On Monday July 25, 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 (24:25)
Ryan discusses the heat wave that is gripping the nation. Louis and Ryan discuss the debt ceiling and the lack of a deal to date. Ryan notes that there is tremendous uncertainty. Louis notes that a signal should have been sent to the market that the US would not default on its debt and would cut spending elsewhere to ensure that money would be available to pay debt holders. Louis notes that the President’s position is largely based on not wanting to be negotiating a debt reduction deal when he is running for reelection. Louis notes that the US has a triple A credit rating despite having a $14 trillion deficit and having difficulties coming up with an agreement on how to service it. Louis mentions Ron Paul’s idea that the US should not pay the interest on the bonds that the Federal Reserve bought with money they created out of thin air. Ryan and Louis discuss their surprise that mortgage interest rates are still low. Louis notes that a grand plan to reduce the deficit is not feasible in a week and that Congress needs to change how they do business, rather than relying on raising the debt ceiling. Ryan notes the suggestion of eliminating the mortgage interest deduction as a means to reduce the deficit. Louis notes that the government uses arbitrary numbers and applies them nation wide and does not account for regional differences in the costs of living. Ryan notes an idea floating around that the government might take over foreclosed homes and rent them out. Louis notes the political posturing that takes place by noting that the public is told that essential services like police and fire departments or social security may be cut if the budget is not passed. They never threaten to shut down things like the Department of Energy or the Department of Education, rather they threaten what you need. Louis notes that the entire debt ceiling debate is framed in terms of raising the debt ceiling as necessary to pay the bonds rather than noting that debts can be prioritized. Ryan and Louis discuss the nature of government and its involvement in the economy. Ryan predicts a double dip recession and that interest rate will rise. Louis notes that the Fed is merely trying to reheat the economic souffle with QE1 and QE2. Louis and Ryan note that a 4% mortgage rate is a good deal given that the inflation rate is higher than that.