May 2nd, 2026 - The Fed is Frozen... For Now

In this engaging Saturday morning radio show, financial experts Steven, Adam, and Joey delve into various economic topics, including a quiet Fed week, market updates, and exciting developments in tech and real estate. They discuss the implications of oil prices, interest rates, and wage growth while encouraging listener participation through trivia. With dynamic exchanges and insightful commentary, the hosts make complex financial matters accessible and entertaining.

Transcript

Steven H Van Wie 0:00

It's Saturday morning and it's 10 o'clock. That means this is the Van Wie Financial Hour. I'm Steve Van Wie.

Adam Van Wie 0:07

I'm Adam Van Wie.

Joey 0:08

And I'm Joey Loss.

Steven H Van Wie 0:09

Together again, all three of us. We're on a tear here lately. And of course, it's always more fun to come in and do the show when you've had a week that just kind of everything goes right. Virtually everything goes right.

Adam Van Wie 0:24

Yeah. I mean, it wasn't It was, it was a quiet Fed week is what it was.

Steven H Van Wie 0:29

It really was. And excuse me. One of the, one of the things I want to talk about today is I'm just going to mention it a time or two during the day. Some of the things that you wonder, since they were said by people who were running the Fed, you wonder how this country survived. They're that bad. Just a little something to look forward to today. And we'll have trivia and all that, but first I wanna welcome everybody back, all you regulars, you're the people that keep us going, you listen, we'll talk. If you're new to the show, found out about it anyway, accident or referral or whatever, stick around for the hour and I pretty much promise you that you'll learn something and it might even become useful. At some point in time, because there's a lot to talk about. So we'll get into that shortly. We'll have our usual trivia, and as usual, we'd love to hear from callers because, well, it makes the show more interesting, and it also kind of, you know, once you get going, it stirs other people to call in and talk, and it's just a lot more fun that way. But one way or the other, if you want to change the subject, the way to do it is pick up the phone down 904-222-8255.

Speaker 3 0:30

Yeah.

Steven H Van Wie 1:46

2255 or 222-TALK, make it easy to remember, and we will put you on. You can also, if you're reluctant to go on a live radio show, you can also send an email to info@striviswealth.com

Steven H Van Wie 2:04

and we'll pick that up. And if we don't get it during the show, we'll get it for next week. So no excuse to not get your questions answered. And there's no excuse not to hear every show because we will put it on our website on Monday. And if you happen to have missed it or needed to miss it for any reason, you can just go there and pick it up. So all that said, it was a very nice,

Steven H Van Wie 2:30

profitable and nice, I think,

Steven H Van Wie 2:34

whole week basically. I would like to come up with one thing that I would characterize the week and I really can't come up with any one thing. It's just kind of happened. But maybe Adam will get a little more thorough in it. So let's get his take on it.

Adam Van Wie 2:49

Yeah, I mean, no, you're right. I had the same struggles this morning when I was preparing my notes. It just kind of— not much happened. But that was good news because normally when the Fed meets and does an interest rate decision, whether it's a decision or no decision to move or not to move, it's, you you see volatility regardless because people are expecting one thing and some people are expecting something else, and then a different thing happens, and it just really tends to move the market. But this week we didn't see anything like that. Yeah, I think the Fed got trumped by Iran, but nothing really happened in Iran. No, that's—

Steven H Van Wie 3:25

although we keep expecting something to happen, it never really does.

Adam Van Wie 3:28

Yeah, I mean, the only news I saw was like, we— they proposed a deal, we turned it down, and that, that was about it. It just there wasn't a lot of news, and maybe that's a good thing. I don't mind these quiet weeks once in a while. It lowers my blood pressure.

Steven H Van Wie 3:43

Yeah, there are issues out there where all news is bad news, and that could be one of them.

Adam Van Wie 3:47

Yeah, definitely. So the market pretty much expected the Fed not to move on rates, and that's what it got. The one interesting thing that came out of the Fed meeting was that Powell intends to stay on the board

Adam Van Wie 4:02

post his chairmanship, which is very unusual. Um, normally when that happens, the president has asked for that to happen, and I can assure you that was not the case here. Um, he said it was because of the legal actions against him, which I don't think makes a lot of sense because those have all been— those are gone. Like, everything's been dropped. It's— there's no more legal actions pending against Powell.

Steven H Van Wie 4:25

So he's still under investigation by the Inspector General.

Adam Van Wie 4:30

But why would that require him to stay on the board? I don't— Okay, that just didn't make any sense to me.

Steven H Van Wie 4:32

it doesn't.

Steven H Van Wie 4:35

No, he just hates Trump with a vengeance.

Adam Van Wie 4:38

Um, the other interesting note from the meeting was that there were 4 votes of dissent, something that has not happened since 1992. Normally there's maybe 1 or 2, but this time there were 4. That's a really high number. So I think that just, uh, that Powell also said there's a ton of debate during their meeting, which I think all of those things just point to really uncertain times right now. You've got, uh, you've got inflation, you've got, um, uh, maybe an economy that's hurting, although when I get to the data later, it really doesn't look like that. Um, so I think there's just a lot of different opinions about where the economy sits today, and I think that's really being reflected in the— what came out of the Fed meeting.

