¶ Understanding County Commissioners and the Economy
You and I are told increasingly we have to choose between a left or right . Well , I'd like to suggest there is no such thing as a left or right . There's only an up or down . This is the no Doubt About it podcast . No doubt about it . And now your hosts , Christy and Mark Runcetti .
Welcome to a fantastic Thursday . Here on the no Doubt About it podcast , we have a special guest , and then we have Scout .
Scout is also always here now .
Yeah , and she's . Let's be honest . She's trying to get a word in as we're getting this thing going , so we cannot guarantee that this is not going to be an uninterrupted podcast .
I'm trying to pet her , but we may have to add her to the intro , like maybe Mark and Christy Runcetti and Scout and Scout yeah , good job , girl , good job .
Well , walt Benson is joining us . Walt is a county commissioner here in Burnley Hill County , correct , correct , and that is . That's no small feat , by the way , my friend .
Well , I'm going to interrupt really quickly on that because I want to know what is a county commissioner . I feel like give us like a 30 second spiel on what you do .
Great question , okay . So all right , I'll talk about Burnley Hill County . It's the largest county in New Mexico , right ? The city of Albuquerque is within the Burnley Hill County , so let me , let me compare it to city council , because that maybe that may make a little more sense .
The city is very similar to our nation's government , where you've got an executive like the president , but that's the mayor . Then you've got Congress , but that's the city council . Now you've got nine city counselors . So to get anything passed , you need to get five votes . But even with five votes , you have an executive who can override , right , with a veto .
Okay , so that's the city council . Burnley Hill County , which is extends around the city of Albuquerque , there's five county commissioners , there's no mayor , so there's no veto . And with only five votes , all you need are three to get anything passed , which is kind of scary because it's easy to get three votes Right . Well , for some people it is .
You're a .
Republican on the , on the county .
The long range you're on , that Exactly .
So , but I'm still able to work across the aisle and get quite a bit passed actually . So you have three passes , but but then what does a county commission do ? Well , there , every county commission is responsible for your property taxes .
So you're the guy . Yeah , yeah , no , exactly , exactly , no , exactly , a problem with you , sir ? Yeah , exactly .
So the legislature determines a lot of the property tax rates , right . But then the counties can go above and beyond that , so you got to be careful . Then they spend that property tax as well as the grocery seats tax two forms of revenue . Then they issue bonds and that's the debt that the county goes into .
So and then within Burnley Hill County we use our money . The biggest item is the Metropolitan Detention Center , the county jail , and which is a . You know , that's a , that's a big nut . Then you've got the Unimate Hospital , you've got APS . We give a lot of those funds . They get funneled straight to APS and then .
And then you've got your county government itself , where you're dealing with infrastructure , with potholes and plumbing and and electric and and roads and streetlights and stuff , wow . So and then we set laws Like the I was thinking of . An example was the paid sick leave . That is it's state law now , but at first started in Burnley Hill County .
The county commission passed it because of the language and how it was written . It was . It was written anti-business , and so I was opposed to it . It passed anyway and then so that applied to all businesses in the county . Then the city took that momentum , passed it . So then you've got the largest county in the state who'd already passed it .
So then the state legislature passed it and passed for the whole state . So , you got to be be aware of who your county commissioner is .
And you're on the ballot again this year , so in November .
Now Trontrade , and popularly . That's not why we actually have you on the ballot .
I appreciate the education . No , no , no , it's interesting . No , it really is .
Because it is . I mean , even for people that are involved in the process . You don't always know what certain you know perv's are for certain jobs .
You don't hear as much about the county commission as you do say you know , even in the in the city council in Albuquerque , you hear far more about what goes on there , maybe sometimes sort of the wrong reasons , but we do hear about it . So we appreciate you coming in , and the reason we wanted to have you come in is because you're a financial advisor .
Yes , sir , and one of the things we talked about as we start this new year is where are we here ? And I think so many families in the state of New Mexico and that listen to us across the country are feeling the pinch of an economy that you know .
It's funny If you sit there and look at some of the mass media coverage and we pulled a few headlines here which is there's two different things happening here . Right , there's the media narrative of listen , the economy's better than you think , shut up and enjoy it and it's go . Right , I mean you see it everywhere the great disconnect .
Right , this is from the New York Times why voters feel one way about the economy , but act differently . Right .
Exactly Okay .
They say Americans are angry and anxious and everything else . And then here's another one Wages are rising , jobs are plentiful , nobody's happy , shut up and enjoy it , that's right . I mean so you know , so you see some of that from the mass media right .
However , when you start to and here's the , this was my favorite one right here bad vibes around a good economy .
It sounds like old Joe made that one up himself it is .
It's like the White House brings them in and says , listen , you don't understand how good this is . And then the New York Times walks out and they're like , yeah , no , no , it's totally true . It's totally true , but then that's not what most families are feeling . Do you get that impression ?
