March 21st, 2026 - Market Pain with a Silver Lining

On the Van We Financial Hour, Steve and Joey dive into a turbulent financial landscape. They discuss how global markets are shaken by energy shortages linked to the Iran war, as well as volatility in U.S. indices. Amidst doom and gloom, they highlight optimism with positive market indicators and a surprising number of new billionaires.

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 0:06

And I'm Joey Loss.

Steven H Van Wie 0:07

And that silence you just heard was Adam who is out of town and will be rejoining us next week in his son are doing a little spring breaky stuff because not gonna have many chances to do things like that pretty soon when they're off to college. So Joey and I will pick up the pieces of what's left of the market and the people today. And let's see, how should I put this nicely. Mama said there'd be weeks like this. 

Joey 0:36

Yeah.

Steven H Van Wie 0:37

Anyway, to all the regulars, thanks. Keep coming back. As long as you keep listening, we'll keep talking and if you're new to the show, try to listen for the whole hour. If ever anybody needed to know more about financial things in the markets than a period like this, I don't remember when it isn't exactly the great financial crisis. What we've got going on is temporary, but it's enough to rattle a few cages and I'm sure it has. So I'm going to let Joey dig into that and we'll see what we can salvage out of the whole thing.

Joey 1:12

Yeah, I mean this is definitely one of those periods where you remember what it takes to get the growth that you enjoy during good periods as an equity investor. So reviewing what's going on. Global indices plunged into extreme oversold territory this week as the realities of energy shortages driven by the Iran war start to sink in. The only markets in near overbought territory are Taiwan and Korea, whose buoyancy is driven largely by AI fueled chip stocks. The S&P 500 and Nasdaq both broke down this week, peaking below their 200 day moving averages for the first time in quite a while. The technical backdrop does not look good for either of those indexes at the moment. The S and P is in a 6.7% drawdown and the mega cap tech heavy Nasdaq 100 is down 8.5%, quickly approaching the 10% correction threshold. It's worth noting that both of these indices are possibly one truth social post away from a sharp reversion as we learned last year during the tariff episode. But for today, the technicals don't look great on either front. The two bright spots across all geographic or sector based indices are oil and energy, which are up 70% and 32% respectively year to date. Meanwhile, oil and energy prices are the primary concern of every other market globally. While there's no doubt rising energy prices will have worse effect on countries that can't produce their own petroleum fuels. The supply shortfall and price effect is large enough to affect just about everyone else. Throughout the week we saw headlines noting bombings of various oil and gas fields and production facilities throughout the Middle East. Given the closures in Hormuz, it might be worth asking, why isn't crude oil even higher than the mid-90s range where it's remained comfortable over the last few weeks? Well, one reason for that is because spreads between US Crude benchmarks like the WTI and global crude benchmarks have widened. While the Trump administration said this week it would not institute a crude export ban, US Crude oil traders seem reluctant to plan oil exports in case such a ban appears. This has kept US Crude prices cheaper while global crude prices are rising at about $1.85 a day. Walking through this week domestically, the best day of the week was Monday. This was followed by a mostly sideways Tuesday, and then things pretty much turned downward from there. Wednesday was by far the worst day, with the Dow sliding 1.6 1.6% following a hotter than expected PPI report for February. That day also yielded a Fed announcement that rates would hold steady at the 3.5 to 3.75% range. They delivered that news with a fairly hawkish tone that cooled any anticipation of rate cuts in the near future. Thursday and Friday maintained that modest downward momentum for midweek. Part of Friday's pain was in response to a revision of of the Q4 GDP report from up 1.4% to up 0.7%. The Bureau of Economic Analysis cut the results in half. Now, we had mentioned in previous weeks, I think Adam brought this up, that we were expecting some kind of downward revision, but this was significant. And most of the blame for the now meager Q4 results lands on the 43 day federal government shutdown From October to November of last year, this now 0.7% print for Q4 GDP growth blended with a 3.4% year over year PPI report has talking heads dropping the S word stagflation, which means low growth mixed with high inflation. Steve, I don't know about you, but it seems a little bit illegitimate to me to wave the stagflation flag when a quarter's success is halved by something artificial like, I don't know, the longest full government shutdown in US history.

