Stagflation and Bank Stocks, Meta and YouTube Court Ruling, Higher Gas Prices and Auto Sales, Crypto and the U.S. Banking System & More

Is the concern of stagflation putting downward pressure on bank stocks?

The term stagflation was first used in 1965 by a British politician. A quick definition for an economy with stagflation is when there is slow economic growth, high unemployment, and high inflation. A scenario like that would put a strain on banks because as people lose their jobs one of the first things they stop paying on are consumer loans like credit cards and personal loans. Banks can also get squeezed because they may have locked in long-term loans at lower rates and because of high inflation, the Federal Reserve could increase short-term interest rates, which would compress margins. The banks also need meet certain liquidity requirements, which could hurt margins even more. On the bright side, this could be a buying opportunity to invest in banks since they are down roughly 9 to 10% since the beginning of the year.

The reason I think this could be a good opportunity is manyfold. First off, the high oil prices that are currently causing inflation concerns appear to be a short-term problem and I believe they should start reversing by May or June. Second, employers have slowed down on hiring new people but are reluctant to let employees go because it’s very costly to hire new employees. Third, the economy appears to still be doing well and consumers have already started receiving part of the $50-$60 billion in tax refunds from the Big Beautiful Bill, which should help with consumer spending. This is also the year where agreements from other countries to invest trillions of dollars into our economy should start taking place. In regard to the banks themselves, they’re sitting in a pretty good situation with diversified businesses as your mega banks like JPMorgan and Bank of America have trading houses and global markets that are growing in the low double digits. Some banks expect mid-teens growth in the trading business. Some of the bankers have also said that demand for traditional commercial loans has been improving so far this year. In its most recent data, the Federal Reserve showed commercial industrial loans were up 5% year over a year, which is the largest increase since 2023. As always with investing, you should be looking out at least 2 to 3 years. One other perk is many banks pay a decent dividend around 2% to 2.5% 

Meta and YouTube get screwed in court

I was very disappointed to see that a 20-year-old woman, who won in a California court, is set to receive a total of $6 million from Meta and YouTube. Her claim was she was addicted to social media, and it dominated her life for years, which caused mental health issues like anxiety and depression. I’m really getting tired of the legal system in California and the theatrics played by attorneys such as her attorney having a jar of 415 M&M’s saying each M&M represented $1 billion of the near $400 billion in total stockholder equity when looking at Alphabets value. He began to remove one M&M at a time and demonstrated how taking out a few M&Ms did not change the weight of the jar. My feeling is this attorney should go to Hollywood and try to get an acting job. It is disappointing to see how no one wants to take accountability for their actions any longer. They want to blame somebody else and not take responsibility for the fact that she uploaded more than 200 YouTube videos before the age of 10 and had 15 Instagram accounts before she was 15. I do have to ask where were the parents? This could just be the beginning as there are 3000 other similar lawsuits against social media companies that are pending in California courts.

I do believe there should be some changes made to the regulatory framework around social media, but this goes too far and is just in my opinion greed from attorneys and people trying to get a free ride. I was glad to see that both companies are appealing the decision, and this will likely continue to move up the court system and may land in the Supreme Court. Meta also lost a case in New Mexico this past week as jurors found that Meta willfully violated the state’s unfair practices. The state’s Attorney General claimed the company failed to properly safeguard its apps from online predators targeting children. It is disappointing to see the number of lawsuits that are going on in our country. Our country was not built on attorneys and lawsuits; it was built on people working hard and taking responsibility for their own actions. I do fear for my grandkids if we continue on this path and wonder what our country will look like in 30 or 40 years. When it comes to investing, I would be very careful in this space, as these cases could set a dangerous precedent for trials to come. There is also a federal trial set to begin this summer in the Northern District of California involving claims by school districts and parents nationwide that apps from Meta, YouTube, TikTok and Snap helped foster detrimental mental health-related harms to young users.

Will higher gas prices hurt strong US car sales?