Adam Van Wie 5:25

The market did end the week higher with the Dow up 0.5%, the S&P up 0.9%, and the NASDAQ adding 1.1%. International markets also rose about 0.6% with emerging markets flat, but developed markets gaining almost 0.8%. Commodities were up over 3% for the week, driven largely by the price of oil, which spiked up 8%. Gold and silver both had small losses. The bond market posted a small loss, of less than 0.4% as interest rates remain stubbornly high. And REITs are quietly having a good year after trading flat for all of last year. So keep an eye on that. That's interesting. Have a real estate data point that may back that up a little bit later too. Earnings this week did not disappoint, which was another reason the market achieved more all-time highs. The revenue beat rate stands at 74.1% and the earnings beat rate is at 78.3%.

Joey 6:21

Good night.

Adam Van Wie 6:22

Yeah, not bad. Uh, the 6.7% more companies are raising guidance than lowering. I don't think anyone would have expected those numbers going into this season.

Steven H Van Wie 6:32

Yeah, that's in the 88th percentile of all reporting periods.

Adam Van Wie 6:37

That's crazy.

Joey 6:38

And it's been elevated for a while. We've been saying, you know, at some point it has to revert to the mean. Well, we're getting further from it.

Adam Van Wie 6:43

Yeah, the last time this happened, I think, was '09.

Joey 6:47

Yeah, that's right.

Adam Van Wie 6:48

And, but that makes sense because we were coming off a low, low base. We had just lost 50% of the value of the S&P 500. Right now we're averaging in this decade, or since, uh, 2020, like 15 or 17% growth on the S&P 500. So to do that at this point in time is really incredible.

Joey 7:10

Yeah.

Adam Van Wie 7:11

I mean, companies are in great shape. That's, that's the bottom line.

Steven H Van Wie 7:15

The ADP tracking index, they issue their report once a month for jobs, but they have a tracking index that goes week by week. And according to them, the economy is averaging— the private sector economy is averaging 39,250

Steven H Van Wie 7:31

jobs a week added. Yeah, I actually— that's a good number.

Adam Van Wie 7:35

It's over 150,000 a month. If you, if you project it out. So, um, and to go with all of that, weekly jobless claims came in at the lowest level since the 1960s.

Joey 7:51

I was there.

Steven H Van Wie 7:52

Yeah, but you weren't.

Adam Van Wie 7:54

189,000 layoffs. That's nothing. Um, and then in Indeed's job posting, uh, index, it seems to have bottomed out. It had reached a pandemic-fueled high around 2022, 2023, and then it had been sort of just trailing off, but it really looks to have bottomed. So the overall employment picture actually seems pretty stable right now.

Joey 7:57

That's it.

Steven H Van Wie 8:17

It sure looks that way.

Joey 8:18

That's better than I would've bet.

Adam Van Wie 8:19

Yeah, me too.

Steven H Van Wie 8:20

I think it's better than anybody. And I tend to think these numbers are kind of accurate. I hope I'm right.

Adam Van Wie 8:26

I mean, if it's one number, okay, but when you look at the whole picture, It looks pretty stable.

Joey 8:32

Well, and if it's coming from ADP, I feel better about it than, yeah, you know, the government numbers which get revised all the time. Yeah, they normally process—

Steven H Van Wie 8:39

normally the first Friday of the month we'd be getting the government numbers, but since they haven't had time to put them together since yesterday was the first, we will get it next week. So we'll sort of verify next week what we think, right? All right, don't go anywhere, we got to pay some bills and we'll be right back. This is the Van Wie Financial Hour. Welcome back to the Van Wie Financial Hour. I'm Steve Van Wie.

Adam Van Wie 9:00

I'm Adam Van Wie.

Joey 9:01

And I'm Joey Loss.

Steven H Van Wie 9:03

And we have lines open, 904-222-8255,

Steven H Van Wie 9:07

where you can take a shot at today's trivia question, which is of course brought to you by Paul Lloyd at First Coast Alarm. Call Paul at 904-636-7888.

Steven H Van Wie 9:19

I want to talk about— we're just chatting a little bit in the break here about the, uh, The big tech places are kind of regaining their prominence in the market, and it's for all the right reasons. They're spending a lot of money doing a lot of investment that's going to really pay off big time. And plus, a lot of what they're buying, they're buying from home, and that's a good thing. So one of the things that big tech is leading to is what we've all heard about, the data centers that are going to just add massive amounts of requirements for the electric grid. So they're building not only data centers, but they're building power plants and so on. But my question, very simple today, how many data centers will be under construction in Texas during the year 2026? It's just a whole number, no boundaries yet. So if you want to start setting some boundaries, you're going to have to call in 222-8255.

Steven H Van Wie 10:16

All right. Back to the market wrap. There's a few more things to look at and to say.

