On Monday August 15, 2011, Louis Cammarosano, General Manager of HomeGain, was a guest on the Real Estate Radio show on The Big Talker 1580 AM, hosted by Ryan Sloper.

Listen to the show.

Part 1 (14:27)

Ryan notes the stock market volatility of the prior week. Ryan notes that mortgage interest rates are at record lows. Ryan talks about the cost of home ownership as being the primary determinate in home affordability and matching mortgage payments against rental payments. Ryan and Louis discuss the sales of US Treasuries in the prior week and note that demand for US Treasuries needs to remain high to keep interest rates low. Louis notes that demand for Treasuries  needs to be created by the Fed and to be coordinated by the Fed with foreign sovereigns who finance their US debt purchases by taking out debt of their own. Louis notes that interest rates are being kept low artificially. Ryan notes that China is continuing to purchase US Treasuries while Russia is scaling back. Louis notes that China is sort of forced to buy US Treasuries so that the US can pay their interest payments. Louis notes that China and Russia are also purchasing hard assets, including silver and gold. Louis notes that Alan Greenspan recently commented that the US will never default on its obligations because it can always print money. Louis notes that Greenspan’s comments do not reflect encroaching senility but rather his position of no longer being the Fed chairman and notes that Bernanke holds the same view. Louis notes that the US will pay its debt even if they have to print the difference and notes that such a manner of payment is default by inflation rather than default by non payment as the currency so printed up is worth less. Louis notes that getting a low interest rate mortgage now is a benefit in that the dollars used in the future to pay off the mortgage will be worth less. Ryan notes that when markets are volatile, they rush to purchase US Treasuries. Louis notes that the reason there is volatility is because people are concerned about the US economy and the dollar and that ironically their investment decision is to purchase US Treasuries. Ryan notes that he would buy gold or silver as a safe haven rather than US Treasuries. Louis notes that the rate on US Treasuries is lower that the rate of inflation. Louis notes that while we can’t predict the direction of interest rates, we know that rates can only fall from 4% towards zero but they can rise many points higher. Ryan notes that the Fed thinks there is no inflation. Louis notes that there is inflation in the money supply and that it has already found its way into higher prices of commodities but not necessarily in the price of all finished goods. Louis notes that this stance gives the Fed cover to do QE3 and QE4. Louis notes that we are already seeing QE3 as the Fed is reinvesting the interest in the bonds they purchased during QE1 and QE2 back into US Treasuries

Part 2 (12:56)

Ryan and Louis discuss the prior week’s economic events. Ryan notes that the market got crushed in reaction to the S&P downgrade of the US. Louis notes that the European Central bank agreed to purchase Italian and Spanish debt. Louis notes that low interest rates encourages people to toss money into the stock market or to take out a loan to purchase a home. Louis notes that QE1 and QE2 fueled the stock market advances of 2009 and 2010. Louis notes that when people make money in the stock they will  feel rich and buy a home. Louis notes that this approach may not seem misguided but it is destined to fail. Louis notes that it creates another bubble, this time in the US Dollar and US Treasuries. Ryan notes that Donald Trump said he is now buying stocks because he has not been  able to find good commercial real estate to invest in. Louis notes that good deals probably exist but the properties may not yield enough tenants to fill the buildings up.  Ryan notes that home ownership has reached its lowest rate since 1965. Ryan also notes that the statistic does not take into account mortgage delinquencies. Louis notes that an equilibrium in the housing market wont be reached until the speculative excess is wrung from the market. Louis notes that the government is thinking of  getting involved in renting out foreclosed homes. Louis notes that such a scheme would be horrific for home prices and rental prices as the government would most likely rent the homes out at lower rates and that as a result home prices in the area where such foreclosed homes are being rent out would decline in value.Louis describes the scheme as ill fated  based on an ill conceived idea. Louis criticizes Keynesian economics and Paul Krugman’s recent pronouncement that war is good for the economy. Louis argues that the government should allow the housing market to collapse so that it can be rebuilt. Louis notes the difficulty the rating agencies have in analyzing bank financial statements.

Part 3 (12:56)

Ryan discusses refinancing. Louis notes that low interest rates push investors into the stock market. Louis and Ryan discuss the need for long term planning when contemplating a house. Ryan and Louis discuss the size of a down payment. Ryan suggests putting less down on a house and the remainder in gold and silver. Ryan notes that all fiat currencies eventually become extinct. Louis notes that the average lifespan of a fiat currency is 40 years and it has been 40 years since Nixon took the US off the gold standard.

Part 4 (11:57)

Louis notes that taking real estate advice from the national media and friends is a mistake and that the best real estate advice comes from a REALTOR who know and understands the local market.  Louis discusses the advantages of doing research on HomeGain.com and finding a realtor there. Ryan discusses the options that mortgage holders have if they wish to rent out their properties.

Listen to other Real Estate Radio shows with Louis Cammarosano

Listen to the Real Estate Radio show of August 8, 2011

Listen to the Real Estate Radio show of July 25, 2011

Listen to the Real Estate Radio show of July 11, 2011

Listen to the Real Estate Radio show of June 27, 2011

Listen to the Real Estate Radio show of June 20, 2011

Listen to the Real Estate Radio show of June 13, 2011

Listen to the Real Estate Radio show of June 6, 2011

Listen to the Real Estate Radio show of May 23, 2011

Listen to the Real Estate Radio show of May 16, 2011

Listen to the Real Estate Radio show of May 9, 2011

Listen to the Real Estate Radio show of May 2, 2011

Listen to the Real Estate Radio show of April 25, 2011

Listen to the Real Estate Radio show of April 18, 2011

Listen to the Real Estate Radio show of April 11, 2011

Listen to the Real Estate Radio show of March 21, 2011

Listen to the Real Estate Radio show of March 14, 2011

Listen to the Real Estate Radio show of February 28, 2011

Listen to the Real Estate Radio show of January 24, 2011

Listen to the Real Estate Radio show of November 29, 2010

Listen to the complete archive of Louis Cammarosano on Real Estate Radio shows

Real estate radio interviews also available on Youtube

About the Real Estate Radio Network

The Real Estate Radio Network^® is a nationwide alliance of real estate related professionals with a common objective: delivering the timely truth about local Real Estate Markets over local radio stations.

The Real Estate Radio Network brings hard-working and ethical professionals in a community together. We provide the media and forum necessary for Consumers to learn the truth about important aspects of their financial life, which is mostly centered around their biggest investment, the home they live in. The Real Estate Radio Network® brings each radio program to the audience with a “live and local” show hosted by well-respected members in the local Real Estate and Financial community.

About Ryan Sloper

As a highly motivated mortgage consultant, with more than nine years of mortgage lending experience, Ryan Sloper has acquired a solid understanding of the local and national real estate markets. Ryan has been investing in residential and commercial real estate for the last 5 years, where he has first hand knowledge of what it takes to be a successful real estate investor. Ryan also hosts a weekly radio show, Real Estate Radio, which airs every Monday on 1580 AM in the Washington, DC Metro Area. Real Estate Radio also streams live nationally @ http://whfs.cbslocal.com/shows/real-estate-radio-with-ryan-sloper/

Louis Cammarosano