Posts Tagged ‘ Austrian economics ’

Real Estate 360 Live With Louis Cammarosano 7/23/12

On Monday July 23, 2012, Louis Cammarosano, General Manager of HomeGain, was a guest on the Real Estate 360 Live radio show on The Big Talker 1580 WHFS AM, hosted by Ryan Sloper.

Listen to the show.

Part 1 (14:42)

Ryan discusses the Spanish debt crisis. Ryan and Louis discuss the low interest rates of German and US bonds. Louis notes that the low rates highlight investors’ demand for “safety” even though yields are below the stated official inflation rate. Louis notes that because rates are artificially low, it is good for those who want to take out long term low interest mortgages.

Louis and Ryan note that the US interest rates are being kept low because the US government can not afford to pay its debt if interest rates were higher. Louis notes that the US treasuries becomes by default the safe haven because the US is the largest sovereign and also because gold, silver and real estate (arguably safer investments) are more thinly traded and less widely held.

Louis notes that even municipal bonds are being preferred by investors seeking safety even though municipalities have limited means of raising revenues and are bankruptcy risks.Louis notes that Spain’s 7%+ interest rates are an example of what a sovereign must pay if its investors are concerned about its inability to pay principal and interest back.

Louis notes that the US rates are not near 7% because the US can print the difference. Louis notes however by doing so becomes in effect a default as the investors received debased currency in return. Louis notes that low interest rate punish savers who would help their economy by savings and that low interest rates encourage consumption which does not help the economy because people consuming are doing so with borrowed money.

Louis notes that the low interest rate environment helps the banks, the government and the rich. Louis notes that perhaps deflation is preferable for those on fixed incomes. Louis notes when prices go higher the only way to afford higher prices is to take out a loan.
Continue reading this post

Share

Posted by: Louis Cammarosano on August 1st, 2012 under Louis Cammarosano on Real Estate Radio

No Comments »

Real Estate 360 Live With Louis Cammarosano 5/7/12

On Monday May 7, 2012, Louis Cammarosano, General Manager of HomeGain, was a guest on the Real Estate 360 Live radio show on The Big Talker 1580 WHFS AM, hosted by Ryan Sloper.

Listen to the show.

Part 1 (14:54)

Ryan discusses the issues in Europe relating to the Euro and austerity plans. Louis notes that austerity is always difficult and notes the Austrian economists make the analogy that liquidating debt is painful and is like withdrawal from heroin but it needs to be done.

Politicians and populations given the choice will avoid the pain of austerity and kick the can down the road. Louis notes that the US is in a similar situation with politicians not advocating spending cuts but rather just a slow down in the rate of growth of spending. Louis notes that Ron Paul is the exception and has proposed $1 trillion worth of cuts in the first year of his administration.

Louis notes that Ron Paul is only promising freedom and liberty and is not promising benefits or increased government support which get politicians votes. Louis notes that a majority of the population is a recipient of government spending. Louis notes that Ron Paul will be holding hearings to End The Fed this week.

Louis notes that the bulk of US spending doesn’t come from tax receipts but from the issuance of debt that the Fed buys. Ending the fed would not be popular with big government types because it would mean that money would not be available to fund government programs. Ryan notes when there is trouble in Europe there is a “flight to safety” in US securities which drives interest rates down.

Louis doesn’t think there will be any discussion in the US to cut spending, unless Ron Paul ends up in the limelight challenging Romney. Louis does not think QE3 will happen prior to the election. Louis and Ryan discuss how the unemployment rate is calculated.

Continue reading this post

Share

Posted by: HG Blog Admin on May 17th, 2012 under HomeGain, HomeGain on Real Estate Radio

1 Comment »

Real Estate 360 Live With Louis Cammarosano 4/23/12

On Monday April 23, 2012, Louis Cammarosano, General Manager of HomeGain, was a guest on the Real Estate 360 Live radio show on The Big Talker 1580 WHFS AM, hosted by Ryan Sloper.