Oh , totally , totally . I mean I don't even know what these headlines I get it . I mean they're looking at GDP , gross domestic product , but a lot of that's government spending . Well , when you dump you know tons of money into Ukraine , then the GDP goes up .
But yeah , in terms of the average Joe , you've got Wall Street and then you've got Main Street and Wall Street , you've got the stock market at all time highs , but that's led by six companies . You take out those six companies , it's flat .
Then and I don't want to get into too much nerdy stuff because I can totally nerd out but if you were to equally weight all the businesses minus those big six or seven , it's at a loss , the stock market's at a loss and that's where the Main Street businesses are , the majority of our businesses in America , those they're struggling .
Yeah , no , and so let's break down a few different things here . We'll get into pieces of this as we go , but let's start with the stock market because , you're right , you bring up something really interesting , which is , if you do , just look at your portfolio right now , in many cases maybe your 401k , or whatever my 401k is not skyrocketing by any stretch .
Actually , individual stocks are doing okay . The invidious of the world are doing okay .
Yeah .
Right , I mean , if you got some of those that's one of the six . That's one of the six exactly . But if you're looking in a broader sense here and you're sitting down with a family in New Mexico who says , yeah , you know , we have a little bit of a mix . We've put away some money and we've got some money in the stock market .
We've got some money in some other places , how concerned are you in the next year and what's going to happen in the stock market ?
Yeah , I'm very concerned . Yeah , I mean the stock market's at an all time high , all right .
¶ US Debt, Stock Market, Indicators
Meanwhile , you've got economic indicators , so one of which is the inverted yield curve . We're talking about that beforehand . So a yield curve should be , you know , if you can envision from left to right , it should be going up . That's a normal curve .
If you've locked your money just think of CDs right , if you lock in for a three month , it's one interest rate , but if you lock it in for five years , you should be paying , getting it , receiving more .
Well , the yield curve is based on US treasuries and right now it's inverted , which means that if you get short term treasuries , you're getting paid more , and the longer you go out , you're getting punished for it , so you're earning less .
Every recession we've ever had has been preceded by an inverted yield curve , and this inversion is steeper than anyone we've ever had , partly because the Fed has raised rates faster than at any other point in US history to try to pull back the meteoric rise of inflation that they caused by dump and six trillion dollars in the economy .
So you've got this inverted yield curve which precedes recessions . When a recession hits , companies start laying off employees , people start spending less money . They go out to eat less . They go on fewer vacations . They buy cheaper tennis shoes , whatever . Buy fewer cars . That starts pulling down earnings in the stock market .
And you're seeing that to this point . We are seeing that in some areas correct , we're starting to Right .
We're starting to see it . Yep , then you've got investors in the stock market . They start selling what they own because they need the cash to pay for bills . So that's another factor that starts putting downward pressure on the stocks . So we're expecting a major correction .
Okay , let's talk about what that means . So if you just look now , if I open the Fidelity app on my phone and I see where the market is today , basically we're at record levels . What kind ? When you say a correction for people who have let's just throw a number out there they have $10,000 in stock value right now . Right , yeah , okay .
So if they have that value , what kind of corrections do you think we're likely to see ?
Okay . So if you're in the S&P 500 , let's look at okay , and I think there are opportunities out there , but I don't think the stock market is the opportunity .
We're expecting a 30 to 50% correction which , if you look back at 2007 , that was the last big correction we had right and that led into the Great Recession , which was the worst recession since the Great Depression . The stock market fell 50% . That's a 50% correction right there .
Now the dot com bubble so that's half the value of what you'd have quickly , exactly .
Okay , so you were saying if you have 10,000 , you're looking at 5,000 there . Back in 2000 , the dot com bubble , that correction was 30% . So the other thing is it typically takes two to three years for top to bottom for a correction .
We look historically so I don't expect it to be forever , but when we do start seeing a correction I think it'll last probably two years around .
And even the 1929 market correction the stock market crash of 29 , which then led to the Great Depression that fell 90% but damage was done in three years If you were able to sell high avoid that correction and get back in at the bottom you're great .
Okay , so we know . If somebody told me coming here comes a train here it comes , it's gonna wipe out your half your net worth in the stock market . I would say to you next , where do we go ? If I've got some of the if I've got , if I'm a , if I have the ability to be able to move some assets , where should they move them ?
So what we're telling our clients is we're moving out of the paper assets , like the stock market , moving into hard assets , real assets that you can touch , that don't file bankruptcy . So that's like , so we're . We're moving to food because people need to eat , no matter what . Yeah , right , so , but we're not doing like individual .
Yeah , you're not going to Nabisco . Nabisco , exactly Right .
Or Coca-Cola Right . We're going to the stuff that makes Nabisco , stuff that makes Coca-Cola right Not Starbucks but coffee beans , not Coke but sugar , wheat , corn at the base levels . Then you've got the stuff that makes the world run right , and that's commodities . So energy is in there Oil , natural gas .