Adam Van Wie 10:21

So, yeah, I think after a year of just complete disconnect from reality on reporting inflation, we actually have a little bit to worry about as of this month. So last year they've been like— the news has been complaining about inflation rates around 2.7, 2.8%, which is below the historic norm.

Adam Van Wie 10:48

And this time, because of the price of oil, we actually saw a number that is mildly concerning. Now, the PCE came in at 3.5%, so it wasn't drastically above that 3% historic normal, but the problem is that oil could stay high and that could cause that number to continue to go higher. And so I really think it all comes down to how long the Strait of Hormuz stays closed. If we can get that open in the next month or two, I believe that inflation will not be as much of a problem going forward. If that, if that does not happen and oil stays over $100, I think that we are going to be looking at higher prices for a lot of things that we buy.

Steven H Van Wie 11:33

And probably increasing interest rates.

Adam Van Wie 11:36

Yes, exactly. And that's why you're seeing interest rates stay high right now because the, the, and the, the threat is that they could go higher if that were to happen. Um, but also they could drop like a rock if the price of oil came down.

Steven H Van Wie 11:53

Yeah, this is actually not a technical inflation that we're in. It's an increased price level. And now you might argue that it's the same thing, but it's really not because it's an artificial stimulus that rose the price level. That stimulus could go away and they'd drop right back where it was.

Adam Van Wie 12:09

But I believe that if it stays— if like, if oil stays high for a year, I think it would be inflation.

Steven H Van Wie 12:15

Huge. Look at all the products it goes into. And the manufacturers would have no choice if this goes on another 6 months even. They're going to have to raise prices.

Joey 12:15

Yeah.

Adam Van Wie 12:17

Yeah.

Adam Van Wie 12:24

Think about it in the, in the difference between like, if you order a product and a company charges you a fuel surcharge because the price of fuel is high If they do that for a year, eventually they're just going to build it into the price of the product. But if that were to come down in 6 months, they may just drop the fuel surcharge and you end up paying less.

Steven H Van Wie 12:43

Yeah, we used to do that in 1980 and '81 when I first got into the stamping business.

Steven H Van Wie 12:50

Things were going up so much. Everybody remembers the inflation in that period. And we couldn't just across the board raise everything 10 or 20%. So we started the surcharge thing and we would send everybody the same pricing with a surcharge for metals that were going up, especially stainless had a really bad time. And then it kind of settled down and we kind of rose the prices little by little and it came down, the surcharge came down little by little, and then the whole thing shook out. And that's exactly the way I see this happening. It will result in a higher price level overall in all likelihood. Yeah.

Adam Van Wie 13:25

Yeah.

Adam Van Wie 13:30

I think. So that's not great news. But no, again, timeframe, shorter, better, longer, worse. So yeah.

Joey 13:39

And underneath that, part of the reason is the longer that prices are elevated, the more of these smaller producers of food or anybody else that's affected by it, they're going to go out of business. And then the supply starts to fall of all these other things. And then, you know, just economic theory, the price is going to have to go up and stay up.

Adam Van Wie 13:54

Yeah. When the supply gets constrained.

Steven H Van Wie 13:56

Right.

Joey 13:57

So like these larger companies, they can handle oil volatility because they have practices of buying oil futures that hedge against the changes in prices. Smaller outfits just don't have the bandwidth to do these types of things. So they get hit really hard.

Steven H Van Wie 14:08

Remember in the old days, remember the name Herb Kelleher?

Adam Van Wie 14:13

Yeah. Southwest Airlines.

Steven H Van Wie 14:14

Yeah. Kelleher was not only a funny guy, he was also a brilliant guy. And he's the one that sort of taught the industry how to contract for their fuel for the next 12 to 18 months early. And then when we had the big shock while he was still working, the big energy shock, they cruised right through it. They were the only airline in the country that made money every quarter. Yeah. What a guy.

Adam Van Wie 14:40

Speaking of airlines, RIP to Spirit Airlines. What a great move by the Biden administration to not allow them to merge with JetBlue. Yeah, that really good, good decision.

Steven H Van Wie 14:50

You know, those monopolies really get to you.

Adam Van Wie 14:52

Yeah. Monopoly with how many other airlines are there? Yeah.

Joey 14:55

Okay, I don't know. I don't hate that the Spirit culture didn't end up in JetBlue because I like it. It's like if Spirit— it's kind of like the Boeing-McDougal Douglas thing. Like Boeing got way worse once they— yeah, yeah, McDonnell Douglas, whatever it is.

Adam Van Wie 15:10

Yeah, that— I know, I hear you on that, but I, I just— I think more flights in general is better than less flights. Yeah.

Steven H Van Wie 15:13

the, the—

Joey 15:17

Yeah, I think that's true.

Steven H Van Wie 15:19

Adam, do you remember back in the old days, Midwest Express? Yeah. They flew out of Milwaukee and we actually lived just a very few miles from the airport. So they'd go up and you could see them leaving from our house. And every seat on the plane was basically first class. And everything about the airline was first class. They had the white tablecloths when they fed you and the food was real and there was real honest-to-goodness flatware. Everything was just classy as it could be. And then they got bought out and that stopped right away.

