that history lessons are as valuable as they used to be.

Joey Loss 12:33

Yeah.

Joey Loss 13:01

Yeah, there's just so many. The acceleration of the entire economy just continues to increase. And so I think historic data is interesting, but it's not as useful.

Steven H Van Wie 13:11

Well, every two years for as long as I've been doing radio, I have looked at my congressional wish list for, from Congress for Christmas. And then afterwards I take a look at it every Christmas couple of years and see what happened in 2023. My first wish was that the Fed should pause rate hikes because they were hiking them pretty fast there. They did. So we can call that some success. And they did start to lower them, but they're lowering rates at what most people consider a snail's pace. I would like to see that accelerate. So I gave that wish a B. Wish number two was get a grip on spending in Ukraine. We were sending untold dollars over there under the prior administration and there was no accounting. And it wasn't just dollars, it was also equipment and so on that got stopped. And we're still not out of there. And in fact, we'll talk a little more about that possibility later. But I gave that one a good, solid be. Also the third one. Build that wall. We stopped the WALL Suddenly on January 20th when, when Biden was inaugurated. And now it has started again. I have seen a little bit about them building some of the missing sections. I don't know why it has not been just touted from the,

Steven H Van Wie 14:44

from every standpoint in D.C. but we are doing what's needed to hopefully close it all up now. And I gave that one an A. Oh, by the way, we sold off all the material that was sitting in the desert for pennies on the dollar. So a lot of it's got to be refabricated at higher cost, naturally. Wish number four, return to constitutional budgeting processes to slow spending growth rather than six months, one year, two year continuing resolutions. The new House has actually broken down all the bills into their, their separate departmental funding bills. Unfortunately, they haven't even gotten half of them done. And it's the new year and theoretically these things should be done at the end of September when the fiscal year ends. So I gave that a C plus and the plus is for the effort. The C is instead of a good grade, which, number five and final, address the Social Security and Medicare impending solvencies. The clock is ticking and too many people depend on them. Grade F for doing nothing again and again and again, not good. But one area does stand alone on deserving congressional praise, which they did, some of them willingly, some reluctantly and that was freezing the tax system and making it better. And they did. That gets an A plus. So now

Joey Loss 16:21

Yep.

Steven H Van Wie 16:26

why don't you tell us what you think is going to happen. I'll chime in on that. And then after the next break we'll come back with our possible exceptions.

Joey Loss 16:33

I've never been great at saying what I think is going to happen, but I'll tell you the reasons I feel good. So I think first of all, the tax bill was a huge thing. And this year is, you know, it's funny with taxes when you don't have a tax increase, which is exactly what OBBBA did. Right. We were going to have a tax increase. There was pain we were going to feel. That whole situation is gone now. So as we go into this year, whatever happens, it's better than what would have happened. I think that's a, that's a starting point. And so the fact that that's present makes me, that's one notch in the positive. Other things, the market still has great momentum. We keep hitting all time highs and we dance around that high. We kind of drop a little bit and then we go up and find a new one. Momentum is a significant factor historically and it's a real investment factor and it's in a positive place right now. Trend is your friend. And I think we're in a good part of an interest rate cycle. We're seeing things go down that increases access to capital funding, which is just in time. A lot of these companies are making lots of AI investments. Those AI investments are increasing the amount of productivity per worker in the workforce. All of that bodes positively.

Steven H Van Wie 17:27

The trend is your friend.

Joey Loss 17:51

So all of these kind of major factors that I would look at also inflation is healthy. So all of these factors that I would look at to say what is the state of the economy and are we in a good position with a foundation that can support success? I would say yeah, most of those things are there. With that said, I've been doing this long enough to know that sometimes that's not enough. A single weird world event, right. If there's a major conflict that breaks out or some massive shortage and a major resource that emerges, these things can derail everything else.

Steven H Van Wie 18:22

I just said I've had an expression for that one for 20 years now. The exception to all this wonderful stuff that's going on could be a mushroom cloud over Tel Aviv. That's my version of a real catastrophe. Yeah, well, there are other things that could influence it too, but you get the point. And I pretty much Just right down the line. Agree with what Joey says. All of the elements are there except a couple. And that exception is the politics are ridiculous.