People still need to heat their homes , need to fill up the car tank . Copper is in there , whether you've got an electric car or a gas car . If you've got a gas car , you need oil . If you've got an electric car , you need electricity , which is really still coal and some solar panels and stuff , but a lot of fossil fuels are fueling that .
However , you still need a lot of copper . So those are the commodities . And then , and then golden silver also . I know that goes back to the US dollar . So right now the US is in the most debt that we've ever been in compared to GDP , except for one other time in history which was World War II .
That was good debt , though , and this is why I tell our clients you've got to respect debt , just like so . All y'all listen out there respect debt . It's a powerful , wonderful tool , just like any other tool , but it can hurt you if you don't respect it right . So think of a gun , or fire gas stove , a sharp kitchen knife .
If you respect it and use it as intended , it can do great things , but if you don't respect it , you can get really hurt . Well , the US right now is in crazy debt . So in World War II , there was good debt . We were beating the Nazis , we were harnessing nuclear power , we were creating the greatest military the world's ever seen .
We were building the interstate system , which is generating commerce . We were producing things on shore . Now our debt is going to entitlements and the military , but the military is not the same thing . So last year we spent billions in Ukraine , but we don't know where that money went . So I worry about the US debt . Meanwhile , what's it backed by ?
The US dollar is backed by oil . Really , it's the Petrodollar right . It used to be backed by gold , but in 71 , nixon took us off the gold standard , but in 73 , kissinger put us on the oil standard , setting up the Petrodollar with King Faisal of Saudi Arabia .
So since 73 , the US dollar has been in high demand because the world needed it if they wanted to buy oil . Well , now the administration is saying oil is evil , so is our governor , so there are a lot of politicians in the state that do , even though that's our number one resource . It is wild .
It's crazy , right ? I mean , yeah , do you look at the revenue we have from oil and gas ? And this is what's interesting Rig count in the US 20% lower than it's been . Yet we're producing more than any country in the history of the world . Oil and gas companies continue and our energy companies continue to basically make up for bad policy . It's unbelievable .
Yeah , they make up for it . They're doing it in spite of bad policy Right yeah . Yeah , good point . So with US debt , and then now countries are starting to , because we're saying oil is evil , saudi Arabia is now selling oil directly to India with Rimbabie , without US dollar as an intermediary . So without that , then what's going to back the debt ?
Meanwhile , our Congress is still borrowing more and more and going into further in debt . This year , us debt payments in October we just actually surpassed $1 trillion , which is more than our military budget , and that says a lot . We got the largest military in the world and our debt and actually it's not full debt , it's just interest payments .
So that's where the gold and silver come in , just as a safe edge against that .
Right .
Well , I mean , I guess a lot of folks you know because I get into debates sometimes occasionally on Twitter with people and I get a little fire off a little bit . But the biggest argument that I see sometimes when we talk about the economy is people will come at me and say you're just driving fear because you're Republican .
Conservatives just want to scare people . What's your answer to that ? I'm like I just look at my wallet and I look at the receipts from the grocery store . It's not rocket science to me .
No , exactly , actually . I mean , that statement is so . I mean so , the reality is so plain and that just that accusation that you're just trying to drive fear doesn't even make sense to me . I mean , it's there , it's there . Well , our debt is all time high , stock market is all time high . The yield curve is the steepest inversion we've ever seen .
I mean , that's just , you see a tornado coming . You're not driving fear , you're just calling out the tornado , that's out there , and you mentioned the debt payments .
Well , also one of the direct results of trying to get inflation . This is why the Inflation Reduction Act was so damaging , right ? What was the fact that it drove the increase in interest rates which , by the way , that doesn't happen in a vacuum that impacts exactly what we pay on the debt .
Boom exactly .
So that jumps up too , and so all of this . It was a catastrophic error . When you look at this inflation reduction , that , when you look back at that policy , are you just amazed that it made it through ?
So , yeah , well , kind of . But then you know , when you start promising free stuff , people start raising their hand , you know , and say , sure , that sounds good , but onto that . Back to that point is part of that was deferring the student loan payments , right , so those just kick back in October .
After being off for two to three years where students didn't have to pay back their student loans In October , they kicked back in In October . We've recently found out that 40% of those students were not paying back their student loans no-transcript . Yeah , exactly , that's a huge number .
And probably because they didn't have the money , because they've been used to living on it , and if the average student loan payment is $500 , you got to come up with that somewhere . But let's say they finally do so . Obviously those individuals weren't paying off debt or they weren't respecting debt . Right , it's something that you got to be responsible for .
So if they're not paying debt , then is that going to trickle over ? Because what about the individuals who went through college or didn't go to college and never took out a student loan ? Right , they're saying , well , yeah , exactly , they're saying wait a minute , I don't have any student debt for you , but I do have credit card debt .