Steven H Van Wie 4:50

It has simply to do, in my opinion, with 24/7 airtime, when you don't want dead air. So you put a bunch of people together and they start Talking, and then some idiot is going to come up with something that is completely and utterly irrelevant. First off, we're not in a true inflationary period. Quite the opposite, in fact. The inflation we have is being caused by the spike in oil, which is going to despike very quickly. I can't tell you what day we get mixed feelings on that and we get mixed news on that. They're sending Marines over there, so the first person will say boots on the ground. I tell you how to lose an election in boots on the ground. Four words. It's a guaranteed loss if they put boots on the ground in the Middle East. My professional opinion, which is worth what everyone is paying for it right now, which, unless there's something I don't know, is a big zero anyway. The more people talk, the more time there is. The more people talk, the more people talk, the stupider they become. This is not about an inflationary period. It's not about a stagflationary period. Companies are doing fine. 36,000 private sector jobs are being created every month. Still, we're not going backwards, people. We're going forward. When this blip comes out of it and everything falls, the market's going to turn around and be very happy. And they'll look back. And the thing that bothers me and always has is that not one of them will be asked for an apology.

Joey 6:34

Right? Yeah. And I have some positive news in the light of all this darkness I'm casting right now. 

Steven H Van Wie 6:39

Good.

Joey 6:40

But until I get to that, a little bit more darkness for you. 

 Steven H Van Wie 6:42

Okay.

Joey 6:43

Obviously, we're in another partial government Shutdown. This time DHS focused, and it's in its 36th day, leaving over 100,000 workers without pay. And anybody who's been to an airport or knows somebody that's been to an airport has either complained or heard complaints about the fact that this is going on.

Steven H Van Wie 6:57

Did you hear the proposal this morning? Elon Musk is offering to pay their salaries until it opens up.

Joey 6:59

I did not.

Joey 7:04

Is he making a shoot for office somewhere? Because he's doing a lot of these.

Steven H Van Wie 7:08

Well, not present. Because he wasn't born here.

Joey 7:10

Yeah, can't do that. But there's plenty of others.

Steven H Van Wie 7:12

But to me, it's just so. What's the word I'm looking? Frustrating. I guess Elon can step up. Remember in the last one, a friend of Trump's came in and paid salaries, and then we had the big donation that came in from the Dells, and now Elon's saying, well, I'll pay their Salaries if you guys won't do it. And I would just look him in the eye and say, thank you. Here's how much of a check we need, and here's where to put it. So these things are not unsolvable by any means. And we just, we can't lose because we can't let government employees get doxed and shot and threatened and all that stuff. So they got a. They got to wait somebody out. Meanwhile, if our people start getting paid again thanks to Elon or whatever, and we'll reimburse them. I thought that was just as clever and, and, and quite frankly, patriotic as anything I've ever heard.

Joey 8:16

Well, it's interesting if, if you, you know, if you're the opposing political force and you hate the populist wave, stop creating vacuums where these guys can come in and be superheroes because they've proven they're going to do it. And people are going to appreciate it. So you're just giving them a pedestal.

Steven H Van Wie 8:28

Yeah.

Steven H Van Wie 8:32

But you know what? You can't apply all that common sense and intelligence. You're talking about Congress.

Joey 8:37

Yeah, I don't know what I'm doing.

Steven H Van Wie 8:39

We've got to take a quick break. We'll come back. And much more on the market Rep where we were talking right before we came on air. But this is going to be a long, difficult market rep. There's just so much going on. So we'll get it shortly. Stay here. This is the Van Wie Financial Hour. 

Steven H Van Wie 8:57

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

Joey 8:59

And I'm Joey Loss.

Steven H Van Wie

And I do have a trivia question as usual, brought to you again as usual by Paul Lloyd at First Coast Alarm. You can call Paul at 904-636-7888. Because there's so much gloom and doom in the air right now. I chose a happy one, I think, or most of us, anyway. How many new billionaires did the world economy create last year? First year of the second term of Trump? How many new billionaires worldwide? And I'm going to give you exactly zero clues. So take a look.

Joey 9:39

That's a good one. I have no idea what the answer is. That's a good question.

Speaker 1 9:44

All right.

Steven H Van Wie 9:44

No clues.