Adam Van Wie 15:50

Yeah, yeah, exactly.

Steven H Van Wie 15:52

You really wish you could merge into the good ones sometimes, but that's not why they merge.

Adam Van Wie 15:57

Nope, definitely not. But anyways, a lot of people are stranded without flights. And I did read that you can get your money back through your credit card company potentially. So you probably won't get it back from Spirit because there won't be a Spirit to refund your money here very shortly.

Steven H Van Wie 16:13

Heard a news thing this morning. I'm not sure. It might have been Delta, but I might be wrong about that. They're offering all of the employees who are stranded somewhere, Spirit employees, they're offering to get them home super cheap. Some nice little things like that.

Adam Van Wie 16:30

Hmm.

Joey 16:31

Yeah.

Steven H Van Wie 16:32

They aren't all bad. Yeah. Good thing to do.

Adam Van Wie 16:37

I mentioned earlier one good housing stat, housing starts. For March were much higher than expected. They came at an increase of 10.8% from a year ago. Starts were up in every region across the country, which is interesting. However, the flip side of that is that building permits were down by the exact same amount, 10.8%. So those are further upstream from starts. So I don't know exactly what's going on there, but we did see a really good, really good number in March.

Steven H Van Wie 16:53

It is.

Steven H Van Wie 17:10

So it might be partly weather-related.

Adam Van Wie 17:12

It was a little bit, but that wouldn't have been the whole country. So they were up in every region. Yeah, it's interesting.

Steven H Van Wie 17:14

No.

Steven H Van Wie 17:19

Just demand buildup, I guess. I, I guess at some point everybody's going to look at the interest rates and say, well, I really would like them to go down, but it doesn't look like they're going to.

Adam Van Wie 17:30

So there will, there will be some point when that happens, and I think we're probably close to it. I, I think the memory of 3% rates will fade every week, month that goes on.

Steven H Van Wie 17:42

Yeah. Now it's over half the mortgages in the country are in excess of 6 now. That's how much change over there's been.

Adam Van Wie 17:47

Wow.

Adam Van Wie 17:49

So that actually indicates that that's already happened.

Steven H Van Wie 17:52

Yes, it does.

Joey 17:53

The country may forget 3% rates, but I never will. No, Joey, I'll dream about it.

Adam Van Wie 17:58

Joey is not going to buy a house for quite some time.

Joey 18:00

We're off that train.

Steven H Van Wie 18:02

And remember, no matter what your rate is today, rates will come down and you can refi. Yeah, never, never too late.

Adam Van Wie 18:10

It is true. And refinancing is a very simple process and it is— and it can save you a ton of money. So if you find yourself in a situation where you're— I don't want to— I don't want to recommend that you exceed your budget for buying a house. But if you find yourself close to the top of your budget, know that if rates come down, you may— you may be able to refinance into a rate that's completely within your budget.

Steven H Van Wie 18:34

And also, don't forget, you know, we're talking mortgages because Christine Kennedy was in for

Steven H Van Wie 18:41

the real estate show before us. And that's what she does. I've been thinking about that quite a bit in the last hour or so. And there, there are always other forms of mortgages like the, the ARMs, you know, the 5-year, 7, 10-year ARMs. That is true. You can buy yourself a better deal if you believe that some number of years in the future, 5, 7, 8, whatever, A, you'll either be gone, or 2, you might want to just refi in that time. Or worst case, rates don't change. You're going to get a bump for a while until they do. So it's a, it's a coin toss of some sort. But most people don't stay in one house all that long.

Joey 19:23

Yeah, the average is 7 years.

Steven H Van Wie 19:25

Yeah. Long-term average.

Adam Van Wie 19:27

Yeah. Especially if it's a starter home or something like that where you're you know your family's going to outgrow it in the next 7 years, that's not a bad thing to think about.

Steven H Van Wie 19:36

Yeah, when your kids were young, we went back and looked at all the places we'd owned. And we were closer to 10 years for the last couple. But before that, 2 years on one, 4 years in one, then 10, then 11. And now 26.

Steven H Van Wie 19:55

You get a little older and your priorities change, I guess.

Adam Van Wie 19:58

Yeah, we've been 15 now.

Steven H Van Wie 20:00

So that's scary. No wonder I look so old. All right. Oh, we've got so much more to talk about. It's unbelievable. But I did want to mention GDP growth, which came in at 2%, the first quarter estimate, which is quite an acceleration from where we had been. And durable goods orders up 0.8% instead of 0.5%. People who were so convinced that this economy was going to tank due to all the stuff that's going on, it's just not shaping up.

Adam Van Wie 20:02

Yeah.

Adam Van Wie 20:34

It really isn't. It is not tanking at all, really.

