October 18th, 2025 - When Volatility is Good

This week on the Van Wie FInancial Hour, your favorite hosts discuss recent market volatility and its impact on the financial industry. They analyzed strong market gains despite erratic conditions, linked to factors such as AI investments and corporate earnings results. Additionally, the discussion touched on U.S. demographic challenges, health insurance projections, and policy implications from the mayoral race in New York City.

Transcript

STEVEN H VAN WIE 0:00

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

Adam Van Wie 0:06

I'm Adam Van Wie.

Joey 0:07

And I'm Joey Loss.

STEVEN H VAN WIE 0:08

Full house day once again. Or at least three of a kind, I guess. And we're happy to be with you bringing you all the news of the week. Actually, we only have an hour. We'll bring you the top of the news of the week. There's just way too much going on for one hour to handle it all, but it's always interesting and it certainly was another week of interesting. So first off, let me welcome everybody, all you regulars. You are the people we keep coming back for. As long as you keep coming back for us. We'll keep doing this for a while. And if you're new to the show, whether you got told about it, happened upon it or whatever, hope you can stick around the whole hour. Because we promise very little in life, but we do promise that if you stick it out for an hour, you'll find something you didn't know, useful, useless, whatever. But we will talk about what we want to talk about unless you out there decide you want to talk about something different. And if you do, you can take control by picking up the phone and dialing 904-222-8255.

STEVEN H VAN WIE 1:11

And we will put you on the air immediately and discuss what you want to talk about. So don't be shy, we don't bite, as we like to say. And with that said, we'll get into the events of the week very quickly. Here it was,

STEVEN H VAN WIE 1:30

the three of us sat down just for a few seconds. We're describing, trying to describe the week and none of us did a really good job of it, except collectively, I think we did a perfect job. We said it was a weird week.

Adam Van Wie 1:45

It really was. I really didn't know what to expect when I sat down to do the market wrap this morning and I, I knew it was up, but I didn't get there was. I had no indication, no feel for how much it was up, what the, what the magnitude of the gain was. But I was pleasantly surprised, honestly. Yeah, it was a really good week.

STEVEN H VAN WIE 2:02

Should have been.

Adam Van Wie 2:06

I think that the word that I actually texted this to Joey during the week, October. It just perfectly sums up the month of October. And we say it, or I say it somewhat often, that volatility isn't always bad. And this week was a perfect example of that. We saw volatility, but the market went up. This type of market is not the norm when you see this amount of volatility and also gains on the market, but they do happen and these events happen. They happened in 1997-2000

Adam Van Wie 2:42

during the tech bubble, and then they happened again between 2020 and 2021. And what I think drives that is that you've got a lot of people with a lot of conviction that the market will continue to go higher. And this time it's based on the AI AI theory, I think. And then you've got a lot of people saying, well, wait a second, maybe we've got ahead of ourselves and, and

Adam Van Wie 3:08

maybe we don't need to be quite this high on the PE ratios. Maybe there's not this euphoric market rally or maybe we shouldn't have it. And so when you get big traders on both sides of that issue, you see things like this where you get a lot of volatility and the market last week went down, but this week is going up. And so it's kind of interesting to follow.

Adam Van Wie 3:33

We'll see what happens. I, I really, I, I don't know. I could make a pretty compelling case on both sides of this issue right now.

Joey 3:39

Yeah, I think you just can't expect a smooth ride when you're within 2% of all time. Highs usually. Bump around a bit.

Adam Van Wie 3:44

Yeah. Sometimes you can. I mean, we had a last quarter, we saw it quite often.

STEVEN H VAN WIE 3:50

Well, you can expect it anytime you want to.

Adam Van Wie 3:52

Yeah, but, yeah, yeah, but eventually when you see us, I think once you see a smooth ride like we did last quarter, you, you should expect something like this at some point. Yeah. Yeah. It can't last forever. You can't. The market can't always go up and it can't always go down. It has to do a little bit of both and we're seeing it right now for sure. The VIX actually peaked at over 28 this week and it ended at 21. But the market was up. The Dow was up 1.6, the S&P was up 1.7 and the Nasdaq was up 2.1. Gained back much of what was lost last week. We didn't gain at all, but pretty close. Much of that upward momentum. This is great news. Much of it was driven by solid earnings reports that were released this week. I'm gonna go through some of those and you're gonna see a trend and I think you'll like it. On Tuesday, we saw BlackRock beat on both earnings and revenue, and then JJ came out and did the same thing. Wells Fargo was the first major bank to report that they beat on earnings and revenue. They were followed by JP Morgan and Citigroup. And guess what? They beat on both earnings and revenue. Goldman Sachs also reported that they beat revenue by 9% and earnings by 11%. The only negative in all those bank reports is that net interest margins are falling. Not really a surprise there. As you see rates come down that's going. Those are going to get compressed. On Wednesday bank of America continued the positive momentum with beats on both earnings and revenue. Followed by Morgan Stanley with the same news. So I, I'm sensing a trend here amongst the Bing banks on their earnings reports. United Airlines also reported a solid quarter. They beat on both earnings and they had actually had a slight miss on revenue but it was less than 1%. Trucking company JB Hunt reported a 20% beat on earnings and that that drove the stock 22% higher.

