Posts Tagged ‘ inflation ’

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.

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

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Real Estate 360 Live With Louis Cammarosano 2/6/12

On Monday February 6, 2012, Louis Cammarosano, General Manager of HomeGain, was a guest on the Real Estate 360 Live radio show on The Big lowTalker 1580 WHFS AM, hosted by Ryan Sloper.

Listen to the show.

Part 1 (15:37)

Louis and Ryan discuss the Superbowl and the ads that played. Ryan reviews the 10 bond interest rates, the level of the Dow and the situation in Greece. Louis notest that Greece should just default and send a message to the market, rates would go up and governments would have to spend less as they could not afford to borrow money at the higher rates.

Louis notes the irony of a Greek default-it won’t draw attention to the US being in a similar situation, but rather will draw investors to the US as a safe haven. Louis notes that the debt crisis will end up on the US doorstep last and notes that the US won’t default but rather will print up the difference.

Louis notes that printing the difference is inflationary and is in effect a default as the investors will receive less value than they were anticipating. Louis notes that investors have become used to receiving  100% of their funds back from soverigns as they expect a trouble sovereign to be bailed out .

Louis notes that a potential bailout is priced into the risk, thereby reducing the risk and interest rates.  Louis notes that accounting rule encourage banks NOT to do short sales.

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Posted by: Louis Cammarosano on February 13th, 2012 under HomeGain Radio, HomeGain on Real Estate Radio, Louis Cammarosano on Real Estate Radio

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Real Estate 360 With Louis Cammarosano 1/9/12

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

Listen to the show.

Part 1 (14:56)

Ryan and Louis offer their predictions for 2012 on the general economy, real estate market, interest rates, the presidential election, the price of gold oil and silver and foreclosures. Louis notes that the beginning of the year will be a continuation of low interest rates, working off inventory and a tepid market but predicts a financial shock at some point in 2012 perhaps based on a European debt crisis or something in the US.

Louis notes that there is no way to solve the housing crisis or the general sovereign debt crisis other than to allow the debt to be liquidated, but notes that the central banks are not willing to allow it.

Ryan notes of a new tax on mortgages that helps Fannie  Mae and Freddie Mac which Louis characterizes as a back door bailout of these entities.

Louis notes that many home buyers are holding off on purchasing a home because they think interest rates might go lower or that they will stay low for a long time or that home prices will fall further. Louis notes that more likely rents will rise and that it makes sense to get a long term low interest rate to protect against the rise in the real cost of shelter.

Louis notes that if interest rate rose it would be a disaster for the US government  as it would make it even more difficult for the US to pay off the interest. Louis notes that the Fed’s operation twist is intended to keep long term interest rates down. Louis notes that institutional investors purchase US government bonds for their perceived safety. Louis notes that the US is actually printing LESS physical currency as the cost of paper and its components (cotton and ink) are getting more expensive.

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Posted by: Louis Cammarosano on January 28th, 2012 under Louis Cammarosano on Real Estate Radio

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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 8/15/11

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

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Posted by: Louis Cammarosano on August 24th, 2011 under HomeGain, HomeGain on Real Estate Radio, Louis Cammarosano on Real Estate Radio

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