Steven H Van Wie 20:38

Looks pretty good. There are some trouble spots, but you know where they are. All right, we'll take another break. We'll be right back. Don't go anywhere. This is the Van Wie Financial Hour. Welcome back to the Van Wie Financial Hour. I'm Steve Van Wie.

Adam Van Wie 20:50

I'm Adam Van Wie.

Joey 20:51

And I'm Joey Loss. And that was lightning.

Steven H Van Wie 20:53

It's easy for me to say. We're actually, I believe, going to get some rain. Yeah. Which we need badly.

Adam Van Wie 20:54

Wow, it's getting ugly out there.

Adam Van Wie 21:01

We've been getting a little bit, but nothing like I think what we're about to get.

Steven H Van Wie 21:05

Yeah, and I don't want a deluge because it's so dry out there, it'll just run off and do no good. Just a nice steady rain for hours and hours and hours. That would be very nice. I would appreciate it if they'd wait till I get home. I don't like Butler Boulevard. In the rain, and that's the truth. All right, a reminder, 904-222-8255,

Adam Van Wie 21:17

That would be nice.

Steven H Van Wie 21:26

and where you can take a shot at this: how many data centers will be under construction in Texas during 2020? And it's just a whole number, and it might surprise you. You, you know me, I don't give out things because they're so easy and so obvious, or I wouldn't have a point. So just like that. All right. Market wrapped up.

Adam Van Wie 21:48

Yeah, but I wanted to talk about something cool that happened this week. Okay, uh, Trump signed an executive order directing the launch of the trumpira.gov

Adam Van Wie 22:00

website. What is that?

Steven H Van Wie 22:03

Well, I went there.

Adam Van Wie 22:04

Oh, you did? Okay, so you know a little more than I do then.

Steven H Van Wie 22:06

You know how they rolled out the first one for the kids, the Trump accounts? It's, it's like that. It's the framework of what's going to happen. So I did sign up for an account, so I had access to get into it without any troubles. And there's not really much on it yet. But it's there.

Adam Van Wie 22:14

Oh, okay.

Adam Van Wie 22:22

Okay. Okay. So basically what this is, is a chance for people who are not covered by a workplace retirement plan to have a plan through the government. And there is even, I believe, a plan to do some sort of— for low-income people, some sort of not a match, but the equivalent of a match through a saver's credit or something like that. Details are still being developed, but

Adam Van Wie 22:57

we've been saying for a long time, not having a PlanetWorks should not restrict you from being able to save the exact same amount as someone who is covered by a 401(k) at work. And I think this is an excellent step in that direction.

Steven H Van Wie 23:10

It's a start. It allows more people to access a private retirement system. And they're going to use, from what I can garner so far, they're going to have access to the TSP.

Adam Van Wie 23:23

Yeah, it looks like the TSP will be the framework for how the accounts operate.

Steven H Van Wie 23:29

Yeah. And for those of you who don't know, about the TSP. That's a Thrift Savings Plan. It's for government employees. And it's absolutely humongous. And they use like index funds primarily. And the neat part of it is they're so big that the expense ratio on the thing is just approaching zero. It's so good. And on a long-run environment, you can't beat that kind of thing. I'm all for it.

Adam Van Wie 23:58

Yeah. So I thought that was a really nice piece of— I guess it's not legislation since it was formed under executive order, but it is something that will— we always advocate for expanding the ability for people to save for their own retirements. And this did that.

Joey 24:16

Yeah. That's like a fair play thing. There's so many different ways people can work and earn money. We got to be able to save the same way.

Adam Van Wie 24:22

Yeah.

Adam Van Wie 24:24

For all you 1099 employees that are not covered by benefits at work, this is sort of like a benefit at work.

Joey 24:30

Yep.

Steven H Van Wie 24:31

And you can do— most people can do the same thing privately, but you can't get a deal like this privately. And if you're low income enough, there's going to be, as you say, essentially matching funds in it. And all we have to do is get people to start saving younger and our future problems really look a lot more solvable.

Adam Van Wie 24:53

It's true. And, and it— for people that are feeling left behind in this economy, and I know there's a lot of people like that out there, just the access to, to markets and ways to grow your personal wealth. I really— I like that this administration is focusing on that through the, the, through the baby accounts and now through the the IRA accounts.

Steven H Van Wie 25:18

Yeah, there are a bunch of people out there who are unreachably hopeless. They were all on parade yesterday.

Adam Van Wie 25:25

I, I don't know what that—

Joey 25:26

what is this?

Steven H Van Wie 25:27

There was something like 40 demonstrations pro-socialism, pro-communism in the big cities.

Adam Van Wie 25:33

For all the people that communism has brought out of poverty.

Steven H Van Wie 25:36

Yeah, they can line them up and it would be a pretty small line, pretty short line. Well, there are quite a few though. They're called the leaders. Vladimir Putin's

Steven H Van Wie 25:48

one of the wealthiest people on the planet. Who knew? All right, I said I had a couple little things about the Federal Reserve. This, when Kevin Walsh got, Walsh got cleared through the committee because, you know, the idiot Tillis finally let him go. But anyway, now he's going to be up for a vote probably next week and then Assuming it goes through that, then he should take the helm around the middle of May, I believe. And that's a good thing. He's got a lot to live down and a lot to live up to. Here's a good one. You guys will love this one. The Federal Reserve is not currently forecasting a recession. Give me the date.