Steven H Van Wie 19:00

It's not normal to be this politically divided until right about at election time. And we're nowhere near election time right now. I know everybody says the midterms are right around the corner. It's January 3rd. That's out in November. In politics. That's eons of time. That part I think is just a terrible shame that's not going to get fixed because nobody who doesn't already like Trump is going to back up one day and look at what's going on and say, wow, he's actually pretty good. So it's a 50, 50 country. It's a love hate relationship. That's not going to get any better, I fear. But there's also some people in Congress who are known to many of us who are in need of leaving. And some of them are. That's good news. Now, I don't know what happens to guys like Massie or Marjorie Taylor Greene just one day turn around, become attack dogs on the right. But they're going bye bye. So we'll go into it with an okay outlook and the next 10 things, 20 things if you count both of us, will be right after the break. Don't go anywhere. This is the Van Wie Financial Hour.

Steven H Van Wie 20:19

Welcome back to the Van Wie Financial Hour. I'm Steve Van Wie.

Joey Loss 20:21

And I'm Joey Loss.

Steven H Van Wie 20:23

And I remind people lines open 904-222-8255

Steven H Van Wie 20:30

and trivia questions out there. What high tech event was promised to America in 2017 but didn't take place until just a few days ago? It did take place. So one hint. Okay. Now according to our request last week come up with 10 things that could be game changers for 2026 should they happen. And we're not assigning any probability to these things. We're just saying this would be interesting. Slash good, slash bad, slash indifferent. I don't know, interesting. So Joey and I are going to go back and forth on it. Take it away.

Joey Loss 21:13

I may have understood his request a little differently. So I have, like, I have factors that are material to the.

Steven H Van Wie 21:20

So, okay, you do factors, I'll do events.

Joey Loss 21:23

Okay, that's good. And they'll interrelate, I'm sure. Oh, absolutely. So one of them is the momentum. I've already mentioned that. So I think we should start there. Momentum. We've got it right now. It's a bull market until proven otherwise. And history shows that strong Years tend to follow strong years as investors buy the dip. Whenever we hit a new all time high, sometimes we see a little dip and

Joey Loss 21:47

that's pretty common for the top of the market. And every time that's happened over the last few years, it seems like we just find a new high thereafter. And if, if that momentum goes away, we'll lose the beloved tailwind that's been a benefit to us.

Steven H Van Wie 22:00

Yeah, you know, one of the 8 million or so things that I have used for all the years I've been in this business. Now one of them that I like to ask new people who come in say, you know, you might be old enough to have been alive on January 20th of July 1981 because something interesting happened that day. Ronald Reagan was inaugurated for the first time. Could you tell me what the Dow Jones Industrial Average was that day? And I remind you that it's now about 48,000. And I have had some people get sort of close, but not very. And most of them are off by

Steven H Van Wie 22:46

954.

Steven H Van Wie 22:49

Now what have we been through since 1981? Oh, little things like 9, 11, 08, on and on and on, over and over and over. And yet the Dow Jones Industrial average is around 48,000. Now if that is not enough to teach people that long term this market is going to treat you pretty well, then I'm out of stories. So let's start here. This, this could be a shake up should it happen. And you, I'm going to let you assign your own probabilities to it. New York City descends into chaos under Mamdani and the world financial system is. I called it, I got a James Bond moment in the call. It shaken, not stirred. What could trigger world events more than a serious financial crisis emanating from New York City? All right, back to you.

Joey Loss 23:48

Factor number two is AI productivity. So everything we've seen over the last year says that earnings are rising per worker, corporate earnings are rising per worker, and as a result companies are paying these people more. Which actually flies in the face of one of the concerns that has come up over the year about AI taking people's jobs or eliminating jobs. It's actually just made people more productive. Is there a future phase where that changes and we start to lose jobs because AI does the whole job? Maybe. But it doesn't seem like we have no reason to believe that right now. Evidence is saying the opposite.

Steven H Van Wie 24:21

Jobs change more than they go away.