Listen to the show.

Part 1 (14:40)

Ryan notes that the Fed is going to meet again next week and that many experts expect another round of quantitative easing. Louis thinks that the Fed won’t announce QE3 and that a lot of capital is flowing into the US as a result of the problems in Europe and that indeed many economists expect the US dollar to appreciate in value. Louis is not certain that is a well founded belief, but one that is prevalent.

Louis notes that an announcement of QE3 might cause a bit of a panic because it would be an admission that the recovery is not taking hold and oil prices would rise. Louis thinks that although the Fed may want to do QE3 they will probably hold off until after the election in November.  Louis notes that the average investor is either short on cash or can not save as interest rates are low so they put their money in the stock market which drives valuations higher.

Louis notes that if you really wanted a strong dollar you would want higher interest rates so people would save money and invest in treasuries, rather than the Fed printing money out of thin air to buy them and thereby devaluing the dollar. Ryan notes that the dollar is appreciating vs the Euro. Louis notes that the dollar is not however strengthening against gold silver and oil. Louis notes that the amount of gold being mined is not as great as the amount of money being printed.

Louis and Ryan note the rising rental market. Louis notes that college grads will also put pressure on the rental market as most won’t be in a position to buy homes as they have student loans to pay and poor job prospects and will more often than not be renting.  Louis notes that the American Dream of home ownership is in jeopardy for young people.

Continue reading this post

Share

Posted by: Louis Cammarosano on May 1st, 2012 under HomeGain Radio, HomeGain on Real Estate Radio, Louis Cammarosano on Real Estate Radio

No Comments »

Real Estate 360 Live With Louis Cammarosano 4/9/12

On Monday April 9, 2012, Louis Cammarosano, General Manager of HomeGain, was a guest on the Real Estate 360 Live radio show on The Big Talker 1580 WNEW AM, hosted by Ryan Sloper.

Listen to the show.

Part 1 (14:46)

Ryan and Louis discuss the jobs report. Ryan notes that the unemployment rate actually dipped even though more people are unemployed as the participation rate in the labor force has dropped. Louis notes that once a worker is classified as no longer in the labor force, they are no longer considered “unemployed”.

Louis notes the disconnect between companies doing well and consumers doing well. Louis notes that the stock market is up in part because companies with a lot of cash are purchasing their own stock. Louis also notes that companies are in a different position than consumers as many companies are not in debt and have huge cash balances while many consumers have little cash and large debt balances.

Louis notes that Apple’s over performance makes the overall market appear to be doing better than it is. Louis notes that perhaps Apple is overvalued. Ryan notes that many companies have their cash overseas. Louis notes that companies also hold US treasuries and that when they decide to free up their cash, they will have to sell their US Treasuries which will put downward pressure on those securities. Louis notes that 61% of US Treasuries last year were bought by the Federal Reserve.

Louis notes that the US government engages in deficit spending and relies upon the Federal Reserve to print money to purchase the US Treasuries to fund the spending. Louis notes that up to 20-30 years ago most of the US Treasuries were bought domestically by US companies and individuals.

More recently China and Japan bought large percentages of US Treasury issuances, however in the past two or three years they have cut their purchases of US Treasuries. Louis notes that the US government has increased spending each year which means it relies more heavily on debt issuances to fund its spending-debt issuances that are increasingly purchased by the Federal Reserve Bank. Louis notes that if the Federal Reserve was not buying the debt, interest rates would be much higher.

Ryan notes that the Federal Reserve can’t continue to be the purchaser of last resort forever. Louis notes that the Atlantic is calling Ben Bernanke a hero and that Paul Krugman is arguing that inflation is too low! Louis notes that Krugman thinks that because money is cheap that we should be spending more of it. Louis argues that is akin to telling someone the morning after who is hungover to have more beers because they are cheaper in the morning than they were last night. Louis notes that the less money you make the greater percentage food and energy are as part of your budget.