Joey 4:02

Yeah. If we're going to hang out there.

STEVEN H VAN WIE 5:48

Taiwan know what we call transports? The old transports.

Adam Van Wie 5:52

Yeah, that's true. But it is interesting because you are hearing a lot of negative out of the trucking business right now with the lack of drivers, lack of freight revenue. Just all, all the news has been negative. But that that report was the complete opposite of what the news has been saying. We saw Taiwan semiconductor also report a 10 earnings beat. Schwab then came in and reported stronger than forecast earnings and revenue. And then Snap, Snap, Snap which is a tool company but apparently they also do some software. They reported their strongest growth rate since 2023. I would say this earnings season is off to an incredible start.

STEVEN H VAN WIE 6:30

And I would agree with you.

Adam Van Wie 6:32

There's a bit of the scare in the market though this week. On Thursday the mid market banks there were two of them, Zions Bancorp and Western alliance they disclosed that they had spoke exposure to an alleged fraud. Fraudulent borrowing tied to commercial mortgages. And it was big, it was like 100 million or something. Western alliance also has exposure to the first brands collapse. So that was a real concern. It dropped the regional banking index by over 6% and had the futures down pretty hard. On Thursday however the companies came out and I think their exposure is not as, as bad as what they initially thought. And I don't think that it involves all the regional banks, it was just those two. And so the market pretty swiftly recovered on Thursday.

STEVEN H VAN WIE 7:18

Remember the one in California that imploded? Yeah, that one. And all of a sudden the world banking system is falling apart. And then next day. Well actually not.

Joey 7:21

Silicon Valley?

Joey 7:32

I think people have understandable trauma. So the second that word hits a headline.

Adam Van Wie 7:36

Absolutely. You know Sell, sell, sell. Yeah, definitely get it. It's but a, a problem at one company doesn't always bring down the whole, in the whole sector. In fact, those other banks might pick up some business because of this.

Joey 7:49

So what's funny, though, is it tells you what consumers think of banks. It's like, oh, if one of them's doing it, they're all. Oh, man.

Adam Van Wie 7:54

Exactly. No doubt about it. So I just have a little bit more, but we're, we're coming up on a break, so I'll just finish it when we return.

STEVEN H VAN WIE 7:55

Yeah.

STEVEN H VAN WIE 8:03

Okay, good. And after the break, we do have a trivia question as usual. And I've got a lot of focus today on the open enrollment situation because there's some stuff going on in the, in the insurance business lately y' all got to know about that won't get any better. All right. Don't go anywhere. We'll be right back. This is Van WE Financial Hour. Welcome back to the Van We Financial Hour. I'm Steve Van We.

Adam Van Wie 8:30

I'm Adam Van We.

Joey 8:31

And I'm Joey Loss.

STEVEN H VAN WIE 8:33

And as I said, we have a trivia question today, as usual, brought to you by Paul Lloyd from First Coast Alarm. You can call Paul at 904-636-7888.

STEVEN H VAN WIE 8:45

One of the major stresses today for doing show prep and such is the whole concept of the open enrollment which bleeds into Medicare. It bleeds into the, believe it or not, the New York City mayor's race and a bunch of other things. And it has a lot to do with the power of governments to actually look ahead and plan ahead and estimate. Medicare started in 1966

STEVEN H VAN WIE 9:15

and it grew rapidly by the year 2000. What percentage did the Medicare, the individual Medicare costs, this is per person in the plan. What percentage growth did that hit from 66 to year 2000? And I'm going to give you a hint. I'm feeling exceptionally generous today. During that time, the rate of inflation total was 431%

STEVEN H VAN WIE 9:46

and Medicare beat that. And by beat it, I mean we lose and they win larger numbers. So the starting Point is at 4, 431%. But Medicare was quite a bit higher. So you can, somebody else can take a shot at what the starting point should be. They weren't very accurate in their predictions. And I'll back all that up once we get closer to the end. All right. Back to the market.

Adam Van Wie 10:14

Yeah, just one other thing I wanted to talk about. Poly Market, which is a political betting site, has the odds of the current government shutdown lasting more than 30 days at above 66% with only 32% betting that they resolved this in under a month from the beginning.

STEVEN H VAN WIE 10:30

Previous highest 32.

