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.