Posts Tagged ‘ FDIC ’

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 10/31/11

On Monday October 31, 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 (13:47)

Ryan notes that in spite of the institution of Operation Twist,  interest rates have increased. Louis notes that the Fed can’t totally control interest rates. Louis notes that rates want to and need to go higher. Louis notes that the dollar should be a weaker currency, but the Swiss and Japanese central banks purchased dollars to weaken their own currenciesLouis notes that there is a false concept if there is inflation, employment will increase. Louis notes that in this weak environment, all that happens is that unemployed people pay more for goods and services. Louis notes that the government uses hedonics to supress the actual impact of inflation. Louis notes that long term financing is a gift at low rates. Ryan notes the difference between the federal fund rate and the mortgage backed securities market. Louis notes that the Fed’s pronouncement that they intend to keep interest rates low is sending a false signal to the market as people think that mortgage interest rates WILL remain low until early 2013. The Fed may purchase mortgage back securities.   Ryan notes that Obama focused on health care in the first years of his administration and now is only focusing on the housing market. Louis notes that characterization is not entirely fair as the stimulus was passed prior to health care under the idea that the stimulus would solve the housing woes and unemployment. Louis notes that the government programs can not solve economic problems. Louis notes that all the government programs are merely a misguided attempt to re heat a souffle. Louis notes that politicians can not run on the platform that they are not going to do anything about the economy other than let the market sort itself out, even though that may be the best solution.

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Posted by: Louis Cammarosano on November 6th, 2011 under HomeGain on Real Estate Radio, Louis Cammarosano on Real Estate Radio

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