Adam Van Wie 10:32

Yeah, so that's kind of interesting. Not that it doesn't really matter, except that there are 19 reports that have been delayed by this government shutdown now and the longer this goes on, the less data we'll have. Despite that, I just wanted to point out that there are a lot of non government reports that are issued. Those include ones from private companies like adp. And Redfin puts out a real estate report as well as reports from the regional Fed banks. And, and then nfib. And NFIB actually had a report come out this week that's the, the small business report. And I, the one data point I took from that that was really interesting is that hiring plans have been increasing over the last few months. We haven't seen that in quite some time and there's been a lot of worry about the job market, but that kind of leads me to believe that there might be some positive momentum there. So.

STEVEN H VAN WIE 11:25

Yeah, and one of the other things is the GDP trackers. There are people who track the GDP throughout the month and they're all strongly positive. I will be personally surprised if the next reading that comes out is not four or better.

Adam Van Wie 11:39

Interesting. I'll, I'll look that up in a minute. But also, Truflation is another great site for inflation Data. It's at 2.24 right now. Percent lower than the 2.9 government number.

STEVEN H VAN WIE 11:50

Yep. It isn't where the Fed wants it, but quite frankly, the Fed is just unreasonable. They, they could make it 1.7 if they wanted to, but they don't want to because Trump's in there.

Adam Van Wie 12:06

So the Atlanta Fed actually puts out the GDP now and it's at 3.9 right now. So, yeah, pretty solid.

STEVEN H VAN WIE 12:13

Yeah. And I'm not so sure that this dearth of statistics for a short period of time isn't making things just better for everybody.

STEVEN H VAN WIE 12:23

Those numbers contribute more to the volatility they would.

Adam Van Wie 12:26

Yeah, that's true, but. And we will get them eventually. When the, when the government reopens, will we believe them? No. No, no, they won't be any better because they're delayed, I'm sure.

STEVEN H VAN WIE 12:32

Stay tuned.

STEVEN H VAN WIE 12:36

Well, the difference between our government statistics and China's government statistics is that we're absolutely certain that all the Chinese data is wrong and we're only up to about very likely that what our government puts out is wrong.

STEVEN H VAN WIE 12:55

They put the new guy in at BLS and He's a superstar among the business world. But all the systems and all the equipment, just like Sean trying to redo the air traffic control, it's in such a shambles and the stuff is so old, the procedures are old, everything's so old. It's going to take some time to modernize. That's going to happen with the BLS too. So maybe next year at this time we'll be getting some better, more reliable numbers.

Adam Van Wie 13:27

I hope so. I mean, the amount of change that's happened in the first nine months of the current presidency is, is pretty incredible. If we get in another year, revamp the bls, that would be, that would be amazing.

Joey 13:40

Yeah, I mean, the data is there, right? I mean, it could be much more. It can come out much quick, more quickly and have less revisions. God willing.

Adam Van Wie 13:49

Yeah, that's the biggest plan. I don't, I mean, I know it's a tough job, like have a big government bureaucracy. They're not easy to change. But honestly, if you, if you were just starting from scratch, I don't think it's that big of a job. It's just figuring out what the best way to collect the data is in the most accurate manner and doing it.

STEVEN H VAN WIE 14:08

Yeah. And there, there are a lot of mathematicians who have expertise in things like statistical sampling. I don't think any of them work for bls. They just keep doing the same thing they did back in the 80s and 90s.

Adam Van Wie 14:22

I, I don't know. I don't know. I think some of them do.

STEVEN H VAN WIE 14:25

You know, there's going to be some good ones when they hire that many people.

Adam Van Wie 14:28

Yeah, exactly. And I think they just can't change a big government bureaucracy.

STEVEN H VAN WIE 14:32

Exactly. Well, there's going to be a little less of the big and the bureaucracy if they keep the shutdown going because they're marching through pretty well.

STEVEN H VAN WIE 14:44

Good morning, Bob.

Bob 14:45

Good morning, gentlemen.

STEVEN H VAN WIE 14:47

How's everything?

Bob 14:48

Oh, everything's great. I'm cleaning the coffee pot right now while I'm talking to you.

STEVEN H VAN WIE 14:53

Good. Multitasking.

Bob 14:56

Multitasking in many ways, more than one. Hey, I saw Brett Baer the other night, Thursday night. He had Kevin Warsh on. Former Fed

Bob 15:08

individual, and I was very impressed with him. So was I. Yeah, I think he's lining up to be one of the frontrunners for replacing Chairman Powell.

STEVEN H VAN WIE 15:20

Even he wouldn't deny it.

Bob 15:23

Yes, this is true.

STEVEN H VAN WIE 15:24

He said it's not my choice, which we knew. But he certainly didn't say, like, I, if appointed, I will not serve or anything like that.

Bob 15:32

He was practically drooling he was very good in his discussion with him, talking about, you know, the mistakes that they've made recently and the two fed rate cuts before the election that he called it a Bronx cheer because the market dropped afterwards.

