On Monday October 15, 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 (14:37)
Ryan and Louis discuss the recent unemployment rate that dropped unexpectedly. Ryan and Louis discuss whether the unemployment number will impact the Presidential election results.Ryan and Louis discuss the impending “fiscal cliff”. Louis notes that some CEOs are writing to the employees urging them not to vote for Obama.
On Monday July 23, 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 (14:42)
Ryan discusses the Spanish debt crisis. Ryan and Louis discuss the low interest rates of German and US bonds. Louis notes that the low rates highlight investors’ demand for “safety” even though yields are below the stated official inflation rate. Louis notes that because rates are artificially low, it is good for those who want to take out long term low interest mortgages.
Louis and Ryan note that the US interest rates are being kept low because the US government can not afford to pay its debt if interest rates were higher. Louis notes that the US treasuries becomes by default the safe haven because the US is the largest sovereign and also because gold, silver and real estate (arguably safer investments) are more thinly traded and less widely held.
Louis notes that even municipal bonds are being preferred by investors seeking safety even though municipalities have limited means of raising revenues and are bankruptcy risks.Louis notes that Spain’s 7%+ interest rates are an example of what a sovereign must pay if its investors are concerned about its inability to pay principal and interest back.
Louis notes that the US rates are not near 7% because the US can print the difference. Louis notes however by doing so becomes in effect a default as the investors received debased currency in return. Louis notes that low interest rate punish savers who would help their economy by savings and that low interest rates encourage consumption which does not help the economy because people consuming are doing so with borrowed money.
Louis notes that the low interest rate environment helps the banks, the government and the rich. Louis notes that perhaps deflation is preferable for those on fixed incomes. Louis notes when prices go higher the only way to afford higher prices is to take out a loan. Continue reading this post
On Monday April 23, 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 (14:40)
Ryan notes that the Fed is going to meet again next week and that many experts expect another round of quantitative easing. Louis thinks that the Fed won’t announce QE3 and that a lot of capital is flowing into the US as a result of the problems in Europe and that indeed many economists expect the US dollar to appreciate in value. Louis is not certain that is a well founded belief, but one that is prevalent.
Louis notes that an announcement of QE3 might cause a bit of a panic because it would be an admission that the recovery is not taking hold and oil prices would rise. Louis thinks that although the Fed may want to do QE3 they will probably hold off until after the election in November. Louis notes that the average investor is either short on cash or can not save as interest rates are low so they put their money in the stock market which drives valuations higher.
Louis notes that if you really wanted a strong dollar you would want higher interest rates so people would save money and invest in treasuries, rather than the Fed printing money out of thin air to buy them and thereby devaluing the dollar. Ryan notes that the dollar is appreciating vs the Euro. Louis notes that the dollar is not however strengthening against gold silver and oil. Louis notes that the amount of gold being mined is not as great as the amount of money being printed.
Louis and Ryan note the rising rental market. Louis notes that college grads will also put pressure on the rental market as most won’t be in a position to buy homes as they have student loans to pay and poor job prospects and will more often than not be renting. Louis notes that the American Dream of home ownership is in jeopardy for young people.
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 26, 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 (15:18)
Ryan and Louis discuss the controversy regarding the allegations of a Congressional Budget Office employee who claims that the CBO prohibited statements in their reports indicating that foreclosures had an impact on the housing market and that the decline in housing prices had an impact on household wealth.
Louis notes that economic data is often politicized as data can be included and excluded according to political aims. Louis notes that manipulation can also occur in the unemployment and inflation data. Louis notes that the Federal Reserve official manipulates the market and therefore its not surprising that economic data is also subject to manipulation.
Louis notes that statistics and science are also manipulated in other areas ie. cigarettes and cancer and global warming findings. Ryan and Louis discuss shadow inventory and foreclosures impact on the market.
Louis notes that bad assets should have been sold off by the banks rather than having been bailed out. Louis notes that the current low interest environment forces savers to put their money into stocks. Louis notes a recovery can be built on savings, but that with low interest rates borrowing, rather than savings is encouraged.
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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