Right , what if I just don't pay that ? Yeah , Okay . So let's talk about where this goes . You see the massive debt $34 trillion or wherever we're at today Right just under $34 trillion . Okay , so that continues to go . It continues to weigh down our budgetary structure , starting to collapse because of it , right ? So where does this go to you ?
Well , do you Are we going ?
to have to collapse ? Are we going to have to look at a complete economic collapse in this country ?
Something's got to change . So , all right , the easiest way to do it is to cut spending and raise taxes . That's it right . And that goes back to individual economics . If you're not making enough to cover your debt payments , you got to start cutting your expenses and generate more income . This is never going to happen .
Politicians don't get reelected by raising taxes or by cutting benefits . So at some point there's got to be a reset . There's got to be a reset when actually in 1971 , nixon took us off the gold standard . That was a reset .
Before that , the US dollar was backed by gold , but we were going into too much debt for Vietnam and countries started to collect on that debt with gold because they were worried that we were just printing our way through it and we didn't have enough gold and Fort Knox to pay it off . So Nixon said we've got to defend the currency .
We're going to go off temporarily . He said we're getting off the gold standard and we've never come back on . So that was a reset .
So we're going to reprice the debt . Are we going to wake up one day and the money in your bank accounts going to be worth half what it was Could be ?
It could be . So you're just monetizing debt , where you just slash everybody's checking accounts with the money that's in your bank . You've seen other countries do that , typically smaller countries .
We could just monetize our debt by just printing more , but then it becomes a vicious cycle of ultimately hyperinflation , which is never good for anybody , and then you've got a reset coming . Meanwhile , though , there's countries that are trying to replace the dollar as the global standard China , mainly .
Right , china , yeah , exactly , china is the number one country , but they're part of a group called the BRICS Nations Brazil , russia , india , china , south Africa and they've been working together . Especially after Russia invaded Ukraine and we cut off US dollars from Russia , those five countries started saying , oh , they can do that . What if they did it to us ?
So they've been working to create trade standards between each other to where they can avoid the dollar altogether . Now , meanwhile , we keep going up greater and greater in debt . So , yeah , there's an issue that Washington , at some point , they need to wake up to this and take responsibility .
Okay , so just on a , I'm just coming at this from like a normal everyday Joe kind of person , because obviously I don't play the stock market . I tried that a couple of times . Mark made fun of me basically .
Well , she just won off by a stock and , just like I bought Target today .
They're like what ?
By the way .
That was 20 years ago . Let's just make sure that's very clear .
But you know , I was trying to kind of learn what I could . Obviously that's not in my arena and I have never claimed it is . But let's just say I am just a normal person right now , that maybe I have a little bit money put in the stock market , maybe I don't know if that's something
¶ Financial Preparedness and Debt Management Advice
. But really what would be your advice for the folks that are just trying to get by every month right now , like what should we be looking out for ? What should we be doing ? Is there any sort of preparatory things we can put in place so we don't just bottom out in our bank accounts ?
Yeah , okay , first of all , let me say I love that question . I love that you asked it because I start geeking out and Mark and I start talking to the language .
Oh yeah , you have to go all day .
I was , I was . I've told you guys before my um you both have the only podcast that my wife and I both listen to independently , because I've got a list of podcasts that she does . We both listen to it and then we'll talk about it with each other , and it's because of questions like that .
Go , amy , that's right , we'll go a little bit more on the bus Right before you answer Christie's question , ava , let's go to graphic five , which gets to Christie's point , I think , and that is since 2020, . Here are some of the increases that families are dealing with and that Christie's talking about . You know , overall prices up close to 20% , 17.6% .
Food prices up about 21% , rent up 18, . Electricity up 25% . So that gets to Christie's point on everybody starting to feel this pressure .
Exactly , and that slide is perfect . That goes back to why nobody believes all the good headlines that , hey , everybody celebrate , let's do cartwheels . The stock market's all time high . Because of the reality , when you go to the grocery store , you can buy less . Actually , we saw that in Walmart's earnings .
They reported record earnings last quarter , but the shift had changed . It went away from household goods to groceries . Bingo , exactly . So people weren't spending less , they were spending the amount and Walmart was earning just as much , except that people had to pay more for broccoli and chicken and stuff . So , okay , so back to your question .
Let's get brass tacks , all right ? So I've already said respect debt . So respect debt means that debt is not evil , but it's a powerful tool , right ? So keep a limit on your credit cards , don't use them and if you have to use them , pay them off as quick as you can . The interest on those are killer . Build up a small savings account , right ?
Dave Ramsey recommends having a $1,000 savings account . That'll cover most instant emergencies , like a radiator or a water heater or something Beyond that . You start working on trying to get about three months of savings , three months worth of expenses , in your savings account . Put that in a high interest savings account .
Your bank or credit union probably isn't offering high savings rate . Talk to a financial advisor or see if they can put you in a money market that's earning over 5% , and then just forget about that money . Then keep saving . Try to save 10% if you can Put that in that's your monthly income . Of your monthly income , thank you .