Current US car sales are around 16 million on an annual basis, which is down from 2019 when they were 17 million, but overall, they are still very healthy. The car business has changed from low margin vehicles to more luxury vehicles with higher profit margins and the average price on a new car is now over $50,000. The car buyers themselves have changed with the average new vehicle buyer around 50 years old. This is seven years older than in the year 2000. It’s no surprise, but because of the higher prices for cars, people earning over $150,000 a year account for 42% of the sales. Six years ago, it was just 29%. It was also reported that buyers who have incomes of $75,000 or less are no longer buying new cars because of the affordability. The higher gas prices do not seem to be affecting car sales at this point and according to the manufacturers, they are still saying the buyers remain resilient. However, if gas and oil prices remain at current levels that would then likely put a strain on car sales. Fortunately, at this time, based on many factors, I think by May or June we will start to see the easing of prices at the pump. Also helping US manufacturers is the deductible interest on cars made in the US. There are restrictions on this, but that does also help ease the pain with a little tax deduction. Also, since the President ended the tax credits for electric vehicles, US car manufacturers were able to scrap the losing endeavor of trying to build profitable EVs. With the stock prices for car manufacturers down around 9 to 10%, I believe the investment clouds should be clearing in the next couple of months and investors may have an opportunity to invest in a good US car manufacturer. It’s important to remember that if you step in and buy here, you own a small piece of a large company and don’t worry about the day to day volatility, you should be focusing on where that business will be at least 2-3 years down the road.

Should crypto companies be allowed into the United States banking system?

Unfortunately, Jonathan Gould, who is Comptroller of the Currency and is one of the country’s most powerful bank regulators, believes so. He thinks it’s a good idea to let firms like Ripple, Crypto.com and others in this area to become a trust bank. A trust bank is a little bit different than a normal bank because they don’t take deposits or make loans and instead offer other services like safekeeping of various assets. An example of trust banks would be insurance companies and payroll processors. My concern is what the average consumer may think as they could believe that because it’s a trust bank it is automatically insured by the federal government. This is a gray area as some trust banks can have insurance from the federal government, but they do not insure investments like stocks bonds, and cryptocurrencies. The Bank Policy Institute and other banks are against this because it is unclear what these crypto companies would do with bank charters. There is talk that some applicants may want access to the Federal Reserve payment rails, which would allow them to move money between digital currencies and the banking system. My concern is this could jeopardize the strength of our banking system and cause our federal government to be on the hook for some big financial liability in the years to come as some cryptocurrency drops dramatically or fails.

Is this a buying opportunity for gold or is it time to sell?

No one knows for sure, but there are reasons you should understand to help you decide which side of the trade you should be on. On January 28^th, gold peaked at $5657 an ounce and as of March 23 it was down 23% to $4340 per ounce. Generally, inflation fears and war are positives for gold but not this time. It is expected that the inflation fears will be short-lived as once oil goes back down in price after the conflict in Iran improves those fears should subside. Also working against gold is the war has increased the value of the US dollar, which is a negative for the price of gold. In addition to these two scenarios gold had a very speculative ride upward, and there were apparently many who borrowed funds to get bigger positions in the precious metal. Now that gold is beginning to fall many speculators are trying to unwind their gold positions quickly. Many were playing dangerously with gold as it climbed higher, even citizens in India and China and they perhaps were more so involved than those in the west. But with soaring oil prices hitting their economies, some of those citizens are liquidating their position to have cash. There’s also talk that central banks that were a major force in the move higher for gold are now asking questions about its price and are beginning to sell off some of their position as well. Depending on how much they liquidate, it is possible gold could fall a lot further before it hits the bottom. If you have speculated on gold or silver, you may want to think very hard about what will cause it to turn around and go back up. And remember you’re not investing, you’re speculating on a very volatile commodity.

