Old and still drinking water and eating dry white toast.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
I don't trade the pair...still down over 50% on my C, BAC, and NBG bank stocks...may have to work to 90 years.
Older women don't require the use of a rain coat....but you do have to double down on the oil
I have not been following the markets closely - short term it's alway's been a rigged market.
I try not to look at my short-term market losses since it's in my long term retirement accounts....I will bank the profit in 15 years.
I'm planning on my retirement asset to last till my early 90's.
You should do some y-tube so that people can see the process
Greek Default Would Spell ‘Havoc’ for Banks a Year After Bailout
June 20 (Bloomberg) -- A year after European officials bailed out Greece, investors say the region’s banks haven’t raised sufficient capital or cut loans enough to withstand the contagion that may follow a default.
While European lenders reduced their risk tied to Greece by 30 percent to $136.3 billion last year by not renewing loans, writing down the value of debt and shifting it off their books, they still have almost $2 trillion linked to Portugal, Ireland, Spain and Italy, figures from the Bank for International Settlements show, leaving them vulnerable if the crisis spreads.
“The Greek debt situation certainly has the potential to create havoc with the European banking system,” said Neil Phillips, a fund manager at BlueBay Asset Management Plc in London, which oversees about $45 billion. “A Greek default and the ramifications of that would be too ghastly for Europe and the European banking system to contemplate right now.”
German Chancellor Angela Merkel retreated last week from a confrontation with the European Central Bank that threatened to shove Greece into the euro zone’s first sovereign default, softening demands that bondholders be forced to shoulder a big part of a rescue. Questions remain about how any such burden- sharing agreement would work without prompting ratings companies to declare a default and whether Greek Prime Minister George Papandreou can persuade legislators to pass the austerity measures needed for a bailout.
Lurching Toward Insolvency
Concern that Greece was lurching toward insolvency drove the 48-company Bloomberg Europe Banks and Financial Services Index to a one-year low on June 16 and lifted the cost of insuring against default on the sovereign debt of Greece, Ireland and Portugal to record levels.
The cost of insuring Greek debt saw the biggest weekly increase last week, while credit-default swaps on National Bank of Greece SA, the country’s biggest bank, rose to a record, according to CMA, a data provider owned by CME Group Inc. that compiles prices quoted by dealers in the privately negotiated market. A Greek sovereign default could lead to insolvency of the country’s banks and a liquidity crisis as a result of a run on deposits, Standard & Poor’s said in a June 15 report.
Analysts say contagion following a Greek default could play out like this: Refinancing costs for Ireland, Portugal, Spain and possibly Italy and Belgium would soar, thwarting efforts to rein in public deficits and putting states under pressure to restructure their debt as well; banks in countries with weak finances could face a run by depositors, while other lenders would see their capital eroded by credit writedowns; investors would shun equity markets and the euro and seek the safest securities. In a worst-case scenario, panic could freeze credit markets, as happened after the bankruptcy of New York-based Lehman Brothers Holdings Inc. in September 2008.
Market ‘Massacre’
“If, after a year of discussion without conclusion, we conclude there will be a haircut, the next morning the market will massacre Ireland, Portugal and maybe other countries,” Federico Ghizzoni, 55, chief executive officer of UniCredit SpA, told journalists in Vienna June 16, referring to a Greek default.
The concern is already having an impact on European banks. BNP Paribas SA, France’s biggest bank, and rivals Societe Generale SA and Credit Agricole SA may have their credit ratings cut by Moody’s Investors Service because of their investments in Greece, the ratings company said on June 15. German banks could also be at risk from contagion, Fitch Ratings said last month.
‘Lehman’ Situation
Merkel, 56, said on June 17 she would work with the ECB to get Greek creditors to participate in a rescue on a voluntary basis, seeking to appease ECB President Jean-Claude Trichet, 68, who contends that any compulsory move to involve bondholders would trigger a default. The ECB doesn’t accept defaulted debt as collateral when providing the cash banks in Greece, Portugal and elsewhere depend on after being shut out of credit markets.
Merkel said June 18 in Berlin that policy makers must make sure the Greek crisis doesn’t infect the rest of the euro region and spark a new global financial crisis.
“We all lived through Lehman Brothers,” she told a meeting of activists from her ruling Christian Democrat party. “I don’t want another such threat to emanate from Europe. We wouldn’t be able to control an insolvency.”
European finance ministers meet in Luxembourg for a second day today to try to hammer out an agreement on a Greek rescue before a Brussels summit of EU leaders on June 23-24.
The risk that euro-area banks holding Greek government bonds will be saddled with losses increased after S&P slapped Greece with the world’s lowest sovereign credit rating June 13.
No ‘Clear Answer’
Greece should “absolutely not default,” Josef Ackermann, CEO of Frankfurt-based Deutsche Bank AG, said in a June 17 interview in St. Petersburg, Russia. The EU needs to provide more aid to the country if required, he said.