Bob 15:56

It was, it was very impressive. Hey, I want to take a guess at your trivia question.

STEVEN H VAN WIE 16:01

We need a bracket.

Bob 16:03

657%.

STEVEN H VAN WIE 16:05

All right, I'm going to say

STEVEN H VAN WIE 16:09

that's too low. But picture those words. Capitalized.

STEVEN H VAN WIE 16:15

That's too low.

Bob 16:17

That's too low. Capitalized.

STEVEN H VAN WIE 16:19

Exactly.

Bob 16:21

Okay. All right. Well, at least we've set a higher floor.

STEVEN H VAN WIE 16:26

We're advancing. Keep the cause, keep the faith. Right?

Adam Van Wie 16:28

Keep.

Bob 16:30

Or. Yes, we'll talk to you soon.

STEVEN H VAN WIE 16:33

All right, thanks. Always fun to hear from you.

STEVEN H VAN WIE 16:37

And let's see how this, the New York City may oral election come into this. Well, it's related through estimating. And most of you probably don't follow the Mamdani

STEVEN H VAN WIE 16:52

promises I guess as closely as we do. And there are plenty of them. He will be the mayor. And he is a communist. And he is smooth. That man can talk and smile. And if you're not paying attention, you could get sucked right in. So there's a lot of those busy people in New York who will vote for him because of the four letter F word that he loves to throw around.

Adam Van Wie 17:20

Free.

STEVEN H VAN WIE 17:23

You can capture a lot of flies with honey and a lot of voters with the word free. And he's doing it. So his. His estimates seem a little strange to me in some cases. Like when. First off, let's talk a little theory. First, he wants to raise the corporate tax, New York City corporate tax from its current nine to its to eleven and a half. And he says the reason he wants it at eleven and a half is because then it will be the same as New Jersey's corporate tax. So he is saying that the city of New York should have the same corporate tax rate as the state of New Jersey. I would rather have apples than oranges or oranges and apples, depending on what day it is. Conveniently neglecting Albany. Albany collects 7.2% corporate tax on New York corporations. Now what in the world is he talking about? He's talking about the lie of omission. The biggest type of lies today are the lies of omission. Although he's running a close second with his lies of commission. Well, he estimates that little increase in the corporate tax in New York City to generate an extra $3.1

STEVEN H VAN WIE 18:56

billion.

STEVEN H VAN WIE 18:58

And by extra, I mean static programming. That's a 27.8% increase. Statically the amount they collect, collect. If, if everything stayed the same, they just raised the rate, they would get a couple billion. He Sundays look at 5. He has overestimated with absolutely no explanation whatsoever.

Adam Van Wie 19:18

Also, using a static score there is.

STEVEN H VAN WIE 19:20

Not accurate that we're going to get into all the statics too, after the break because this, the whole thing, people, I can't, I can't tell you strong enough that everybody in New York City is going to get the wool pulled over their eyes except the ones who vote for the sane people. And they're a very slim minority in New York. But what does it mean in terms of your open enrollment and your Medicare? For those of you who don't know, open enrollment is that period of time where you can't stand the commercials you're seeing on television. You know the one, oh, I can call and not have to commit to anything. And what was that lady's name? It was so annoying. Last year they have a new annoying woman in the commercials this year. It's not a bit easier to listen to. But that's not what we're here to talk about. I'll fill you in right after the break. Don't go anywhere. This is the Van We Financial. Welcome back to the Van We Financial Hour. I'm Steve Van Wee.

Adam Van Wie 20:18

I'm Adam Van We.

Joey 20:19

And I'm Joey Loss.

STEVEN H VAN WIE 20:20

Yeah, we got to get those intros changed too to get you on there, so people aren't so surprised. I think you're some kind of a traveling guest, I think. Anyway, I digress. Remind Everybody lines are open. 904-222-8255.

STEVEN H VAN WIE 20:35

And trivia question is out there. From 1966 to 2000, inflation grew at a rate, a total rate for 431%. Medicare grew faster. And we know that it's somewhere north of 630% and somewhere I'll, I'll say substantially north of that. Just trying to be nice to.

Joey 20:57

Honestly, I'm surprised by that. Even I expected a gap about that wide. I liked Bob's guess. So that's pretty shocking. It's that much higher.

STEVEN H VAN WIE 21:04

That brings me back to Mom, Donnie. He is telling us that some things are going to happen for a very reasonable cost. And he isn't telling us all of the things that, that are in this. And by the way, he was born in Uganda, so thank God he could never be president. Oh, wait, born in Africa President. I'm not going there.

STEVEN H VAN WIE 21:27

What can I say? He's been supported by the two stalwarts of the Washington D.C. scene one being AOC and one being Bernie Sanders. Now, what could possibly go wrong?