Put that into an IRA , some kind of retirement account . If you've got a 401k , put that in there . If you've got a 401k , then your company's matching . Take advantage of that . And then just be disciplined . Be diligent Now how that's invested . Okay , if you're in the stock market , I think it's overdue for a correction , right ?
So even a 20% correction would be a massive If it turns out to be more like 30 to 50% , like the last two corrections , which , if we looked at the growth of the stock market , you could see where that's coming from . But I like hard assets , right .
There's also money markets that you can put your investments into that are earning 5% and , yeah , you're not gonna get rich on that , but it helps keep your powder dry while in the meantime a correction does come .
And then when everybody's saying all right , you probably remember in 08 or in 2001 , and two and three people were saying I'm never investing in the stock market again .
That was definitely common . I kind of felt that way personally .
Yeah , sure , that's when you get back in the stock market , right , right .
So let's talk about Ava . Let's hit graph 13 for a second , and this is what's scary to me . So let's play a bit of a dooms game here . And the reason I say this is the share of credit card balance transitioned into delinquency . These are people that are unable to make their payments . Okay , so you could see .
What you're looking at is in the left side of the graph . For those of you who watch this on YouTube , you're seeing the great recession , or time just coming out of the great recession , where you had huge delinquencies and now we went down . Obviously , came out of the great recession , those numbers went lower and now they're starting to spike back up again .
Okay , if you're in trouble , okay , and we talk about hey , try to take these steps which you brought up with your good idea . But if I'm a working family and I have to take on some debt , if I say , look , I just can't get to the end of the month , so where is ? If you're going to take on debt , where's the place to do it ?
Sure . So take out debt with the least amount of interest and also , and just work , work at it , just respect it . So it's like if you're gonna go hunting , go get a good rifle that you can hunt with , but respect it right . Know that it can hurt you if you let it get out of control . Same with debt . I'm not opposed to debt .
I just I've seen lots of families get really hurt by it . So if you have a line of credit in your house , that's , those are the best interest rates , right . If you go join a credit union , credit unions offer credit cards with lower interest rates . And if you do get in trouble , credit unions will work with you . You know the big credit card companies .
They won't , they don't care , they just don't write you off and then you destroy your credit Exactly and they're not gonna work with you . So , yeah , that's what I'd say . But , Mark , back to that . That's a great graph . There's also last month , and Jamie Dimonov . He's the CEO of JP Morgan Chase , which is the largest bank of the world .
By the way , JP Morgan Chase is the largest holder of physical silver in the world , Larger than any individual , larger than any government .
That shows you some of what they're thinking is Exactly exactly .
But Jamie Dimon was talking about the similar conversation that we're having about the kind of the canaries in the coal mine . One of them is the credit card debt . Also , defaults on subprime auto loans is the highest ever in US history . It was last month , so a subprime auto loan is similar . Everyone's familiar with the subprime home loans , right .
For individuals with bad credit right .
They have to get a loan with a higher interest rate to buy a house . Well , they've remodeled that whole mortgage system since the crash , but auto loans have the similar profile . The highest ever default rates were last month in subprime auto loans , so yeah , that is the canary . Right , and there's multiple . The other thing is is during the COVID savings .
One of the good things about the stimulus money that we saw is that individuals were building up their savings and they were paying down credit card debt . Well , since then , the credit card debt has returned back to levels higher than it was before the pandemic , and Then savings accounts have dropped to lower than they were before the pandemic to .
So that means that it's this money that's still working its way through the system and people are still relying on it . Also , people got used to spending a lot of money . Now that the the stimmy checks aren't coming in right , they're starting to rely on Credit cards more often . At some point , those top out .
It's insidious too , because if you look at the numbers we've got here , look at how many different areas families get hit , right , you don't think about it . Your pets cost you 17% more to feed them the way you did . Yeah , we've mentioned groceries , restaurants 24% . Right water and sewage up 16% , rent up 20% , electricity 25 .
I mean that's the thing in , because it doesn't come in any one area . Yeah , it's like a vice that slowly just continues to turn right . And then you're like why am I in such trouble ? Yeah , it's so insidious because of that .
Yeah , exactly , and actually can you go back to that , that slide ? So if you look at those things , that's a lot of what we're investing in actually yeah right , you got natural gas there . Yeah , you got groceries . That's food . You've got major appliances and curtains those are commodities . Used car .
There's a lot of oil products , so , yeah , water sewage waters a commodity , so yeah , yeah , that's . We're seeing that . So it hurts us at the grocery store , but but it kind of helps to offset that pain when you see your investment accounts going up .
Go back up . That's a good idea , that's a good suggestion . There I , I think what is ? You know what I've always said ? I'm somebody who came with credit card debt . Right , I'm the one that put myself through school .
I had to defund my loans because I went into broadcasting and , let's be honest , you don't get rich going into television which is what how I met this guy over here , and so it took me six years to pay off my college debt . I eventually got there .