Arizona Attorney General charges prediction market company for illegal wagers

I knew it would take some time for the regulatory system to come into play here, but finally the Arizona Attorney General, Kris Mayes, has charged prediction market company Kalshi with 20 counts of illegal betting and wagering. The Attorney General said that they accepted bets from residents on sports, elections, and other events that violated state law. Arizona does not allow unlicensed wagering businesses and bans election betting. Iowa, Utah, Ohio, and Nevada are also involved when it comes to trying to prevent unlicensed betting in their states. I did not know that both Kalshi and Polymarket, which is another prediction market company, allowed bets on whether the US would strike Iran and if Iran’s supreme leader would be removed. Indirectly betting on death just sounds morally wrong to me. Kalshi has pushed back and said the state court charges are seriously flawed. They believe they’re under federal jurisdiction rather than state law, but recently a federal court rejected Kalshi’s attempts to prevent bans on its business in Ohio in Nevada. My guess is this will probably end up in the Supreme Court to determine if these companies are gambling or issuing financial derivatives. States individually control the gambling laws while the federal government controls security laws. We have written on this subject a few times over the last few months, and I personally hope that these markets are regulated by the same rules as other gambling companies because these sites are not for investing and at the end of the day it is gambling. Unfortunately, this will probably be in courts for a long time.

China’s economy is falling behind the United States economy

This is good news because it was a concern back in 2021 that the Chinese economy would grow larger than the United States in the near future. If one simply looks at their exports and the $1.2 trillion trade surplus they generated, one would guess their economy is growing rapidly. Their economy is doing very well when it comes to selling electric vehicles, solar panels, ship building, and robots, but that hasn’t been enough to surpass the US. In 2021 China’s Gross Domestic Product (GDP) accounted for 19% of the global economy, but looking at the year ending 2025, China’s GDP was only 17% of the global economy. It is now less than 2/3 the size of the US economy compared to 3/4 back in 2021. For 2026, China’s government is projecting lower growth, which is the first time going back to the early 1990s. There are a couple reasons for this, one is their domestic deflation is reducing the value of their goods within their economy. The second reason is their currency known as the yuan has weakened since 2021, which makes their exports cheaper for other countries to buy. Businesses would rather sell to Europe or the United States because they receive the higher value dollar or euro, which gives the manufacturer a better profit than selling their products domestically. This is a similar story to what happened in the 90s when it was expected that Japan would outgrow the United States economy. In 1995 Japan’s economy was roughly 75% of the US economy, but because of weakened deflation in the country, the Japanese economy in dollar terms is only 15% of the US economy today. Today, Japan remains very influential economically but does not carry the same weight in the world when their economy was so strong in the 80s and 90s. I am in hopes that the Chinese economy will follow the same path that the Japanese economy followed roughly 40 years ago. 

The semi-truck from Tesla is supposed to arrive this summer!

I say supposed to because Tesla always seems to announce their innovations early and it seems to take at least a year or two for them to actually hit the market. Maybe this time the semi-truck will hit the market this summer considering it was supposed to be out a couple years ago. With that said it does appear to have some big benefits that truckers seem to like and one of them is a unique, center-mounted driver’s seat designed for superior panoramic visibility and reduced sun exposure, it also eliminates the right-side blind spot. There are also two large touch screen displays around the driver so that he or she can see all around the tractor-trailer. I do wonder if you have a copilot are they sitting behind you? It does not appear that the trucks are set up for long distance with two drivers though since according to Tesla, the truck can only travel 500 miles on a single charge for their higher range vehicle, and the lower range semi only goes roughly 325 miles. Truckers also said it was less stressful because there is no clutch or stick shift and they are very quiet since it’s an electric vehicle and there is just one gear and no shifting at all. Tesla says that the semis can charge four times faster than other battery-operated electric trucks and a 60% charge can be completed in 30 minutes. My guess is it would take an hour or so to do a full charge. That could be a problem because time is money for truckers. The cost of a new Tesla semi-truck is estimated to be just under $300,000 for the long range and about $260,000 for the standard vehicle with a range of 325 miles. That is substantially higher than a diesel semitruck that starts around $130,000 and can climb up to $210,000. The Tesla trucks will require less maintenance because of less moving parts so long-term that could be a benefit. The state of California has so much extra money that it has set aside nearly 1,000 vouchers, worth at least $165 million, to provide commercial fleets with steep markdowns on the Tesla Semi. Just in case you didn’t know I’m joking when it comes to California as the state is so far in debt and they don’t have the money to be doing these grants.