Adam Van Wie 21:44

I love, I love my, My favorite part of his platform is the lower housing costs by more price controls. That is a recipe for absolute abject disaster. Because the only thing that you can do by put. Implementing price controls. Yes. It will benefit maybe a thousand, maybe five thousand, maybe ten thousand people. The other seven million will all experience runaway inflation on housing.

STEVEN H VAN WIE 21:53

Yeah.

STEVEN H VAN WIE 22:14

Why is New York rent so high today?

Adam Van Wie 22:17

Two words, price controls.

STEVEN H VAN WIE 22:19

Yeah. Rent control. Yeah, that's what it is. It's price control. It doesn't work.

Adam Van Wie 22:24

No, it has the opposite effect. It's going to be a. It's going to be like the Hindenburg.

STEVEN H VAN WIE 22:31

Yeah, exactly.

Adam Van Wie 22:32

It's. It's such a bad idea. And then capping rents where they currently are. Are you kidding me? No. The real estate market might collapse.

STEVEN H VAN WIE 22:40

Yeah, it's in sad enough shape already.

Joey 22:43

You sound like a capitalist.

Adam Van Wie 22:44

I am a capitalist, but this is, I'm not, I'm not saying that because I'm a capitalist. I'm saying that because we've seen this play out. There's lots of examples of this.

Joey 22:56

There's a reason free markets have flourished in basically every category. And other versions have not.

Adam Van Wie 23:00

That's right.

Adam Van Wie 23:02

It's, it's, it's like a, A lack of basic economic understanding of anything. I mean, you go to Ecom 101, they will teach you about.

STEVEN H VAN WIE 23:11

But Adam, you know, I've, I've raised you well enough to know that the only reason socialism hasn't worked so far is because the wrong people were implementing.

Adam Van Wie 23:19

Yeah. This time will be different. That always works out. Right.

STEVEN H VAN WIE 23:23

Well, here's two of his. His primary tax proposals. Raising the corporate tax rate from 9 to 11 and a half and creating a 2% New York City income tax for anyone making more than a million annually, which his platform estimates will generate 4 billion annually. I would say there's at least a 50, 50 chance that revenues will drop below where they are today if he does this.

Adam Van Wie 23:49

I would put it higher than that because people are going to leave. Like, there's no way that you stay and put up with this. You're. You're not paying more than half your income. State and the federal. There's just no way.

STEVEN H VAN WIE 24:02

You leave your big house in New York and you move to Miami or something. He's just going to confiscate the house and make it a six family anyway. With free rent.

Adam Van Wie 24:12

Yeah. And then you can't rent it out for fair market value. I mean, What a disaster. It's just awful.

STEVEN H VAN WIE 24:18

And a lot of the things are reliant on state aid and there's not a very real chance of him getting any state aid. Albany is not in the best shape right now. And Elise Stefanik is running for governor and she is closing fast on Kathy Hochul who has no ability to manage somebody like Mamdani, much less the rest of the state. I am hoping that his election will really trigger the election of, of Elaine to, or at least I mean to the, the state House in Albany. That would be the best thing to counteract New York. But you know, unlike the federal government, cities and states are not allowed to go into debt. Now what's going to happen when he starts spending all this money and the revenues are dropping instead of rising? Remember what happened. You guys are probably too young to remember back then, but we, we just let them go last time, said fine, declare bankruptcy, see if we care. And, and it wasn't that much later that New York was a fine place.

Adam Van Wie 24:32

No.

Adam Van Wie 25:32

Yeah.

Joey 25:37

Well, they can always sell the rights to parking meter income to the UAE like Chicago did. Right. Like some 70 year contracts to get a billion or two because they ran out of it in six months.

STEVEN H VAN WIE 25:44

Sure.

Adam Van Wie 25:50

Yeah, that's. I mean, or they can issue some muni bonds that no one's going to want because they can't don't have the revenue to back it up. I mean I don't know what you.

STEVEN H VAN WIE 26:00

Do imagine New York City's credit rating in the bond market.

Adam Van Wie 26:03

Wow. I mean after, in two years it's going to be pretty bad.

STEVEN H VAN WIE 26:07

Junk bonds of New York.

Adam Van Wie 26:08

Yeah. Well this all leads into a pretty good segue into something I wanted to talk about. There was a new, a new study done by what is it? Go bank go banking rates. And it revealed, looked at the top 50 biggest metro areas in the US and said what do you need to be comfortable? And then what do you need to. Or no, what do you need for necessities? And then what do you need to be comfortable? And to much to nobody's surprise, the top four cities were all in California.

STEVEN H VAN WIE 26:40

Go figure.

Adam Van Wie 26:41

San Jose, San Francisco, San Diego and Los Angeles, followed closely by our good friends in New York. York at number five. And so I'll be curious if number five actually climbs up that, that list in a little bit. And then we go back to California. We have Long beach, then Seattle and then Oakland down another couple spots and then way down at number, let's see here. Number where are we? Jacksonville, Florida, number 34. The average salary needed for necessities is $44,938.