I got very disciplined and I had some help along the way to do that as far as like just creating a really strict budget , which was a change for me , because , you're right , it's like you know , you just kind of get into this pattern of the spin .
Now , what I think is happening and I'm seeing this a lot too is what you just said is that people got used to spending .
I mean , everybody was doing really well , I mean for the last , however many years 10 years , something like that for the most part and I think even now I read a report every long ago that consumer Christmas shopping , holiday shopping , was higher by far than it was last year . That too and in to me .
That scares me because I think , wow , I was the person that put every single gift and every single thing I thought I had to have in the moment on that credit card and I don't even want to know how much I actually paid for those products over the course of six years . Yeah .
So it's why I kind of press upon my kids now when they're like , oh , just put it on a credit card , mom Right , I'm like you can't put it on a credit card if you're not gonna pay that thing off . I'm definitely afraid of them .
Actually , I mean , I use them , sure , but I I try to keep it within Safe boundaries , I guess so that's what I call respect you .
You respect debt because you've seen what it can do . It's a horrible feeling right , but it did help you get through school right . Right , and so it's a great tool , like your mortgage right Car payments , like he gives you assets that then help you drive to work or whatever Help you get through school .
And bravo , by the way , for paying it off yours to loans in six years . I was watching the show with my wife the other day and there was a guy on there who had for two hundred thousand dollars in student loans for a Social social work degree that he was expecting to die with .
He was never expecting to pay it off right , and that's not respecting that right . Just think of it like a gun , right , I love guns . But you don't just toss it to a kid to play with right , and you treat it with respect . You lock it up . You make sure you're not playing with it like it's toy .
Well , you and Chris . He kind of mentioned something that's interesting and that is that we see all the pressure on Family budgets . But then , chris , you mentioned how much spending happens this past Christmas and you look at the numbers , you kind of go whoa there is a disconnect there . What is it ? What do you think's going on ?
Is it just purely adding to family debt and people are just continuing to operate the same way , but coming up with the money on a credit card versus , say , a check they may have gotten during the I think so .
I mark , I think so .
¶ Money and Policies Impact Real Estate
So when money is coming in that you didn't work for , it's a lot easier to spend , right like when you see your kids . My wife and I have four wonderful , amazing kids , but they can spend our money easier than my wife and I can right when it's not your money , it's a lot easier to spend .
So when everybody's getting stimmy checks , it's easy to spend that money . And then when it goes away , you're used to spending a certain level where you're gonna go . Well , if you're not making more money , you can go to credit cards . Problem is that that tops out at some point . Right , well , you've maxed out that credit card .
You got to start paying it back . So yeah , that that's . Another troubling sign for the US economy is Rising rate in credit cards .
Where do we see ? Okay ? So obviously there's a lot of people out there that either or still still wanting to buy a home . I've read all kinds of reviews on all kinds of articles on saying the younger generation will never be able to buy a home in the current the way the things are currently right . Do you see rates coming down ?
Do you see it being more affordable ? Do you ? What's your projections ? I know that . You know you don't have that . You know what do you call that ? You can't , you don't have the magic crystal ball , the crystal ball .
Yeah , so my crystal ball is murky . Yeah , I , you know , I , I still shake that magic a ball to see what I can see . That , and it's a great question . So real estate is unaffordable now . All right , so let's talk about policy .
So , as a financial advisor , you know I'm looking at the stock market , but I'm also looking at policies , and you can't separate politics from money . You just can't . I don't care if you're a Republican or Democrat . Pull out your currency , right . Who's on it ? You look at every country's currency . It's politicians , right ?
Who dumps six trillion dollars into our economy ? Politicians , right . Who's who's going into more and more debt ? Politicians . So who appoints the secretary of the Treasury ? The president ? Now ? Right , you got the Federal Reserve , so it is politics , and you got to look at all together .
But the One of the hardest things that has created the gap between the haves and the have-nots was after the great Financial crisis .
Ben Bernanke was the Fed chair , president Obama was in office and they lowered interest rates down to near zero , and that was great if you could Get loans , right , but if you were working an hourly wage job , renting , you've never gotten ahead . Meanwhile , if you could buy a house in 08 and 07 , your house went from whatever a hundred thousand to now $400,000 .
You have a major asset there that you didn't necessarily create it , just the economy was working to blow up your , your assets . Meanwhile , a renter is now paying 20% more .
The underclash for their rent , and so the gap is permanent underclass .
Right , exactly gap is now . You know , maybe good intentions has created drastic consequences . So now for Young home buyers I would say wait . If you can wait , just keep paying rent right now . Keep trying to save as much as you can and I think real estate prices will come down .
The high interest rates now are starting to put pressure on Sellers who want to sell their house . But if somebody could afford a certain level at a 2% Mortgage , but now they've got a 7% mortgage , they can afford a smaller house . So the home sellers are gonna have to lower their prices and we're already seeing that .