Joey 9:45

So to wrap up the market. Wrap. Um, last thing to talk about is housing. And then I've got some good news. So. But, but it doesn't start. Good housing is not great. So new single family home sales declined 17.6% in January to a 587,000 annual weight rate. This is well below the consensus expected 722,000 sales are down about 11.3% from a year ago. These sales for January fell across all major regions. They were not concentrated in certain parts of the country. The month supply of new homes, which is how long it would take to sell all the homes in inventory, rose to 9.7 in January. This gain was driven by both a slower pace of sales and a 2,000 unit increase in inventories. The median price of new homes sold was 400,500 in January, down about 6.8% from a year ago. And the average price of new homes sold of new homes sold was 499,500, down 3.6% versus last year. These results look scary, but we wouldn't get too concerned about them. Unusually severe winter storms across the country kept buyers at home. And again, I think with, with rates sort of artificially spiked due to what's going on, you're seeing a bit more buyer apprehension. The cost of owning a home has artificially risen again thanks to rates.

Steven H Van Wie 11:02

And I have a companion piece to that right here in my left hand. The date is March 11th and it is 2026. It's from Breitbart. Existing home sales unexpectedly rose in February as affordability hit its best level in nearly four years and first time buyers surged into the market. You know when you get conflicting news, it makes you a skeptic.

Joey 11:30

Well, this was January, so I'd actually, it actually doesn't shock me that February would be sort of a whiplash effect.

Steven H Van Wie 11:35

Oh yeah. And December they Revised down from 1 point something to 6.8. Okay, so if there, if it is actually coming back right now, the, the Iranian thing started on the 1st of March I think. Right.

Joey 11:52

28th of January 28th. Yeah, February. Sorry. Yeah. So the February sales were pre rate spike because we had just touched below 6% right. On the 30 year. So that all checks out.

Steven H Van Wie 11:54

February.

Steven H Van Wie 12:05

Yeah, I'm going see. I'll be curious to see what the follow up on this is when the numbers are put out for March. It's just something I thought I'd bring up. Not everybody will talk about those things.

Joey 12:15

So for now the 30 year mortgage is above 6% again and in some places, you know, mid sixes and it had touched below six. So it's not a surprise to see hesitation from the buying side. People are trying to figure out what's going on. They're also paying more for gas, which has a whole psychological effect on the consumer.

Steven H Van Wie 12:33

All true.

Joey 12:33

All of this sounds pessimistic and it might sound like we're pessimistic, but we're just trying to walk through the data as it stands today. And it is murky out there and riddled with circumstantial downward pressure and circumstantial. I'm underlining six times there. We joked earlier this year that because all 20 major strategists were bullish and expected an average return of 9% for 2026, that we should expect some heavy turbulence. And it did not take long for that to pan out. But there are two potential positives working for you right now, and that's what I want to leave you with. One, the American association of Individual Investors survey revealed that bearish sentiment has now risen to 52%, much higher than it's been anytime recently. And historically,

Joey 13:15

historically, when investors get this pessimistic, the s and P500 is up 16% a year later. So just keep that in mind. That is a big contrarian indicator that we kind of love to see. And then number two, most of those 20 major strategists actually remain optimistic despite what's going on with an implied projected gain of 12 to 14% in the S and P through the end of the year. From where we stand today. Now, that's either good or bad news, depending on your faith and their work. But we've got two signals that I think create some positivity and just a sense that I have. Steve, I'm curious for your thoughts, but the market feels like it really hasn't gone down that much for what is going on. And to me, it feels like the second there's a slice of good news, you see gains. And to me, it's like once this smoke clears, there's all these other things going on just beneath the surface of the market that are not making headlines, that are going to just raise the boats again. That's where it feels like we're at, at least from my perspective.

Steven H Van Wie 14:10

Tax refunds, for instance, are just starting to come out and they're bigger than before. So there's going to be a lot of consumer spending going on, although some of it, unfortunately, is going to have to cover the higher prices at the pump and things like that. But I'm anything but negative, except on analysts and idiots, which are often overlapping. Never know one more thing. On the Friday or on the market, Friday was triple witching day. And for those of you who don't know, that means stock options expire, stock index options and stock index futures all expire. So right at the end of the day, On a triple witching day, which happens four times a year, you will see a massive amount of trading going on as people either opt in or don't or satisfy their contracts, whatever. And just for a little historical perspective, you used to hear the term quadruple witching day a lot. And that involved all of the above, plus single stock futures. But over time, until about, from 2002 to 210, it was generally called quadruple witching. But the single stock futures never gained a lot of popularity and they kind of don't have any liquidity and there's not much interest in them. So they've kind of just gotten away the dodo bird and we're down to triple witching, which I think is easier to say anyway. Yeah, I agree. So just a little something, but it does mean that a lot of yesterday's volatility and downward pressure was, was resulting from that. In fact, usual volume of the major indexes was more than doubled yesterday. And in fact it was Thursday and Friday was both more than double. They add them all up and you really got something. So don't let that ruin your day, as I say. All right, where do we go from here? You tell me what day there will be a resolution in Iran and I will tell you what day the market turns around. And I will do that. I promise. I will do it right after it happens. Yeah, first Saturday, after. I'll tell you everything. All right, enough of that. There's a lot of. I got some bad news stuff and some good news stuff, too. And I know Joey's got a few things. You had some good, good news stuff

Joey 15:39

It sounds better.