Adam Van Wie 27:19

And the average salary needed for comfortable living was just under $90,000 a year. Not bad, really. I mean, I think we're in the sweet spot because we're surrounded by Fort Worth, Tucson, Albuquerque, Omaha, Houston, like pretty normal livable cities. And then when you really start getting down the list where it's really affordable, you're looking at Baltimore, Wichita, Memphis, Detroit, and so those were the bottom four cities that you may not feel as safe in. It seems like I like that sweet spot in the middle of nice, comfortable, livable, family type cities.

STEVEN H VAN WIE 27:59

Speaking of public safety, I remind everyone, at least within the sound of our voices here, that, that this is no King's Day and there'll be rioting in the streets some places. I think you will see some demonstrations in downtown Jacksonville, but probably it's not.

Adam Van Wie 28:17

Going to be no big. No, not, I doubt it. No kings, just a ridiculous concept. But whatever. We're not, we're not talking politics today. We're talking finances. So did you see what the average price of a new car is now?

STEVEN H VAN WIE 28:35

No, but feeling I should sit down. Oh, wait, I am sitting down. Go ahead. Yeah. 50,000.

Adam Van Wie 28:40

Do you have a guess?

Adam Van Wie 28:43

It is $50,000 now.

STEVEN H VAN WIE 28:45

Yeah, I've been watching it sneak up through the forties little by little.

Adam Van Wie 28:48

Yep. The average new vehicle transaction price exceeded $50,000 for the first time after rising for more than a year. The average transaction price was up 2.1% from August and 3.6% year over year, making it the largest annual gain since 2023.

STEVEN H VAN WIE 29:06

What's the average car payment nowadays?

Adam Van Wie 29:09

Did they get into that? I don't think they had. They, they didn't break it down that way, but.

Joey 29:15

Oh, I, I actually saw this article. I think it was, it was in the high six hundreds.

Adam Van Wie 29:19

That's. Yeah, I was going to say in the sixes. I think I read that.

STEVEN H VAN WIE 29:21

And that's. But get that by going out seven.

Joey 29:23

Or eight years, I was about to say that that's a big note. Car. Car notes have just been getting longer and longer and the payments are still going up.

STEVEN H VAN WIE 29:30

Now I, I'll give them one thing. The, the cars are built to last longer and go more miles. That's a good thing.

Adam Van Wie 29:38

That kind of allegedly Some, some, some brands, not others.

STEVEN H VAN WIE 29:41

You can't get over the initial depreciation. No, it doesn't take long when you have an extended loan like that to get underwater with your, with your car loan. And then if you want to trade or anything like that. Too bad.

Adam Van Wie 29:57

Mm.

Joey 29:57

Yeah. I'd say most listeners, if you're buying new cars, you should talk to your insurance person and the financing office about gap insurance. That is just if you don't have that, that can.

Adam Van Wie 30:06

Don't talk to the finance person at the dealer though. Buy it through your insurance. It's way cheaper.

Joey 30:10

It's generally way better.

STEVEN H VAN WIE 30:12

If you're buying a car, you tell them right up front, I'm paying cash. Otherwise they're going to try to. They'll take longer and they'll be pounding you. Unless, of course, you want to use it for a negotiating point. Then you say, well, show me what you got.

Joey 30:25

Well, that's how I always wait. Because if sometimes, because they make most of their money on the finance, they do. So I let them think that's where we're going.

Adam Van Wie 30:27

Yeah.

STEVEN H VAN WIE 30:32

I just can't stand all that. But it depends on your outlook and your age. Partly, of course, buy new cars is something that is done so seldom that I'm kind of out of practice. Except for one.

Adam Van Wie 30:45

Yeah, yeah. And so I've actually taken the financing sometimes and then just paid it off just to get a better deal too. Because it doesn't really cost you anything to get that financing. And if you can get a better deal on the car, make one payment and then pay it off, why not?

STEVEN H VAN WIE 31:00

Yep. Let's see what we got here. The, the impact. Roger was just asking us about the impact of Mamdani on things like the stock exchange, that sort of thing, since it is the financial capital of the world. And we assured him that smart business people are always a step ahead of the game. And I say this relative especially to the stock exchange, where Texas opened a stock exchange, an alternative one recently, and it's growing like crazy. So any corporation that decides that they want to get out of that area can just put their listing over to the exchange in Texas. And if you want to relocate your business, as Elon Musk has for a couple of them, you can get out of Delaware or out of other places. And one of the places you can land there is also in Texas. It's more user friendly now. So we're on it. Don't go anywhere. We'll be right back. This is the Van We Financial Hour. Steve Van We.

Adam Van Wie 31:20

Game.

Adam Van Wie 32:03

I'm Adam Van We.

Joey 32:04

And I'm Joey Loss.