Adam Van Wie 25:50

This is true.

Steven H Van Wie 26:32

Well, this might hit you. It might not.

Joey 26:34

I don't know the date that this statement came out. Yeah.

Steven H Van Wie 26:38

This is Bernanke, by the way.

Joey 26:41

Late 2007.

Adam Van Wie 26:43

Yeah.

Steven H Van Wie 26:44

Late January 10th, '08. Good thinking. Virtually nailed it. Wow. You people might remember what happened in 2008. If you don't, ask your parents. They do.

Adam Van Wie 26:46

Oh, wow.

Joey 26:56

I had a professor at Virginia Tech who was still mad about it like 3 years later. And every day he would just rail on the TARP money. And we're like, all right, man, just teach us how derivatives work. We get it. You didn't like it.

Steven H Van Wie 27:09

I love it. All right. How many of you have seen the commercials? I'm not going to give out the name of the company because there are actually two of them running this style commercial where the good-looking older couple, guy with the neatly trimmed grayish hair and his beautiful wife, and he's on his phone. What are you doing? I'm trading through this platform. Well, is that— are you trading stocks in your 401(k)? Yeah, that, but not only that, I'm trading other people's money too.

Steven H Van Wie 27:46

Have you seen these? You guys don't watch the commercial television very often, and that's where these things are running. So there's another one where he's putting his golf clubs in the car and she comes up to him and says, well, what do you— 'Have you made a plan? You're about to retire.' He said, 'I don't need to. I've got this app and it'll do all the trading for me.' 'Well, you don't have any experience.' 'I don't need any experience.' 'Well, what about the economy?' 'It doesn't matter. It works both ways if the market goes up or down.' He can just leave his long-term retirement plan to an app on his phone.

Adam Van Wie 27:47

No, no.

Adam Van Wie 28:23

That seems like a great idea.

Joey 28:25

I've seen those. They have these portfolios that follow the reported trades of politicians.

Steven H Van Wie 28:32

Oh yeah, which those are—

Joey 28:33

you can imagine where this goes, like who's the winner, whose portfolio is the best. I mean, it's pretty funny, but you pay a hefty fee to— for them to model it and update it with the reporting and everything. It's not free.

Steven H Van Wie 28:45

Sarah and I, these commercials come on and we just cringe. They are giving advice to people who have no experience to not learn anything about it. Just do no studying. Yeah, just log in and shove some money at it. And by the way, when you open your account, we'll lend you up to $50,000 so you can trade that too.

Adam Van Wie 29:08

Oh, fantastic. So now you're on margin. That's even better. Wow. What could go wrong?

Steven H Van Wie 29:14

And do they mention that margin accounts are very difficult to open for regular people who know something? Because you have to have a certain amount of money and experience. Experience and so on and so forth. And I can't tell you enough, if you see one of these commercials, watch it carefully one time and then you'll understand what I mean. Do not be swayed. This isn't something like Robinhood, which is just a platform to trade stocks. This is a whole, we'll take care of your financial life for you. Investing site. And I don't know, as they say, what could possibly go wrong?

Joey 29:59

Yeah, this seems like it's built on the back. So like 10 years ago, remember robo-advisors? It was a huge thing. And I actually, I think they're a great tool and they supplement a lot of the advisory goals of financial advisors. I mean, it's really just a better way to manage a portfolio of small nature on your own if you don't know anything and you want to trust something.

Steven H Van Wie 30:18

And it gives you access to people who do know something. Right.

Joey 30:23

And a platform that'll help you do it. But these go further and they take like the whole robo-advisor concept and turn it into a vibe. So it's just like, oh, I'd love like this particular thing that's going on, you know, pick a subsector of energy and you just go all in on that. And they've got some high sale policy for how they're going to trade around that. And, you know, where's that going to get you in 30 years?

Adam Van Wie 30:47

I'm really wondering what their liability policy costs every year, because that sounds like a disaster waiting to happen.

Joey 30:54

Oh, I'm sure it's— I mean, it's like anything investing that's automated. It's going to have all the disclosures and you're totally responsible.

Steven H Van Wie 31:03

You're going to like sitting at a poker table, going to read 40 or 50 pages of tiny little print, and then you're going to sign and open the account. And you memorized all that stuff that could go wrong. I don't think so. Yeah, it just— it's so egregious to me. And this is kind of on the same topic. The, um, the retirement reality gap, it's called. Most workers plan to retire at about 65, but most workers actually retire at about 62. That is not because they make so much money that they can all of a sudden do this, so they're just gonna go ahead and walk away. Most of those pre-65 retirements are involuntary. Over half of them are involuntary. Can be sickness. It could be the company folds. It could be almost any number of things that displace people. But then they go out and if they really need a job after 62, please try to find one. It's going to be very, very difficult. Now that means that if you start planning for your retirement the day you're laid off at 62, you are in bad shape. Unless of course you get that handheld app and it'll do it for you, right?