Joey Loss 24:23

Yeah, it's similar to just. We've said this before too, just like with the dawn of the Internet and computers people are like, well, what are the people going to do when the computers do all the work? And, you know, know that. Now that's laughable because 90% of jobs are on a computer and manufacturing is only 8% of the US economy.

Steven H Van Wie 24:38

Elon said work's going to be voluntary. Yeah, I think that's a little carried away.

Joey Loss 24:46

So if this reverses or slows or we see some, you know, unforeseeable trend in. In AI, you could expect a negative market response. But right now, the. The fodder is good.

Steven H Van Wie 24:55

Okay, all right, my next one. Putin continues lying and actually escalates in Ukraine, and America gets drawn in. Now, if he were to do something as big as even a dirty bomb, not. Not a nuke, but something abhorred like that, it would be very, very bad for the markets worldwide. And if anybody's capable of it, I don't think he will do it. But if anybody's capable of it, you got to think he is.

Joey Loss 25:31

Yeah, he's just a wild dog. I mean, he's. He was commenting this morning saying that we have no right, you know, as if he has a moral high ground, saying that we have no right to do this or that. I'm like, what are you. Are you kidding me? What did you do to your neighbor? Like, gosh.

Steven H Van Wie 25:48

All right, back to you.

Joey Loss 25:49

All right, so number three, factor number three, earnings growth. Corporate profit margins remain near record highs, giving companies a cushion even if the economy slows. Earnings report beat rates will at some point have to come up their remarkable high trend for 2025, where we're just seeing beat rate, beat rates that we don't get to see very often in the high 70s. Normally they're what, in the high 50s, low 60s. At some point, we'll have to revert to the mean. I think that will take a little bit of the wind out of the market. Is that going to be 2026? I don't know.

Steven H Van Wie 26:22

Okay, that's certainly a possibility. All right, next, the people in Gaza hold fair and free elections and vote Hamas back in.

Steven H Van Wie 26:35

Think about that. That's how they're there now. They were elected by the people in Gaza.

Joey Loss 26:36

That's a.

Joey Loss 26:39

Yeah.

Joey Loss 26:42

Yeah. I would have no idea where to put my money on a free election there.

Steven H Van Wie 26:46

I would know where not to put it.

Joey Loss 26:48

Yeah. Anywhere in that election.

Steven H Van Wie 26:52

Okay, you.

Joey Loss 26:53

Factor number four, consumer balance sheets right now. So consumer balance sheets are very positive right now. American households still have significant home equity and relatively low debt service costs relative to other periods. So long as this holds. This is a very strong positive for investors and for the consumers that I'm talking about. If we see some trend changing here, expect the market to be unhappy about it.

Steven H Van Wie 27:19

All right, Midterm election goes very poorly for us and all the lefty economists in the world. The Mamdani tapes immediately guide Congress down the black hole of more and more impeachment.

Steven H Van Wie 27:34

I do not think America wants more impeachment.

Joey Loss 27:39

Yeah, I don't think so either. I mean, in the same way that, look, I know we have like a Fed, I'm kind of skipping ahead. Maybe I'll hit that. So change in the Fed. This was point number nine for me. Any uncertainty regarding Federal Reserve leadership or a shift in their higher for longer interest rate stance could rattle investors. Obviously, we're in a declining rate trend right now. I think people and markets have had time to accept that a change will happen, but in a very small way. Looking at the way the market responds to the Fed is similar to when you try to disrupt the presidential office with impeachment. Things like that. People just don't like it on both sides. Investors don't love it.

Steven H Van Wie 28:18

You're going to love this. I'll read you my point 5. Prior to being replaced, Fed Chair Powell raises interest rates due to perceived inflation.

Joey Loss 28:28

Oh, my gosh. That's not impossible. No.

Steven H Van Wie 28:33

And, well, he knows he's being replaced. In fact, sometime this month, we'll know who's going to replace him. And he detests Trump. That's well known. I think he's still a real American, but he is. He's probably one of the two most personal hatred cases in America against Trump. And I wouldn't put it past him, but I don't think it'll happen. You know the old, the old saying, one of my other. Many, many. I stole this one from someone. It says, while things could get worse, they usually don't take that little bit of optimism on top of the what could happen things. All right, next factor.