Continue reading this post

Share

Posted by: Louis Cammarosano on April 21st, 2012 under Louis Cammarosano on Real Estate Radio

No Comments »

Real Estate 360 Live with Louis Cammarosano 3/19/12

On Monday March 19, 2012, Louis Cammarosano, General Manager of HomeGain, was a guest on the Real Estate 360 Live radio show on The Big Talker 1580 WHFS AM, hosted by Ryan Sloper.

Listen to the show.

Part 1 (14:56)

Louis notes that interest rates are artificially manipulated as are the unemployment and inflation rates and that the economy is not good. Louis notes that there is still a lot of debt in the system and until that debt gets flushed out of the system there won’t be much of a recovery. Louis notes that the interest rates are low not for the benefit of the consumers who want to borrow but for the benefit of the banks and the Federal government who need interest rates to remain low.

Louis notes that low interest rates force savers and investor to put money into the stock market and other risk assets as bank deposits pay less than even the official stated rate of inflation. Louis notes that the gold silver and real estate markets are not as liquid. Louis says there is a bubble in the bond market but NOT in gold and silver as gold and silver are not overbought. Louis notes that the average person probably could not name a few gold or silver mining stocks.

Louis also notes that the average person also does’nt have much money to invest. Louis discusses unintended consequences. Louis predicts that central banks will continue to print money-i.e. kicking the can down the road, which eventually is a dead end. Louis notes you can’t solve a debt problem by issuing more debt. Louis notes that central planning and officious intermeddling in the market does not work.

Continue reading this post

Share

Posted by: Louis Cammarosano on March 24th, 2012 under Louis Cammarosano on Real Estate Radio

1 Comment »

Real Estate 360 Live With Louis Cammarosano 3/12/12

On Monday March 12, 2012, Louis Cammarosano, General Manager of HomeGain, was a guest on the Real Estate 360 Live radio show on The Big Talker 1580 WHFS AM, hosted by Ryan Sloper.

Listen to the show.

Part 1 (14:46)

Ryan discusses the upcoming Fed meeting and the potential for more quantitative easing to keep interest rates low. Ryan notes that James Grant refers to the Fed actions as market manipulation. Louis notes that when interest rates are low for items that require borrowing, prices rise (housing, college tuition). Louis agrees that Fed and government policies contribute to this.

Louis notes that when there are low interest rates and an increase in the money supply and credit, not only do prices of goods that require borrowing rise, but prices of commodities like oil and gold and silver also rise. Low interest rates also create a speculative environment.

Ryan and Louis notes that the rise in the cost of oil also impacts the cost of finished goods. Louis notes that if there is QE3, the price of oil would rise which would not be good for the President’s reelection chances. Ryan notes that interest rates will need to rise if the dollar continues to be devalued. Louis notes we have been side tracked by the Arab Spring and Occupy Wall Street and that has taken public’s attention away from the US debt crisis.

Ryan notes that only Ron Paul is talking about the unsustainability of the US debt. Louis notes that Ron Paul and his message has been marginalized by the main stream media. Louis notes that a target inflation rate is not a good idea as it is a pre-calculated method of taking the value of people’s money away. Louis also notes that low interest rates force savers into the riskier equities market as they can’t get a positive rate of return in CDs. Continue reading this post

Share

Posted by: Louis Cammarosano on March 19th, 2012 under HomeGain, HomeGain Radio, HomeGain on Real Estate Radio, Louis Cammarosano on Real Estate Radio

1 Comment »

For Real Estate Agents

Online Marekting Solutions

For Home Buyers and Sellers

e.g., 1250 S Main St, Burbank, CA or 91506
     Search Foreclosures    Search New Homes    Search Rentals    

Blog Categories

Blog Archives

Real Estate Blogs

Top Articles

Recent Comments

Guaranteed LeadsReferral Lead ProgramListings PackageVisits to your WebsiteFind REALTOR®Homes For SaleHome Values