Joey 16:28

Yeah, it sounds good.

Joey 16:41

that was really just the, the end of that market rap. I've got some interesting news stuff, but maybe, maybe let's give some people some good news if you got it.

Steven H Van Wie 16:44

That's.

Steven H Van Wie 16:49

All right, let's dig through the stack and look for a good one.

Steven H Van Wie 16:58

Boy, they're getting slim out there. Here's one.

Steven H Van Wie 17:04

I'm going to put this in the. Discuss it. Not the good or bad. It's kind of funny. It shows you if you're nerd enough, you can get a joke out of almost anything. So Morningstar, a lot of people know who they are. Very big research outfit out of Chicago. I believe they've been around a long time. They're very well respected. Well, they. Again, to the old 4% rule. Adam and Joy and I are pretty comfortable using the 4% rule. What that is, it means that in retirement, take your invested assets and we're pretty comfortable if you withdraw 4% a year based on the balance at the end of the previous year. And it's been poo pooed a lot. And you get people like Dave Ramsey saying you can double that because you're going to run out of life anyway and you're not going to run out of money. Well, I think that's as ridiculous as saying anything else. He's, he and, and Susie Ormond are kind of goofy lately. Going to check when their birthdays are. But anyway, anyway, Morningstar dug into this 4% rule big time and they concluded that it was wrong. The real number, says Morningstar. Y' all better sit down for this because it's really wild. It's actually 3.9%.

Speaker 1 18:33

Oh boy.

Steven H Van Wie 18:34

I hope they didn't expend a lot of effort and money coming to that conclusion.

Joey 18:41

The only thing I hate about these percent rules is everybody's got a different goalpost and they're not putting disclaimers on it. So for us, when we say 4% rule, we mean you can probably. History suggests you can withdraw about 4% a year and your portfolio over a long period of time will either stay flat or grow. That is a different goalpost than what Dave Ramsey said, even just by what you shared, which he's saying spend it all. If you want to spend it all down before you die, you can go as high as 8% or something. I mean, it's a different goalpost, but people love to throw these back and forth but, but be talking about completely different things.

Steven H Van Wie 19:15

And you know what really makes a lot of difference in that Withdrawal rate rule asset allocation. If you're the kind of person, I'll take you on a little historical trip. When I bought my first manufacturing company, I was 28 years old, it was in 1978 and they had that. This little company did not have a union, which was, they did have a union, but they didn't have a union pension. And the union was always okay with the profit sharing. And we had a 10, 10 person management or something like that. And the rule of thumb was we, we fed the profit sharing plan every year and when one of our managers would hit 60, he'd move it all to the money market. And then at 65, they would put it into an annuity and live happily ever after. And that system worked tolerably well for a long time. And part of that is because life expectancy was a lot less back then and you could actually probably live off of the. We had good money market rates and that kind of thing. But as time went by and people started living longer, rethinking the get out of the market when you're 60 thing has gone a long ways. I'll pick up on this right after the break. So don't go anywhere. We'll be right back. This is the Van Wie Financial Hour. 

Steven H Van Wie 20:43

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

Joey 20:45

And I'm Joey Loss.