Adam Van Wie 32:22

Yeah. Yeah.

Speaker 3 32:23

Wrong.

Steven H Van Wie 32:24

That's why start early, use professionals. We see young people all the time because life isn't always like that in the end. We'll be right back after a short break. This is the Van Wie Financial Hour. Welcome back to the Van Wie Financial Hour. I'm Steve Van Wie.

Adam Van Wie 32:40

I'm Adam Van Wie.

Joey 32:41

And I'm Joey Loss.

Steven H Van Wie 32:42

And lines are open, 904-222-8255,

Steven H Van Wie 32:46

where you can take a shot at today's trivia question. How many data centers will be under construction in the state of Texas during the year 2026? And it's just a whole number. I'll cut it down a little bit. It's under 10,000.

Joey 33:02

Thanks for that.

Steven H Van Wie 33:03

Way ahead. Yeah, thank you. That was sort of a not really gift, you know. We mentioned perhaps, I can't remember if it was really on air or not, there is a trust I had never heard of until recently. And this whole thing starts out by, there are people out there, a lot of people out there who have things in their will that should not be there. The problem with the will, if you don't have a trust to go along with it and you have any sufficient assets, that will have to be entered into probate court, at which time all that, that all the things in there that you don't want everybody to know, that becomes public domain so people can search them. You know, way back, digress a little bit again. In the old days when I was just studying insurance, We found out one of the secrets to the really successful insurance people, they read the obituaries first and then they look for grieving widows and that kind of thing and attack. Yeah. Real classy people, right? Well, there are things that when the will goes into probate, some people have, for instance, their Social Security numbers in their will. This is not a good idea, people. It's not a good idea at all. You have to go through there and if you, if you need to have something like that removed, get it done. It's just scary. But some people have inter-family problems also. They, they have maybe a few kids and one or two of them, they really don't want to leave money to because they can't handle it, or they did something that's not going to ingratiate them. And sometimes there are some remarriages among the people with the will that have to— it requires you to redo your, your will and your beneficiary considerations. And other times your kid, one of your kids will remarry, and sometimes they don't have really good discretion as to who they marry. And it's been kind of an ongoing problem where people try to direct almost nothing or nothing to some of the kids. They don't write why. You need to write why in there. All right. We're going to come back to this. Oh, Craig. Oh, sorry. I'm not used to having Roger do it, but take it. We'll get this fixed eventually. Hello.

Speaker 3 35:43

Hello, good morning.

Steven H Van Wie 35:44

Good morning, how are you?

Speaker 3 35:45

Hey, good. I want to take a stab at the, uh, trivia question. Good. I'm gonna say— I, I just heard something on the news, um, I'm gonna say like 75.

Steven H Van Wie 35:57

Well, that's a nice number, but it's too low.

Speaker 3 36:02

Too low?

Steven H Van Wie 36:03

Yep. Isn't that incredible?

Adam Van Wie 36:05

So wow, you may— that may be true today, but the, the actual question was how many will be, right? So there might be more coming online later this year. That might be the disconnect there. Wow, unbelievable.

Steven H Van Wie 36:16

Yep, that's true. All right guys, well, thank you.

Steven H Van Wie 36:22

Thank you, I appreciate it. You bet. Good. That, that calls back to my comments on electricity.

Steven H Van Wie 36:32

We gotta be building electrical things. I guess, who was it? Belgium just took back their closing of all their nuke plants over there and they're gonna actually kick it in the butt again. Amazing, isn't it? 

Adam Van Wie 36:45

Yeah.

Steven H Van Wie 36:46

This is, you're gonna see these things all over. And I tell you, if there are good-sized construction companies that have their act together at all, you guys are, in for a couple of years of really exciting times, I think. There's no reason to have people in the construction business be unemployed. Anyway, back to the— oh, another one.

Adam Van Wie 37:09

Yeah, I got another call.

Steven H Van Wie 37:11

Good morning, Bob.

Bob 37:13

Good morning, another one.

Joey 37:15

Yeah, hi.

Bob 37:17

Hey, I'm gonna say 117.

Steven H Van Wie 37:20

That's a nice number too, but it's too low.

Bob 37:23

Too low. Oh my gosh. Hey, you know, you know, I thought I nailed it.

Steven H Van Wie 37:33

Trivial, trivial with a point. That's me, right?

Bob 37:36

Trivia with a point. I was going to say 156, but I thought that would be way too high. So anyhow, I'll let you guys go and join the program.

Steven H Van Wie 37:44

Well, you'll find out very soon.

Bob 37:46

Thank you. Okay, thanks.

Joey 37:47

Thanks, Bob.

Steven H Van Wie 37:48

Anyway, some of the things that could happen like that have to find ways to go around them. And one of the possibilities— there's a couple of things that people do. There's something called contestability.

