Posts Tagged ‘ debt crisis ’

Real Estate Radio With Louis Cammarosano 11/7/11

On Monday November 7, 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 (13:55)

Ryan notes that there is a city near Detroit, Hyland Park that has turned off the city’s electricity and pulled out the street lights because they can not pay the electric bills. Louis notes that this is considered “austerity”. Louis notes that local governments should be able to provide the necessities(fire, police, water and lighting) if the money was managed properly.

Instead local governments rely on bond issues and getting money from Washington to pay for government services. Louis notes the irony of hiring local politicians to get money sent to Washington back to the local municipality. Louis also notes that governments generally don’t threatened to cut the non essentials and when they are short on cash, but rather threaten the essential services in order to extract more money. Ryan and Louis discuss the raising of bank fees on consumers and the backlash that it has created, leading to the Bank of America has retracted their intention to charge consumers to use their bank cards.

Louis notes that the entire episode was the unintended consequence  of government intervention. Ryan discusses the best way to shop for a mortgage. Ryan discusses factors that impact mortgage interest rates. Ryan notes that the treasury will sell $72 billion of bonds. Ryan notes the change of government in Greece and that the contagion has spread to Italy. Louis notes the the Greek crisis has been lingering because the central bank has been propping them up.

Louis also notes that if more municipalities can not provide services, the Fed may provide a bail out. This would lead to higher interest rates and inflation. Louis predicts that the dollar will out last the Euro in that it can probably print more money and that eventually, entities including sovereigns, must be allowed to fail. Louis notes that the Federal Deposit Insurance Corporation creates a moral hazard. Louis and Ryan discuss fractional reserve banking and its role in creating the potential for bank runs.

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Posted by: Louis Cammarosano on November 20th, 2011 under HomeGain on Real Estate Radio, Louis Cammarosano on Real Estate Radio

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Real Estate Radio With Louis Cammarosano 8/8/11

On Monday August 8, 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 (14:29)

Ryan and Louis discuss the S&P down grade of the U.S. credit. Ryan notes that in spite of the downgrade people are still buying treasuries. Louis notes that the US has done nothing to reduce its debt and notes the irony that raising the debt ceiling does not solve the debt crisis. Louis says that buying US treasuries is the safe haven of choice not gold and silver even though gold and silver have out performed treasuries. Louis mentioned that by not assuring the market that the debt would be paid uncertainty resulted. Louis criticizes the creation of the “super commission” tasked to come up with spending cuts. Ryan and Louis discuss the impact of the S&P downgrade on interest rates and notes that interest rates went even lower. Ryan speculates that interest rates may remain low for 3-5 years. Louis notes the irony that S&P has had a poor history of rating entities and notes that the US debt issues are now in focus around the world as a result of the reluctance of the congress to raise the debt ceiling. Louis notes that investors are uncomfortable with the situation in the United  States and therefore are buying US treasuries! Louis mentions Greenspan’s recent statement that the United States will never default as the United States can always print up the amount owed. Louis notes that when dollars are printed the recipient gets  debased dollars, which causes inflation. Louis notes that as long as the rest of the world continues to buy US treasures and the Fed continues to do so interest rate will remain low. Louis notes that locking in a long term loan at low rates will be a winner as rates certainly will rise in the coming years.

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Posted by: Louis Cammarosano on August 21st, 2011 under HomeGain, HomeGain on Real Estate Radio, Louis Cammarosano on Real Estate Radio

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