Okay , so , okay , sorry . So I'm wondering one thing on this , this same front . So I've always had this theory about real estate , and that is that it comes to me in levels . So I think their levels are real estate and they roughly are broken down at $200,000 levels . Okay .
So if you're somebody who says , okay , I've put a lot of , you know , saved a lot of money and two years ago I was able to buy a $300,000 house , okay , so you're in that house right now and you're being crushed by , say , graphic 8 , ava or graphic 9 .
So so you're seeing , you know , increased costs across the board in so many different ways , right , and as you look at it , you're like , oh my gosh , right now I Cannot afford to stay in this $300,000 house .
Yeah , but here's the problem that because interest rates have gone up so high , so quickly , that if you have to leave your house , wherever level you're on , you're going down two levels , you're not going down one . Yeah , you know what I'm saying .
So if you , let's just take another , say you , you jumped up to that $500,000 house and you , you know You're gonna hold on to that with white knuckle intensity . Sure , because you know if you have to drop out of that house . You're down into $200,000 range because of how high interest rates are , and so it will take longer for us to start that decline .
But if it does occur , it could be vicious for people could be .
Yeah , I mean , we saw a doozy in 07 , right , I don't think . I don't think the real estate is gonna fall like it did in 07 , because that was a Obviously a real estate bubble . We kind of have an everything bubble right now , though Really driven by the , the low interest rates and then the dumping six trillion dollars in Back to your , and that's a .
That's a great way to look at it , mark . Actually , I hadn't thought of it like that . Back to your question Do I think the feds can lower rates ? That's the million dollar question . Now the stock market is performing as if and here's the problem- as if they're gonna lower the rates as if they're going to exactly .
Problem is they've had to raise rates to keep inflation down . Back to your earlier slides mark because Inflation is climbing up so high so they're trying to slow down . Because when you raise rates it slows down spending . People buy less expensive homes . They buy them less often . They buy Let fewer cars less often and for cheaper , because the rates are so high .
So it does , and then that starts to trickle down , right . So then the realtor may not take his family to dinner and then the the waitress doesn't get as big of a tip , and then the waitress doesn't spend as much money on a new set of shoes or or Kid soccer practice or something . So it starts to have a trickle effect through the economy .
That's why the Fed raises rates and they're trying to pull down inflation . Problem is we've got the US debt , so it's gotta cut rates They've got to cut rates , if only for that , unless they want to just keep printing more money to pay off the debt , which is essentially a default .
I mean , you're , you're , you're , you're not defaulting , you're still paying your debts . You've just paid it with something that didn't exist beforehand . So will they do it ? I mean , they have to at some point for our own debt , but he , they've paid themselves in their own corner .
I don't know how they're gonna get out of this without Breaking more eggs , because if they lower interest rates too soon , it will unleash an inflation again , which all the homeowners will say , hey , great , my equities going back up , or the stock market is going up , but the average American will will greatly suffer , right ? So I Don't know .
But don't plan on that . Just plan on rates staying where they're at , keep renting until prices come back down , keep stocking as much away as you can for a new purchase and then , when you can afford something , even at today's rates , then then do it in your safer . Yeah , exactly , and then if the rates dropped , then you can refinance .
Oh yeah , that's true , the refinancing , so
¶ Government Budget and Economic Outlook
okay . So I also have also been reading about on a local level , our , our government budget that the governor's proposing has gone up . I think it's Triple , I think , no , 66% higher than it was when she took office . Right , she's added . She's adding to our budget .
Thanks to oil .
Yeah , okay , thanks to oil , right . However , this proposed budget that I've seen so far has no relief . Coming back to taxpayers , right ? No , no rebates , no tax cuts , nothing right Does . Is that something that you think is like ?
I mean , I kind of thought , if you have this surplus , it would be a great time to help folks out here in , you know , on a local level . Any thoughts on that , I mean ?
yeah , I know I'm with you and and I know that that was part of Mark's Initial thought when he was running is that , hey , let's give this back to the taxpayers .
And you'll rebate right .
No , I'm with you now . You know , as a , as a Commissioner , so , being in public office , I'm constantly working to try to attract businesses . I work with our economics department or Economic Development Department , a lot work with city council members Trying to attract new businesses like Maxion . That's a new one that is hopefully coming on board .
I mean , I think everybody's doing touchdown dance is a little too soon . I think it's gonna happen , but that would be a big employer here . So We've got a lot of things . I mean , if we've got the excess revenue , why don't they just do away with the gross receipts tax ? Right , right , implement a stable sales tax .
Or the income or deeply cut the income deeply cut the income tax income tax effectively 5% right , exactly , cut that in half .
So revamp that to attract a greater tax pool .
Right , so then you're attracting people here .
Then you can attract new businesses who will then employ more people the the gunners who are looking for good jobs . They don't have to leave the state , then they can stay here and they can contribute back to the state . Meanwhile , insurance costs will go down because more people are getting Right insurance from their employers versus Medicaid .
