Title Insurance

The European Union is debating how much they are willing to pay when it comes to bailing out five nations (Spain, Greece, Italy, Ireland, and Portugal).  Greece has a population of roughly 10 million people with a price tag of 140 billion, add another 121 million in population from four other nations and do the Math.  That is 1.6 trillion Euros to start.  What makes it challenging is when you have a membership, where everyone benefits and are required to follow a set of rules, yet still have their own monetary and fiscal policy, you have a recipe for problems.  The IMF, which American taxpayers fund 21% of the bill, will be adding to the bailout for Greece, and other nations that may soon follow.  What this means is for now the bond market in the states has strengthened greatly, as the U.S.  is by the far the best game in town.  The dollar has been beating the Euro, and when you add inflation there, our purchasing power is still much higher by comparison.  What is ironic, and I say this not to take sides, is the unique similarity between Greece and Chicago.   They have unfunded pensions and salaries they cannot sustain.  They have a cash economy from small businesses they cannot tax.  They have an aging population taking out faster than the replacements are putting in.  They have sold off their money  making entities to Germany like their tolls, their parking meters, and even the revenue rights to their disastrous Olympic festival, which they split the bill but took all the loss in 2004.   Chicago was all in to get the same festival that pushed Greece’s  debt spiral over the edge.  We need to look at these issues other nations are facing and learn from their mistakes, rather than wait to make our own and reflect. 

                Europe is required to import the vast majority of the resources they need to survive and strive.  We do not have this issue here, and never will unless we cut ourselves off from our own supplies.  Asia, China and Japan specifically, are the biggest competitors to the U.S., with Russia potentially being a dark horse in the race.  What will the economy look like in 2011 and beyond?  You can expect higher taxes, program cuts, across the board ranging from medical, public, and even projects not already allocated or paid for.  You can also expect to see an inward shift back to the states for capital investment.   I say this to remind people that business may not necessarily come to the Midwest.   The South east and Plains look much more favorable than high cost states like the whole upper east coast, California, or Illinois.  What it will do however, it stabilize the real estate markets and make the problem more localized, rather than the nationwide crisis we have been dealing with for almost three years.   Once prices are aligned with inventory, income, and the perception of limited space, values will rise.  As they do, banks will lend, they want to make money.  There is an estimated 1.2 trillion in excess reserves by private investors just sitting in the bank or  somewhere else collecting dust.  They are waiting some sense of where tax rates are going to be, regulations are going to be, and then be able to adapt to real expected returns.   I am all for rules in the game.  What I do not want is to have to play against the referees for victory.   Even in this economy, new capital is being expended in many sectors for new business inventories.   Bonus structures are now becoming the norm for every job title not in the public sector.   Rates, and programs look to be much more aggressive in the following areas:   USDA has now added funding for loans.  Continue to push this product as the population migrates into more rural areas for cheaper living.  Suburban Sprawl is next.   203k loans.   When you have a foreclosure, some banks are more eager to expect offers when they know an “as is” property has a 203k contract.   Reverse mortgages.  With 30% of the population over the age of 65, and over 80% of to transfer within the next 15 years, prepare to be bombarded with business for estate planning, tax deferral, annuity and insurance products, and reverse mortgages.   Good luck!

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Ron Granado

Account Executive                                                              

Plymouth Title Guaranty                                        

C) 708-476-3142 

O) 630-300-3900

F)  630-300-3901