On Monday September 10, 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 (14:26)
Louis and Ryan discuss what the Fed might do this week. Louis notes the unemployment rate and the labor participation rate. Louis predicts that the Fed will not act in September, but notes that QE is inevitable because it supports the spending and debt levels of the government.
On Monday June 4, 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 (14:31)
Louis notes that the “flight to safety” still involves buying US Treasuries even though the US owes over $14 trillion and notes that the Fed will continue to do quantitative easing and keep interest rates low. Louis notes that even though this methodology can be viewed as “kicking the can down the road” and that road is a dead end, the markets seem to buy it.
Ryan notes that ten year treasury is at an all time low. Louis notes that rates in Germany are negative. Louis notes that Europe is considering an even stronger central bank bailout of Europe. Louis notes that in a debt driven economy, more and more debt needs to be layered on to keep the economy going. Louis notes ironically that investors take comfort that the Federal Reserve will continue to buy US debt based on money created out of thin air. Louis notes that once hyperinflation inflation hit, the printing press needs to go into overdrive and the game is over.
Louis notes that the Federal reserve has been able to maintain confidence in their ability to sustain confidence and to pay down the debt with more debt. Louis notes that once confidence is lost it is lost quickly. Louis notes that a 30 year low interest mortgage is a good bargain. Louis notes that rates are artificially low and therefore the low rates are a bargain. Louis notes that all currencies are tied to the US dollar so the US dollar acts as an anchor even though the US dollar is not backed by anything. Louis notes that the US went of the gold standard in 1971. Louis notes that people take comfort in the dollar just because. Continue reading this post
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.
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.
On Monday February 27, 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 (14:27)
Louis and Ryan discuss the $5 billion suit against the banks for wrongfully foreclosing on homeowners. Louis notes a moral hazzard is created when companies and individuals are bailed out. Louis notes that when you keep interest rates artificially low borrowers have no incentive to pay off debt earlier and no incentive to save. Low interest rates urge consumption and borrowing. Louis notes that rising gas prices have little to do with speculators or problems in the Middle East but rather the decline in the value of the dollar.
Louis notes that in 1964 a gallon of gas cost $.30. In 1964 a US quarter was 90% silver. Today a 1964 quarter is worth $6.43 (MORE than the price of a gallon of gas-at today’s price of about $4.25 a gallon) a 1964 US dime is worth $2.50, so the price of gas has gone up less vs the dollar than silver. Ryan notes that Warren Buffet is a stock expert but not necessarily an expert in real estate.
Louis notes that its probable that the local Realtor knows far more about real estate than Warren Buffet. Louis notes that many people believe that Warren Buffet’s views on taxes are somehow more valid because he has made a lot of money in stocks. Louis notes that sadly, the people equate wealth with intelligence.
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