STEVEN H VAN WIE 32:05

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

STEVEN H VAN WIE 32:10

Trivia questions out there. In the years between 1966 and 2000, inflation was up 431% Medicare per person was up way more than that. It's in excess of 630. You want to take a shot, be my guest. I got a big window on it too. All right. I wanted to make a quick announcement before Joey digs into something. Oh yeah. The estimate for next year's health insurance premiums has just come out many states. It will not be unusual for your premiums to go up 60%, 6 0%

STEVEN H VAN WIE 32:51

and it's going to lead to a lot of fraudulent insurance selling. They're going to sell you on what they say is an insurance policy. It'll either be a catastrophic only or a reimbursement plan or something like that. Be very, very careful during this open enrollment season. And when, when you look at the Medicare Advantage plans that are being hyped so much right now, be careful with those two. They have the right to change your benefits and your providers at will be careful. If you've got providers that you care a lot about, stick with what you've got.

Adam Van Wie 33:27

I hear very mixed reviews on those advantage plans for the right people. It depends which one you get too.

STEVEN H VAN WIE 33:32

They're great. Yeah, that too. Just I warn everybody you're going to have a little culture shock when you see your bills.

Joey 33:41

If you can find an expert who's been doing the, been in the business for a long time, who's worked with some people, you know, who have good things to say, that's, that's a good place to start. Because that is really one of those ever changing insider, full time job, expertise, industry.

Adam Van Wie 33:49

Yeah, I agree because.

STEVEN H VAN WIE 33:54

And like everything in life, a reputation takes years to build in five minutes to destroy. So if you got a good reputation in the market, start there. All right, Joey, what's cooking?

Joey 33:58

Yep.

Joey 34:04

All right, so in previous shows we've talked a little bit about the US's looming population issue where

Joey 34:13

our replacement rate or our birth rate currently is about 1.6. And to maintain the current population of US citizens, we would need a birth rate of about 2.2. That's a bit of a concern and a phenomenon across all of the Western world where birth rates are well below 2.2. Africa and the Middle east are really the lone two exceptions. Indonesia, Polynesia, those areas are about a little above 2.2. But really the boom in population of the future is coming from Africa and the Middle East. China, I hadn't really paid attention to this. China has a birth rate of one that is remarkably low.

STEVEN H VAN WIE 34:51

2.2 is replacement.

Joey 34:53

Yep. And they had a one child policy. Through 2016, after which they relaxed to a three child policy. And as Steve pointed out during the commercial, now they're begging everyone to have children because at the current rate of replacement that they have, the current birth rate, their population of well over a billion would fall to the high 600 million by the end of the century. Which the reason I wanted to bring that up is that's just an angle I haven't thought about in the context of all that's happening. It does a couple things. One, it explains a little bit of the urgency. They do have a moment they haven't had historically on the world stage and they're trying to seize it with urgency.

Joey 35:32

I think there's a sense that the way population works, it's such a slow moving figure. This isn't something that they can change for the end of the century. It's a trend they can reverse and hopefully improve for the next century. But it's not something they're going to be able to change at that time. I think that's interesting, the implications of that for world trade. I mean, historically, when you have a declining population, you have a dramatic gender imbalance as they do during the one child policy. Sons were favored big time, among other things.

STEVEN H VAN WIE 36:01

It plays hell with your social programs.

Joey 36:04

It definitely will mess with the social programs. But if you want a society to struggle, history tells us there's no better way to do it than have a declining population and more males than females. I mean, that's just a bad situation.

Adam Van Wie 36:06

Absolutely.

STEVEN H VAN WIE 36:15

Yeah. Even in Scandinavia, they're, they're under replacement. And they get all kinds of benefits, everything. It doesn't hit me as being totally logical that these people, countries like that are declining as quickly as they are. Japan has been its own problem for a long, long time because of their xenophobia. They don't want you working there, much less living there or becoming a citizen unless you're Japanese. Well, they're reaping the rewards. They've got the place so expensive now that nobody can afford have kid kids over there and they are imploding as well. Russia, Russia doesn't need to send all their young guys to war and get them killed. I wish Putin would wake up to that fact. They don't even need any more land because they just the kind of light on people.

Joey 36:19

Yep.

Adam Van Wie 37:08

Yeah, I'm. People are concerned about them invading Poland and I'm wondering if they even have the numbers to do it. I, I don't think.

Joey 37:16

Or the morale at this point. I mean they've got to be tired. Yeah.

Adam Van Wie 37:17

Yeah, that too.

STEVEN H VAN WIE 37:19

I don't think there's a chance. And our we are under replacement rate as far as natural birth. Yeah. We've been living off our immigration. A lot of our immigration is now reversed because we're sending people away.

Adam Van Wie 37:34

Yeah, but that's, there's two types of immigration. There's legal and illegal and legal. We absolutely need to keep that going. We, it is what is going to keep our system afloat.