So that's where I would look . And also infrastructure start putting in new systems , plumbing and roads for to attract new businesses to it .
Well , it sounds like you read Mark Ron Kettys policy plans for the economy , because it is exactly everything .
Well , well , no , and especially now when you look at the average family getting hit in so many different areas , more and more money coming out of their pocket . An oil and gas revenue directly back to the people of the state would be critical , or I think it doesn't matter if you go the other way and you get rid of the income tax .
That's a 5% pay increase . That's a huge pay increase for a working family , right , but that's not on the not on the agenda , and I think what our politicians have no concept of is how working families are getting crushed . What they look out for is government .
They see their government and they look at this as Christmas morning every morning , because they look at the revenue from oil and gas and they say look at us , look at what we can , what we can spend , and they never realize the very people that electing them , that have elected them , are being Destroyed by this economy , right ?
I don't understand how they don't feel it .
I know , I know , mark and , and actually I brought this up at a commission meeting Because one of the commissioners said that we're the poorest state in the union and we are in terms of household income . But I said , wait a minute . No , we're one of the richest states in the union in terms of our government .
Yeah , so it's a per capita .
Yeah , we're the richest state in the nation . Yeah , per capita , in terms of what the government has at its disposal that it could bless the citizens with , and yet we don't it , doesn't they ?
they're more than happy to let people live hand to mouth Right while the richest government in the country just continues to get fatter and fatter , and it's infuriating to watch . It really is All right , we'll get you out of here pretty quickly . One quick thing , I guess we'd say well , have you look out ahead and say we sit down here a year from now .
What are the two or three biggest things that you think may may well , we may well look back on and go , wow , that was a big deal .
Yeah , um , are you talking about economically ?
Yeah , whatever .
Yeah , um , let's see . Well , I think , I think we're overdue for a major stock market correction . We haven't had one in 15 years and , um , we haven't had a recession really in 15 years . So we're overdue for that and I think we'll see that this next year at least , starting , if not in full force . So a major stock market correction , um .
So time to move those , those , those stocks , into some commodities . Is what ?
you're telling us right now , really , totally , totally on the world stage . You know , you've got the war going on in the Middle East with , uh , uh , israel taken on , hamas and and a lot of the Islamic nations . Um , the that could , that could blow up .
I mean if , if the Straight of Hormuz is blocked , we'll see oil prices just shoot through the roof , and I don't care how many electric cars are out there , oil prices will shoot through the roof . Um , you know another Another thing that I worry about is is Taiwan . Uh , china has made no bones about it . They want to take it over .
Whenever a country starts telling you that , like Russia's been saying about Ukraine for years , I'll leave them , then you believe them right . Iran has been saying we're gonna wipe Israel off the map . You believe them right . So , um , will that happen in the next year ? I hope not , but , um , that's kind of what some of my radar Okay any positive news , guys .
Everybody's just gonna go put a bullet in your head out of this conversation . So let's find something positive .
So well , I will say um , during times of change , money doesn't disappear , it just changes hands , right . So , um , during the dot-com bubble , who is leading the charge of the dot-com bubble , america online ? But where are they now , right ?
Meanwhile , google was the 18th search engine on the To come out in the market 18th I don't know what the 17th was or the 19th , but Google now almost runs the planet . Facebook wasn't even around because zuckerberg was still in high school . So Money didn't disappear , it just started changing hands , and I think this is a great time .
It'll be scary for folks , but if you're prepared , um , you're , you'll be well , you'll do well and you can make , uh , you can protect yourself . So it's not dooming gloom , it's um schedule your meeting with the financial advisor . Yeah , exactly , yeah , there you go . That's a commercial for for walt personally .
Uh well , if people do have more questions about finances , where can they find you ?
Yeah , um , give me a call , uh . 505 858 3303 , or you can call me , or uh , go to our website . My partner's greg zane is our .
Yeah , we've had greg on the show . Yeah , it's great , I mean , both you guys are . If you want to sit down with a couple big brains , so now all those guys . Yeah , if you want to have a really deep conversation about finances that you don't understand .
Yeah , fight walt and dreg .
Oh , I don't know what just happened that conversation but I feel like we discussed a lot .
Too . Nerd sitting at a table laughing , yeah , but our website is zanetti financialcom .
That's great . Okay , check it out and well , thanks . So much . Thanks for your service on the on the county commission as well . You do a great job and good luck in your reelection bit as well .
Thank you and both of you Thank you for what you do . You guys have a great platform here . Keep carrying the fire On behalf of me and my wife . We love listening you guys , so keep doing it .
I appreciate it All right , guys , we will see you back here on monday .
¶ The Iowa Caucus Prognostication
Yes , when we will be talking about , yes , the iowa caucuses we're gonna do a little bit of uh we're gonna do a little political um Prognostication , okay , so it should be fun . All right , we'll see you back here next week .
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