Steven H Van Wie 20:46

And I'll remind everybody that lines are open. 904-222-8255. Trivia question is out there. How many new billionaires did the world economy produce last year? And I think you'll be pleasantly surprised. All right. We had a little discussion going here and there about things like asset allocation and with with life expectancies, which is, by the way, a very misunderstood thing. We'll talk a little more about life expectancy. But with life expectancy rising from I think when I was born it was about 57 and now it's in excess of 73, you have to rethink the whole concept of retirement is if you're going to retire at 65 and you're going to be lucky to get there and you're probably not going to live much beyond that, then you don't need to worry about your asset allocation. So in the what I call the intervening years when things were starting to get better with investing and longevity and all that, people got a little bit, I don't know, afraid, I guess, of running out of money. So when we got into the first got into this business, I used to counsel people with a very simple concept. The day you turn 65 and you've been working with us for years and your account's probably at its all time high or close to it, and you've been happy with your asset allocation, what would make you change that asset allocation? How about if I told you you're going to live for another 25 years, would you change your asset allocation? And most people eventually came to their senses and said, no. Good. Don't buy an annuity and don't change your asset allocation. Start an orderly withdrawal, 3.9% or 4, excuse me, I just chuckle at things like this, but that whole transition has taken place in the 21st. Four years that I've been 25 years I've been doing this, and rightly so. But let's talk a moment about life expectancy. My grandmother, my mother's mother was born in 1908. Her life expectancy was about 49. She died at 100 years and three days. Life expectancy doesn't mean you're going to die. What it means, and it's calculated by the life insurance companies better than anybody else, what it means is if you take the entire pool of people born in a given year, their life expectancy means the median age. How many people will live past it? How many people will live less than that? When you start calling out the people who die young, you automatically slip up into a new bracket for life expectancy. So if you hit 60, for instance, your chances of going into your 70s are fantastic. If you hit 65, it goes a little further. If you hit 70, it goes a little further. And it keeps bumping up. So your life expectancy is not assigned to you at birth. The birth year assigns a life expectancy to the, the pool of people born. So when, when somebody comes in and they're staring at 65 or whatever, and they say, well, my life expectancy is only 73 or whatever. No, I, I disagree with that. I think it's probably much higher. And since it has been universally shown in all the years I've been an adult that there are two things that people fear more than death. One of them is public speaking. You can get over that, trust me. The other one is running out of money. What are you going to do about it? Well, a lot of things you can do about it, but one of them is not to get uber conservative with your money when you turn 65. That's just one of the benefits of working with people like us, because we explore those things. And I'll tell you also from, from our own internal numbers and clients have been around a long time. I can think of several clients who retired years ago, and their accounts are bigger today than they were on the date of retirement, which is exactly how we planned it.

Joey 25:14

Yeah. And it helps, you know, when we, that's where the planning comes in. Right. Like we, we talk about cash flow, we talk about what's safe. And wouldn't you know it, if you, if you live within that safe area, you can. You run a good chance of seeing a future account balance that's higher than when you started.

Steven H Van Wie 25:29

Yeah. And you know, when you consider a little inflation here and there, then you really understand why putting it in a fixed rate thing is just not right. The other part of that is the interaction of Social Security and, and annuities. When it used to be when you got a pension, it was a pension for life. You had lifetime income. Well, find me a pensioner now and I'll show you somebody who works for the government. And I wouldn't trust them as far as I could throw them either. But nowadays,

Steven H Van Wie 26:03

since we made the switch starting in the 70s over from pension to profit sharing plans, in other words, from defined benefit, meaning here's how much you're going to get to define contribution, meaning here's how much you're going to put in. When we started that, then all of a sudden the risk of retirement income got thrown over to the employee. That was never talked about. What was talked about was you get a quarterly statement, you can see your own account balance, that you never could get that with your pension. And everybody loved it. The companies, of course, no longer had you on the rolls for life, so they were thrilled to death to get rid of that. So the problem then became, do I have enough lifetime income? And that changed a lot of things. But it didn't change anything more, didn't impact anything any more than the annuity business. People say we hate annuities. No, we don't hate annuities. Now there are some people, some financial people right here locally who run commercials about how they hate annuities and they wouldn't sell one and they wouldn't buy one and all that stuff. Well, you can't say that. You can say it if you want to, but it doesn't make you smart. What if a client comes in and they've got a good sized account and a small retirement fund like Social Security, that's an annuity. And they say, well, what should I do? Should I buy an annuity? And the annuity people they talk to always say one thing, how much money do you have? And you tell them, they say, well, that's the size annuity you ought to have. That's not true at all. Years ago we met a fellow named Stan, the annuity man, who changed my perspective. And I think all of us who've dealt with him and all of us who've dealt with us changed the perspective of all that. The annuity solves the problem. The problem is very simple. I need X amount of lifetime income and I only have this amount. The annuity fills up the difference after that. Now you just freed up the rest of your money to become a more aggressive investor. So what do you get? You get less risk on the downside and you get more return on the upside. It just makes sense. But that's what happens when you try to generalize in a business. That's not good for generalizing and people do it anyway.