Joey Loss 29:23

This is my factor number five, gas prices. So gas prices right now are falling, and that basically feels like another tax cut for the average consumer, freeing up cash for the rest of the economy. We're seeing some of that potentially in consumer stable or consumer discretionary spending. It was, it's had a very good year in a year when we thought it would be bad. So these things matter. Hopefully that stays up. If gas prices rise for some reason, which, given last night's event, I don't. Who knows how that impacts it, but I think this is a positive thing. But something to watch.

Steven H Van Wie 29:56

Agreed. All right, next, Epstein documents continue to pour in and the mainstream media exploits the Democrats false accusations when they're supposed to be done. We get another million last week. How many more millions are there in there? How many more stories can they run that are false because the media doesn't have to prove their stories anymore. Sources, close sources in the know, unnamed sources, all that stuff. If they keep pounding on Trump, it's going to make a lot of people less comfortable with what's going on. So that what should be a non story is just another potential story.

Joey Loss 30:43

I think people are exhausted about the Epstein thing. Like, even if you're trying to follow it, it's so hard to know what means what at this point. It just shoot you with a shotgun blast every, what, three, four weeks like that. All right, next, high valuations. Stocks are expensive right now. Based on current and historical price to earnings ratios, investors are paying a notable premium for stocks. This leaves less room for bad news. We'll comment on this over time as the year unfolds. I don't think they're out of whack. They're just on the high end of normal.

Steven H Van Wie 30:50

It is.

Joey Loss 31:14

Hopefully earnings keep up and that stays in the healthy range.

Steven H Van Wie 31:17

Yep. All right, got about 30 seconds left. The Supreme Court decisions further stifled Trump's economic agenda. This could start with the tariff case and he has a response ready for that because there are other laws he can use, but not just the Supreme Court, but all the federal judges who are getting chastised every day. Everything he tries to do, some federal judge will undo it or stop it or stay it or whatever. And over and over and over, it's taking its toll on the attitude of Americans economically. All right, we're going to take a quick break. We'll be right back with the wrap up on all of this. Don't go anywhere. This is the Van Wie Financial Hour. 

Steven H Van Wie 32:02

Welcome back to the Van Wie Financial Hour. I'm Steve Van Wie. 

Joey Loss 32:04

And I'm Joey Loss.

Steven H Van Wie 32:10

I remind Everybody, lines are open 904-222-8255. And the trivia question is out there. What high tech event that was promised for 2017 finally took place a few days ago? That's all the clues you're getting. All right, Joey and I are going through our top 10 things lists and we'll carry on with, by my count, number seven.

Joey Loss 32:31

Yes. Okay, so number seven, I've got national debt. So with the U.S. national debt expected to cross 41 trillion in 2026, the cost of interest is becoming a massive weight on the federal budget. Expect some market responses. We hit just sort of arbitrarily notable headline numbers like 40 trillion. You can imagine there'll be a big headline cycle about that.

Steven H Van Wie 32:55

Very likely.

Steven H Van Wie 32:57

Number eight for me is I'm skipping around a little bit. Health insurance and health care are unavailable to be fixed, which really means Congress can't get their act together and fix it. Therefore, Americans cannot afford coverage. They drop off the rolls and flood America's emergency rooms. And like that. In other words, we descend into to health care chaos.

Joey Loss 33:31

DC Dynamics, you've touched on this. I mean, this comes up every week and you spend some time on this today. But the second year of a presidential cycle, as you said, is just the worst historically. And the difference is stark. Last week we actually looked at the numbers and it was like 8.9% or something like that was the average for years one, three and four in the S&P. Year two is zero. And a lot of that has to do with the type of atmosphere that surrounds midterm elections. People just don't feel great about what's going on because of the way people are talking.

Steven H Van Wie 34:02

That's the truth. All right, number 10. A combination of property taxes and insurance costs erode real estate prices in disaster prone areas. Look out your window. You live in one, causing economic turmoil.

Joey Loss 34:20

That is a real factor. I think Florida home insurance premiums have risen an average of 20 or 30% the last several years in a row.