STEVEN H VAN WIE 37:45

We need to get our, our native born Americans back to work. A lot of them aren't there yet. They just don't want to apparently. And until the wages rise up enough. They've been depressed for so long. Until wages rise enough. That's not going to be real easy. What Trump tried to do with the H1BS, I think they're called that. You know, I've got a skill visa and the company's going to hire me, bring me in. He tacked a hundred thousand dollar price tag on those and the courts have not been happy to see that. I think at least one judge has said for now, of course if Trump does it, there'll be a court somewhere to undo it. And that's a given. Course, of course. So thank goodness the Supreme Court got back to work because they're going to be inundated with Trump related cases. Just exactly a waste of time. But it's not a wasted effort if you have to undo things that are egregious. So I support it. I just wish that I think it was Gorsuch reprimanded all the federal judges across the country and said you are not the President of the United States. You cannot make federal policy. And to a person, they stuck their fingers in their ears and did it anyway. We're going to have to have some serious penalties, maybe some judicial impeachments or something like that to get them out of Trump's business and which is really our business.

Adam Van Wie 39:12

It's really not Trump. It's the executive branch. Like they're ruling against the executive branch.

STEVEN H VAN WIE 39:18

Lay off people that work for you.

Adam Van Wie 39:20

Yeah. What are you talking about? That doesn't even make sense.

STEVEN H VAN WIE 39:23

Well, not during a shutdown.

Adam Van Wie 39:25

The joke is that it's surprising they haven't ordered the hostages returned to Hamas.

Joey 39:31

Well, to tie this Chinese population thing with, with the current trade situation, you know, Xi is not a dumb guy and they, I mean he's obviously aware they're begging people to have children. The recent rhetoric has been maybe the US position isn't as strong as we thought it was against their withholding of rare earth minerals and things like that. On our side, we have chips that are the best chips in the world. We have just all sorts of machinery that goes into the robotics and the AI feature that they need to replace the problem that's looming because their whole built, their whole setup is predicated on very cheap labor that they have complete control over. I mean, so I think the table's a little bit more even than. Than recent discussion has suggested.

Adam Van Wie 40:16

Yeah, I think so, too. But we. And we've hurt them a little bit by buying 30% less stuff this year, but they've made it up and by picking up new customers all over the world. So I do think it's probably pretty balanced.

STEVEN H VAN WIE 40:29

I mentioned. Yeah, I mentioned last week that rare earths are not rare. Mining is rare.

Adam Van Wie 40:36

Yeah.

Joey 40:36

And processing, that's the incredibly difficult part.

STEVEN H VAN WIE 40:39

In the 20th century, we were the number one miner and exporter of rare earth metals. Then everybody started shutting down because of the environmental movement. And I read two stories this morning. One said that the mountain pass, which is the biggest mine in the country in California, was open, and the other one said it wasn't open. I know it at least had been closed. I don't know if it's been reopened to any degree or not. But we've got lots of it up in the northern tier Estates, particularly Texas has some major rare earth possibilities that we're developing. This is what happens when you don't have leadership in Washington that looks forward. And now all of a sudden we have someone who actually looks forward saying, look, we got problems coming up in this regard. What do we do today to fix it? And they are doing it. Trump already has deals with Ukraine and he's about to sign one with Argentina as well. And then there's all the domestic stuff we're doing. And, you know, it'll. It'll go away, but we might get hurt first. All right. Way back in 1966, the estimate for the first year cost of Medicare was 3 billion. It actually cost 3.1 billion. Rounding error. Good by me. In 1970, four years later, the estimate was 4 to 5 billion. And the actual expenditure was 7.7 billion. You're starting to see a little spread move into the numbers. 1990, the estimate was 12 billion. It is now or did. Then 1990, it hit 110 billion, which was nine times more. So during that period of time, inflation was up 431%. Medicare was up 4,400%.

Joey 42:36

Wow.

STEVEN H VAN WIE 42:37

And now we're trying to give it away again to people who do not deserve it. It is unbelievable what the government is bad at doing, projecting cost wise because they don't allow anybody to use, as we talk about a lot, the. They always use the static score and they don't allow any behavioral changes from consumers and business people and so on. But when they make a policy, people react. You all do it, we all do it. If something gets more expensive, we do less of it. If it gets cheaper, we might do more of it. But you cannot project on a national scale with any reasonable ability everything based on the rules of the Congressional Budget Office, which require them to work on a static basis. If you double taxes, you make twice as much money. And everybody knows it isn't true. It's been shown for years and years and years it isn't true. And that's what happened with Medicare and it's not going to get better. And now we got 60% increases coming in medical costs. Sorry to end on a sour note. I'll try to be more upbeat next week. We'll see you then. Thanks for listening. This is the Banaway Financial Hour.