Joey 28:32

Yeah, well, we haven't even touched on the tax framing of all of it. Right. So, like, there are certain annuities in certain situations that make for a much better tax experience for a retiree than others. And that tax flexibility is worth so much more than you could put on a performance report. And that's why most of the time a situation says, you know, maybe an annuity doesn't make sense here, but for the right situation, there's, it's hard to find a better tool than the right annuity for that person.

Steven H Van Wie 29:00

Because everything else runs out. 

Joey 29:05

Yep.

Steven H Van Wie 29:06

The. Excuse me, the Trump account. Most people know about him now, babies born in the. While Trump's in office those four years, they can open up what's called a Trump account and the government will give them a thousand bucks for sort of a starter. And then the family can add money to it also. And then it can't be touched till the child is 18. And the neat thing about that is it's not taxed for all those 18 years. When the kid turns 18, there's a very good chance that child will not be earning much money yet, having just gotten out of high school or whatever. The common sense thing to do is to take all that money and right up front, on the 18th birthday, do a Roth conversion. Now you've got something that can grow tax free and provide tax free income, and it didn't cost you squat, but you can add it along the way. Think what could happen. I just got a note from a client. You can. Like this. Just got a note from a client a couple yesterday

Steven H Van Wie 30:17

researching the history of the s and P500. Oh, okay. Wait, I'm going to interrupt. Oh, guess what? I think I know who this is. Good morning, Greg.

Greg 30:28

Hey, talk about timing.

Steven H Van Wie 30:31

Were your ears ringing?

Greg 30:33

Well, I guess they were. How about that?

Steven H Van Wie 30:35

That's, that's quite, quite amazing.

Greg 30:38

Yeah. Well, yeah. So the report that you're referring to, we were doing a little back and forth and I just thought I'd take a, you know, do some calculations on the s and P500. And had I taken my $5,000 of my first year tuition at Northern Illinois University and instead put that into the, into the S and P, it would be worth about today, in today's dollars, about, I think, $1.4 million. That's including, you know, reinvesting dividends and stuff like that. However, the inflation in today's dollars would actually mean that it was really in real dollars. Based on 1975, that would be worth about $240,000. So you know what? I, unfortunately, and I, I know you harp on this a lot that people should, you know, learn about finances and things, and they really need to understand that taxes is taxes and inflation is another form of taxes, an ugly one, too. But I want to take a stab on the question.

Steven H Van Wie 32:00

Yes, sir. Go ahead.

Greg 32:03

Is it 287?

Steven H Van Wie 32:07

That's a little low.

Greg 32:08

Okay.

Joey 32:09

Wow.

Steven H Van Wie 32:10

Yeah. This is good news. It's very good news. I appreciate your call and I appreciate your note, and I'm going to talk a little bit more about that shortly.

Greg 32:12

Fair enough.

Joey 32:14

All right.

Greg 32:21

Okay, thank you.

Joey 32:21

Thanks, Greg.

Steven H Van Wie 32:25

It's an interesting study. When you start getting into that, even before the taxes, then it changes. Don't go anywhere. This is the Van Wie Financial Hour. 

Steven H Van Wie 32:36

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

Joey 32:38

And I'm Joey Loss.

Steven H Van Wie 32:39

And I remind people, lines are open. 904-222-8255. That's every line except this one. Good morning, Ron.

Ron 32:49

Good morning, gentlemen. How are you today?

Steven H Van Wie 32:51

Excellent. How are things in Georgia?

Ron 32:54

Very, very, very nice. Beautiful day.

Steven H Van Wie 32:56

Wonderful. Love it.

Ron 32:58

I just want to warn Adam he better be careful about taking days off here. A guy named Wally, Wally Pip, that took a day off for the New York Yankees and first baseman named Lou Gehrig took his place. Well, I don't think Wally ever played again. Joey's doing a great job.

Joey 33:18

I appreciate that.

Steven H Van Wie 33:20

You might have. Might have noticed over the last year or so, he's kind of a natural.

Ron 33:25

Yes, he is.

Joey 33:26

Being a natural involves a lot of guidance off air, so I appreciate that.

Steven H Van Wie 33:30

It's true, too.

Ron 33:31

Oh, very good. Well, I won't hold you long. I was just going to take a shot at the trivia question.

Steven H Van Wie 33:36

Be my guest.

Ron 33:37

Got a guess here of 250.

Steven H Van Wie 33:40

287 was low. So I'm going to give you a second chance.

Ron 33:44

Okay. I'm sorry, I obviously haven't been listening. Let's say 299.