Steven H Van Wie 34:27

And then look at home prices in many places that doubled under Biden. And you put all those things together and the place becomes less and less affordable. You know, affordable is the word of the year for sure. And it's, you know, I, I got, I want to say something about this. We've got save our homes in Florida. So theoretically the maximum increase you're going to get every year is either it's the lower of inflation or 3%. Had my save our homes thing since it came in, I believe in the 90s and yet this year my property taxes went up 11 point or 11.7%.

Steven H Van Wie 35:13

And we didn't do any big stuff on the house. So I looked. Save our homes does not apply to anything but your valuation, your assessed value, it doesn't count the millage change. So St. John's county, in their infinite wisdom, what they do with the money, I have absolutely no idea. They decided they're going to raise, raise the millage rate. So I get an 11% increase in my property taxes. I was unhappy and I looked it up. It's perfectly legal. Save our homes does not mention it. So they did it and we got to live with it or not. I don't care so much about us where we've been on it so long, been in our house so long that the assessed value is still very reasonable. But new people, young people, people moving in, it's just, it's crazy how much Florida costs to live in now.

Joey Loss 36:16

Well, you think about what percentage of Americans. You know, let's say they. Here's the story you want. You've got somebody who worked their whole life, they paid off their home, they live somewhere and they don't have a mortgage payment. They live probably primarily on a pension or Social Security or savings or some combination of the three. And a lot of that income grows at what, every year? Cpi. Right. Or whichever version of CPI is most convenient for the government to select for that that year. And I promise you it's never going to be 11%. And so you're shrinking the purchasing power of these retirees every year that this type of stuff happens. So I think that's a big one.

Steven H Van Wie 36:53

Yeah, agree. All right, back to you.

Joey Loss 36:55

All right, so this is my last one. I think I probably crossed one off as you went through one that was the same. So my last one is jobs data and inflation. Recent jobs data has been moderately healthy and CPI is below 3%. The Fed as we know, says neither of those is good enough. We're in that 4.5 or 4 to 5% range on unemployment and CPI is below 3%. Those should be good metrics by long term historical standards. They are very healthy metrics. By last 10 to 15 year metrics there not good enough according to the Fed. So I think we just need to keep an eye on them. It's going to keep shifting around as things move and technology kind of shifts the landscape a little bit. But I'm optimistic that they should stay healthy.

Steven H Van Wie 37:37

I wanted to do one that's honorable mention. And then we'll get to the coup de grace, the Supreme Court. There might be a couple of retirements, one or two retirements this year. It's always dangerous when one of the more reliable conservatives we're talking about, the two most reliable conservatives could go. And when you bring in someone that seems to be a really good pick, it doesn't always turn out that way. We've had evidence of that in the past few years. Not everyone is as reliable as we might think. They actually think for themselves some cases and they certainly vote all by themselves in some cases. It's Always a bit scary. The good news of that would be as these guys are getting older and you never know who's going to be there to pick the replacement if they just are suddenly ill or die. So having some predictability is probably a good thing. And I would imagine that Trump is keeping a list of replacements right now. He's got a guy who's kind of a specialist on this. They don't talk about it much, but you can bet they're there. And this, this one kind of scares me. And I, I would miss in, in particular, I miss Clarence Thomas more than anybody, just because he's been such a rock hard, conservative, solid, and I once got to treat his wife to a glass of wine. It's kind of fun. All right, Bob, I'm going to pick this up in a second. I wanted to give my last one because it's the most important one to me. China decides to annex Taiwan.

Joey Loss 39:11

No, that's neat.

Steven H Van Wie 39:26

Good morning, Bob.

Bob 39:27

Thanks for doing that, guys. I mean, you could hire me as program director, I guess.

Steven H Van Wie 39:29

Well, thanks for the idea.

Bob 39:37

Unbelievable. So, so thoughtful. And you guys really thought all that through. I mean, unbelievable. And you know, a lot of these things could make the market go up or down. It's not, it's not a one edged sword. Don't have the 10 things that were double edged.

Steven H Van Wie 39:46

Yeah, exactly.

Steven H Van Wie 39:50

No surprises.

Steven H Van Wie 39:54

Absolutely right.