Steven H Van Wie 38:06

Only about 2 or 3% of wills that are probated every year are contested by one of the people who

Steven H Van Wie 38:14

either on them or may not be on them. So one of the ways they get around that is they have an incontestability clause put in there, and that will not say that the person can't contest it anyway. But then some of them add, well, I'm going to give them whatever amount of money, $1,000, $10,000 or something like that, and that will be forfeited if they contest it. So that's another way to look at incontestability. That's what you really want. You want to sail through there and have your wishes all put together in a row, and it doesn't always happen. So let's go back to the kids that are remarried. Oh, another one. All right. Good morning, Bosco.

Bosco 38:57

Good morning, y'all. Great day for a duck.

Steven H Van Wie 39:02

How are you?

Joey 39:04

Yes, it is.

Steven H Van Wie 39:05

Quack away, I say.

Bosco 39:07

Very good. I wanted to say and take a stab at your trivia. Now I wanted to say, 425.

Adam Van Wie 39:17

That is too high.

Steven H Van Wie 39:18

And I'll explain that in about 5 more minutes if you can keep listening. Thanks so much. You bet. Ciao. That's a lot of them. But like I said, you'll hear some more before we're done.

Bosco 39:21

Good to go. Y'all take care. Thanks for the time.

Steven H Van Wie 39:33

So in a— there's something called a spendthrift trust that you can tell them, well, this kid can't get the money. It goes in trust and there's a trustee that gives them out. But other times, if it's your son or daughter's new spouse, for instance, what they will do to keep the money out of the hands of the new people is something called a bloodline trust, which means when you pass away and you have heirs in the will and you want to keep it for only your blood relatives, Some states allow what they call a bloodline trust, which means it goes into a trust and there's a trustee— can either be your child or somebody else— and it means the money never gets distributed to the non-bloodline spouse of a bloodline inheritor. And it's something that I had not heard of. And I guess some states are bringing it in. But if you have a situation like that, or if you know anybody who has a situation like that, just try to remember that a way to keep it in the family is a bloodline trust.

Adam Van Wie 40:43

Yeah. Well, I mean, it was clever. Everyone always loves their kids' spouses, right?

Steven H Van Wie 40:47

Yeah.

Joey 40:48

You know, people— I mean, the bloodline trust, it's an interesting idea, but people have been doing the— have creating— have been creating the outcome of a bloodline trust without one for a long time.

Adam Van Wie 40:58

But if this makes it easier, streamlines it, Sure.

Joey 41:01

Sure.

Steven H Van Wie 41:02

Well, I think you're right. One of the other things when you're, when you're drafting a clever will, it's, it's nice to have your intent so blatant. And if you've got a bloodline trust set up, I think everybody knows pretty much exactly what you mean. Then you won't get the people in the background of your phone call. Where's the money?

Adam Van Wie 41:22

Can you— I wonder if that works the other way. Can you set up like a cocktail waitress trust for your dad? And keep his future spouse from inheriting after—

Adam Van Wie 41:35

I don't know.

Steven H Van Wie 41:37

Listen, if you got a clever enough lawyer, yeah, there's a way around it. If you can think of it, if you can dream of it, they'll figure it out. But it also speaks very well for the use of a revocable living trust, which is a lot easier for you and your spouse and your beneficiaries than dealing with the will. So it's something to think about. That's a buy it now or pay it now, buy it later or some kind of thing like that. In other words, it's an investment in your future and your kids' future.

Joey 42:12

So it seems most useful in blended families where, you know, just in the past when I've— without a bloodline trust and I've been helping with the analysis of how do we get things where we want them to go if A or B happens. Takes a tremendous amount of work every single year to split the money up the right way. So maybe a bloodline trust really helps in that situation. That seems like it kind of implies the math every year on its own.

Steven H Van Wie 42:33

It's an answer to a need, most likely.

Adam Van Wie 42:36

I've seen a situation like this where there are a bunch of children, wealthy parents, and two of the children had spouses that were very much not liked by the, uh, by the parents, and they were able to without a bloodline trust, design it so that only bloodline kids would get the money or the grandkids would benefit.

Steven H Van Wie 42:58

Yeah. And all these things that are improvements on those are, are to reduce the contestability of the will. So it helps. All right. In the state of Texas, in the year 2026, there will be 140 data centers either built, finished, started, whatever, under construction sometime, and all of that. But here's the real key to me. That is only 20% of the total being built in the country. 5 times 140 data centers being built. There are states like Maine that are trying to abolish them in their state. I don't think that's very smart, but It's not my problem either. But could you imagine that? 140 and you've only got 20% of the national total. That's, to me, it's just an astounding figure. Now translate that into utilities and the need for electricity and then it really becomes mind-boggling, I think. So, always a good reason to do those things. One more, let's see. Federal Reserve, December 5th, 2010. One myth out there is that What we're doing is printing money. We're not printing money. It's done electronically. And on that happy note, we'll see how the new guy goes. Thanks for listening. We'll see you next week, same time. Be there.