Steven H Van Wie 33:51

299. It's still a little bit low.

Ron 33:54

Oh, I'll be darn. Very good.

Steven H Van Wie 33:56

Good news around the world, huh?

Ron 33:58

That is not. Not for me, necessarily, but for some people.

Joey 34:01

Yeah.

Steven H Van Wie 34:02

You know, they. Each one of them has a lot of impact on the world and on a lot of individuals. I asked my wife yesterday, how much income tax do you suppose Elon Musk's employees pay every year? You want to talk about a number?

Ron 34:14

Wow. That. Wow. Yeah. Yeah.

Steven H Van Wie 34:19

People don't necessarily consider all the ramifications if you're a jealous type and he's just got too much money. Yeah. He wants to pay the salaries of the tsa, he hires tens of thousands of employees. Don't give me any gas about Elon's money. Yeah, I just.

Ron 34:38

Most. Most of them are very good finance people. I. Yes, they're very, very, very good at that. And they don't. And you never hear about it.

Steven H Van Wie 34:46

Yep. I agree.

Steven H Van Wie 34:49

No, that's true, too. It doesn't fit the narrative for some people.

Ron 34:54

Well, listen, I'll let you get back to your show. Thank you very much. Have a great day and take care. Always a good show. Appreciate you guys.

Joey 35:00

Appreciate you. Thanks for calling.

Steven H Van Wie 35:04

That is the whole thing. The jealousy thing is always a problem. And anyway, back to the Trump account. So Julie and I were talking during the break, and it's kind of interesting because we both had instant reactions to the announcement of the Trump account that were giving it the benefit of the doubt. I would say tenuous. Yeah, I think we were leaning a little bit like taxpayer money to individuals like that. But the more I think about it, the more I read about it, the more appealing it gets to me. What if every kid had an account like this invested in the American economy and the stock market, and parents could add or the kid could add or whatever, and it does turn into some money, like we did with Greg's calculation, it wouldn't be that long because it's 18 years. But what if it started to get up around 10 grand by the kid time the kid actually noticed it, or the parents, and then from there on it takes another step and maybe it gets to be 20, 25, 30, and the kid gets kind of interested in the whole concept and the whole practice, and then learn a little bit more when you turn 18. Now, you could turn that into a Roth IRA and step it outside the tax world. And since you're not making any money, your tax on the balance would be nominal, if anything. And all of a sudden now you've really got an asset and it can be used for things like buying your first home, stuff like that. I think if you look at the woeful ignorance of the average American when it comes to personal finance, that's changing a little bit now, thanks to people like Florida's governor, they're getting it back in the schools again. And the more people know and the more they see and the more they understand the power of compounding, then I think the better off society is. So I've really backed off on my. My negativity when it comes to starting these accounts.

Joey 37:17

Yeah, I have no problem with their existence. And I actually, I agree with you, I love the element of getting more people to play the game and just the element of like, they can't do any. It's a minor. They can't do anything with it for 18 years. They're forced, and it's forced to be in some sort of major market index. That means they've got nothing to do but watch how the market works. And that is the best testimony for being a long term investor that there could be. I think my challenges and reservations were primarily around the tax framing of that compared to something like a UTMA or a 529, which has better tax benefits for their intended purposes. But I think at the end of the day, just like anything else, back to education, you can. You got to use it the right way.

Steven H Van Wie 37:57

And it almost can almost negate that because of the Roth IRA thing.

Joey 38:04

Yeah, I think that's right.

Steven H Van Wie 38:06

Good morning, Bosco.

Bosco 38:08

Good morning, y'. All. Out here, I'm in the auto salvage picking yard having. It's like a boy in a candy store out here.

Steven H Van Wie 38:18

Well, have fun. What's happening?

Bosco 38:20

Look, I want to take a stab here at your contest, okay. And I was going to go for. Oh, heck, I was going to go high, and then I saw the low and I thought, well, yeah, why not 425?

Steven H Van Wie 38:34

Ooh, little high. A little over my range high. But you're certainly creating the bracket that we all know and love.

Bosco 38:45

That's right. That's right. All right. Yup.

Steven H Van Wie 38:49

Well, enjoy this beautiful day and we appreciate your call.

Bosco 38:53

You betcha, Wago. Now, take care.

Steven H Van Wie 38:59

Okay, so now I want to jump back to the Trump account for a second. In his inimitable style, guess what Gavin Newsom is proposing.