It appears more people are watching women’s basketball than I expected

I know because of Caitlin Clark women’s basketball saw a big step up in viewership and she helped make the sport more popular. As popular as she was in 2024, in her rookie season she only made $76,535, which pales in comparison to what the male NBA players make. Stephen Curry for example made $59.6 million. It all does come down to how many eyeballs are watching the basketball game and what the advertisers will pay to advertise during the women’s games is what will ultimately drive salaries. It is simple math, if there is less people watching the games, than advertisers will spend less. The Women’s National Basketball Association, known as a WNBA, signed a $200 million a year broadcast package with Disney, Amazon Prime and NBC Universal. If that doesn’t sound like much, you’re correct as that is well below the NBA’s deal which was $7 billion per year. I’ve never personally watched a women’s basketball game and not many people that I know talk about it the way they do about the men’s basketball games. Things do seem to be improving for the women though as they received a 364% increase to their salary cap, which was the biggest jump ever for a US professional sports league.

The women on average will earn about $584,000 this season and the lowest paid player will still walk home with a guaranteed $270,000. The salary cap for the WNBA is starting at $7 million per team, which is still a fraction of the NBA’s current cap of $155 million. I was surprised to learn that the WNBA games in 2025 averaged 1.3 million viewers on ESPN, and I think a lot of that stems from the star of the league, Caitlin Clark. Will this growth in viewership and salaries continue for the WNBA? My guess is probably not because sports are so crowded between baseball, football, basketball, hockey, and soccer. Ultimately, it is such a competitive field and there is only so much time in the day to watch sports. What is your opinion? Will you be watching women’s basketball this year?

Are you afraid to negotiate when buying a car?

For some people, it is the most dreaded experience because they don’t understand what is going on and the pressure of the salesperson makes it very uncomfortable. One of the most important rules is to be prepared heading into the experience. This includes knowing what car you want and do some research to find out what the MSRP is for that car. If you’re trying to negotiate, you must be realistic and if you’re trying to get some new hot selling model you’re wasting time. There is no dealing because if you don’t buy it, they know there’s 10 people behind you that will. If you know what you want, you can call around to different dealerships and get a price over the phone. Experts who do deals for people recommend talking to at least six or seven different dealerships and getting the prices. You can also go online and look at what they have in their inventory as you’re talking on the phone.

If you get a good deal, get what is known as a deal sheet, which shows the vehicle price and itemized fees, which now you can use to show other dealers that you’ve got a great deal and can ask them if they can beat it. It has been said that the best salespeople at the dealerships are the finance managers. Here they will try to add all different types of warranties and add-ons and make it sound like you can’t live without them. The best thing to do is just keep saying no and eventually they will give up. Unfortunately, you must be prepared to say no many times. Also be sure to stick to the cash price of the car and don’t try to let them sway you into the monthly payment trap.

They are going to try to get you to run a credit report sometimes before you even do a test drive and sometimes as soon as you walk in. Don’t let them run a credit report until you have the deal you want in writing. You may want to get a preapproval from your bank on what you can afford. You don’t have to use the bank, but you’ll have something to show the salesperson, so they know you’re not wasting their time. Once you get the deal you want be sure to verify there’s nothing extra on the paperwork that you did not agree to and now you can happily leave the dealership, perhaps saving as much as $2000 to $3000 depending on the car you’re buying. When you drive away in your new car you feel so good that you got a great deal and it was not as difficult as you thought.