Bob 39:56

Yeah. So, enjoying the program? We're just cooking eggs here and getting ready. We're actually going into Jacksonville, so.

Joey Loss 40:03

Okay.

Steven H Van Wie 40:04

I already cooked your eggs this morning.

Bob 40:07

Uh, oh, well, we'll have to see if we can find some.

Steven H Van Wie 40:12

Do you want to take a shot at the trivia? You got any ideas?

Bob 40:16

I missed it. I was working at the dishwasher when we had an incident with the dishwasher. So I was, I was distracted. What is, what was the trivia?

Steven H Van Wie 40:24

We were promised a major.

Bob 40:27

What? You know what I'm gonna say?

Bob 40:30

Internet for people in the country.

Steven H Van Wie 40:33

It's a good one. But that was a lot of people.

Bob 40:36

In the country and we have Internet out here now, so.

Steven H Van Wie 40:39

Great. Is it Starlink related or.

Bob 40:42

No, it's not. This is 5G

Bob 40:47

Wired. And it's unbelievable. Our kids, who as you know what our daughter does, they can, they can download and send out unbelievable large files. The Internet is fantastic.

Steven H Van Wie 40:58

Cool. No.

Joey Loss 41:00

Well.

Steven H Van Wie 41:02

You want to listen to the answer to this thing because I don't have time to.

Bob 41:05

I'm listening.

Steven H Van Wie 41:07

In 2017, Elon Musk told us that he would have a driverless car go across the country. It happened a few days ago for the first time. A guy left. He. A guy left the Tesla diner in Los Angeles. Great start. Right. And went to Myrtle Beach, South Carolina and never interfered with the car driving itself. He has, he has 10,000 plus miles on that car that he has not driven once during that whole.

Joey Loss 41:18

Wow.

Bob 41:20

Wow.

Bob 41:42

Wow. Wow. Unbelievable. Well, that's tech related, that's for sure.

Steven H Van Wie 41:46

Eight years among friends.

Bob 41:48

Yeah. Yeah.

Steven H Van Wie 41:49

But I'll tell you, I'll tell you one more thing. Going to be a cold day in Jacksonville when I get in a driverless car.

Steven H Van Wie 41:58

I don't even want one on the road with me. Thank you.

Bob 42:00

If you, if you go to a financial advisors convention, you may end up having to ride in a driverless car.

Joey Loss 42:07

That is a fair point.

Bob 42:09

I think. I think Joey's already done that. I think from conversing with him, we haven't.

Joey Loss 42:14

But my wife and I are going to check on the chaotic state of New York City in February for Valentine's Day, so. So we may bring a flak jacket with you. Yeah, I was looking up like, you know, self defense rules and stuff and you can't, you can't do anything. No, you're just walking.

Bob 42:30

You cannot carry.

Joey Loss 42:32

Yeah, you can't do anything.

Steven H Van Wie 42:33

So you're, you're banking on the fact that he won't have enough time to completely ruin the city in only two months.

Joey Loss 42:39

But hey, at least I won't be burdened with a human driving the car we go to dinner in. So there you go. There you go. You win some, you lose.

Bob 42:46

Yeah, that's true.

Steven H Van Wie 42:47

All right, happy new year, Mr. Bob. And we'll, we'll see you soon.

Bob 42:51

Okay, we'll see you soon. Talk to you.

Steven H Van Wie 42:53

Bye. Yeah, I have great reticence, I guess about. I've got a kid who wants to go to New York too.

Steven H Van Wie 43:04

This could happen so fast up there. Probably won't, but it could happen so fast.

Joey Loss 43:09

The good news is we'll be, we'll be in the hoity toity part of Manhattan for most of it and going to Broadway shows and stuff.

Steven H Van Wie 43:15

That's where the target shooting takes place, doesn't it?

Joey Loss 43:19

Maybe.

Steven H Van Wie 43:21

Yeah, we'll see. You know, a lot of the really wacko things still require approval from the legislature and so on. So we'll go into it with the least amount of pessimism that old people can look at. All right, well, happy New Year to everybody. I'm sorry. Glad you, you were able to look in. We'll be here again next week and Adam will be back. We'll see you then. Happy New Year. This is the Van Wie Financial Hour.