Joey 39:11

What'd he say?

Steven H Van Wie 39:12

He wants California to tax Trump accounts.

Steven H Van Wie 39:17

What is the number one way to ruin a very good proposal that has anything to do with money? Tax it. If you want less of something, tax it. If you want more of something, don't tax it.

Joey 39:32

What part of it do they want to tax distributions? Because I would assume that that's already going to happen. He's just bringing a headline to it for no reason.

Steven H Van Wie 39:41

He wants to treat it as tax deferred accounts for state tax purposes. In doing so, California is purposely making it difficult for families to fully utilize Trump accounts.

Steven H Van Wie 39:53

I don't know. Shake your head, bang it against the wall.

Joey 39:58

I may be misunderstanding, but honestly, it sounds like it would just be taxed the way I'd assume it'd be taxed anyway, which is if you're in a state with a state Income tax, any IRA type distribution, which is how these Trump accounts are treated, eventually would involve a state tax for the income. So if he's just bringing a headline to what would already happen and making himself look bad, then oops.

Steven H Van Wie 40:18

Well, if the Franchise Tax Board refuses to conform to the new federal tax rules, California families will now pay taxes on their children's investment earnings. Is there no amount of people's money that these people are unwilling to take? And yes, that is a rhetorical question. You don't need to even call. And we all know. So the Kiddle technically owe state income tax on their account earnings each year.

Joey 40:45

Oh, okay. That is different. That's dumb. That kind of blows up the whole lesson. That's about it. It's $1,000. Come on.

Steven H Van Wie 40:47

That is different.

Steven H Van Wie 40:53

Yeah, and like I said, there's no amount of money.

Joey 40:56

They will just let it do its thing and let people learn from it. Steve, I have one thing I wanted to touch on. I wanted to get your opinion on this. Did you see that the SEC is proposing that a regulator at the SEC is proposing the elimination of quarterly reporting requirements?

Steven H Van Wie 41:11

I did not.

Joey 41:12

So there's a proposal in process that will soon go for public comment that would remove the quarterly reporting requirements. And for context, this has been done in many European countries. It's been done in the UK in like 2013. They now only have to report semiannually. Many companies still choose to report quarterly, but that is on the table.

Steven H Van Wie 41:36

My intuition says bring it on. I think that part of the problem with a lot of investors is they get too much information. Quarterly is, you know, look at it from our standpoint. When we go into earnings season and we start to report it, it goes on for maybe four shows. We'll talk about it, and then it goes away for 10 minutes, then it comes back because the next quarters are already. That's the way it seems from my standpoint. I think TMI might be involved here. Edna, what's your opinion?

Joey 42:12

I think I agree in the sense that I'm very confident that within a few iterations of a different cadence of reporting that the market would figure out how it works and the investing experience would be largely the same. But I'm unusually fiercely defensive of the US's position as the premier market in the world. And there are many things that make us this way. And one of the benefits we get is that US companies that are successful trade at higher multiples than similar companies in other countries. One of those reasons is undoubtedly our regulatory landscape, which there's, trust me, there's plenty of terrible regulation out there. But when it comes to SEC and public companies, we have one of the strongest, if not the strongest system that's out there. And, and to me, if you want to play the game in the U.S. tough cookies like this is the price to play the game in America and get those multiples. That's my initial reaction. The counterargument that I've seen is, well, maybe this, maybe if we loosen up reporting requirements, we'll have more companies going public because there's been a decline in the number of companies that have gone public. I'm not sure how convinced I am by that.

Steven H Van Wie 43:18

The Wilshire Index, which is supposedly every traded company, has fallen from something like 7,700 to 3,800 companies over time because of the mergers, acquisitions, privatizing and so on. And I, I would rather see more choices out there. Also, I could, you know, put me on the debate team and tell me what side I'm on.

Joey 43:42

Yeah, I think the argument we should ask Adam next week. I think there's more to we should dig into there.

Steven H Van Wie 43:47

But you know, you're right about one thing. I think all the transparency is definitely a strength for the US Market. Well, you know, people are thinking all the time about all kinds of ways to do things differently and I'm glad of that. There are, I got a couple more. Oh, next week I think I'll talk about some of the millionaire tax proposals that are coming out across the country. Something to laugh about. All right. Well, thanks for listening, everybody. It's going to be a beautiful weekend. Go out and enjoy it and be back here next Saturday at 10:00 clock with us. Once again, this is the Van Wie Financial Hour.