Ackermann, 63, told CNBC the same day that the risk of a Greek default lies in “what is going to happen in other markets and what is going to happen in other countries,” concluding that “no one has a clear answer.”
Ackermann knows about contagion firsthand. He told an audience in Frankfurt’s Congress Center in September 2007 that risks from the U.S. subprime mortgage market were “manageable.” The crisis spread to other markets soon after, leading to more than $2 trillion of losses and writedowns worldwide and the collapse of Lehman Brothers a year later.
“The worst consequence of any Greek sovereign default for German and other European banks would be a sharp increase in general capital market and creditor risk aversion at a time when many banks are still in rehabilitation mode,” Michael Dawson- Kropf, a Frankfurt-based Fitch analyst, said in a May 25 report.
Raising Capital
European banks have raised 59 billion euros ($84 billion) since stress tests last July, according to calculations by Huw van Steenis, an analyst at Morgan Stanley.
Independent Credit View, a Swiss ratings company that predicted Ireland’s banks would need another bailout last year, said in a stress-test study earlier this month that 33 of Europe’s biggest banks would need $347 billion of additional capital by the end of 2012 to boost their tangible common equity to 10 percent from 9.1 percent at the end of 2010. The group chose that threshold because it’s about 30 percent above the average ratio for the past 10 years.
An S&P stress test published in March estimated European banks would need as much as 250 billion euros in fresh capital if faced with a “sharp” increase in yields and a “severe” economic downturn.
German, French Banks
French lenders had the highest overall foreign claims on Greek borrowers of $56.7 billion, including $15 billion in public debt, at the end of 2010, data from the BIS showed. French banks had $589.8 billion of loans tied to Ireland, Italy, Portugal and Spain.
German lenders were the biggest foreign owners of Greek government debt with $22.7 billion in holdings last year and had the second-most overall claims, the BIS said. Their claims on Ireland, Italy, Portugal and Spain amounted to $498.8 billion. The two countries hold more than 60 percent of all foreign claims on Greece, according to BIS data.
Banks in the two countries have lowered their risk tied to Greek public debt by 25 percent to $37.6 billion from the end of March 2010 through December. The main reason for the decline is companies letting bonds or loans expire without renewing them, according to Lutz Roehmeyer, who helps manage about $17 billion at Landesbank Berlin Investment in Berlin. Lenders also have been writing down the value of Greek holdings, setting aside provisions and moving assets into so-called bad banks, as well as selling shares to boost reserves, he said.
‘Direct Hit’ Manageable
“The direct hit from Greece is manageable because investors have had time to prepare, but contagion to other countries is the big risk,” Roehmeyer said. “If the crisis spreads to Ireland, Portugal and Spain, it would be too big for the banks to shoulder.”
The impact of credit-default swaps, which led to the near- collapse of American International Group Inc. in 2008, may be limited in a Greek default. Credit-default swaps on Greek sovereign debt cover a net notional $5 billion, according to the Depository Trust & Clearing Corp., which runs a central registry that captures most trades. That’s only 1 percent of the government’s $482 billion of bonds and loans outstanding, according to data compiled by Bloomberg.
Swaps on Italian sovereign debt cover a net notional $25 billion, the most of any country or company in the world, according to DTCC. That compares with $2.3 trillion of debt.
Most banks have already had to write down the value of their Greek bond holdings as they have fallen in the market, said Florian Esterer, who helps manage more than $60 billion at Swisscanto Asset Management AG in Zurich.
“The biggest problem that we have is less to do with the loss of Greece as such and more to do with the question of what would happen to other countries,” Esterer said. “The risk of contagion is probably exactly the same as a year ago.”
News Source
Europe Fails to Agree on Greek Payment, Pressing Papandreou
June 20 (Bloomberg) -- European governments failed to agree on releasing a loan payment to spare Greece from default, ramping up pressure on Prime Minister George Papandreou to first deliver budget cuts in the face of domestic opposition.
On the eve of a confidence vote that may bring down Papandreou’s government, euro-area finance ministers pushed Greece to pass laws to cut the deficit and sell state assets. They left open whether the country will get the full 12 billion euros ($17.1 billion) promised for July as part of last year’s 110 billion-euro lifeline.
“We forcefully reminded the Greek government that by the end of this month they have to see to it that we are all convinced that all the commitments they made are fulfilled,” Luxembourg Prime Minister Jean-Claude Juncker told reporters early today after chairing a euro-crisis meeting in Luxembourg.
Decisions on the next payout and a three-year follow-up package were put off until early July, prolonging Greece’s fiscal agony and heightening the brinksmanship that has marked Europe’s handling of the unprecedented debt crisis.
The seven-hour finance ministers’ meeting coincided with the start of a three-day Greek parliamentary debate in Athens over a confidence vote in a new cabinet at what Papandreou called a “critical crossroads.” Papandreou has 155 seats in the 300-seat parliament.
Referendum Proposal
The Greek premier said he planned to hold a referendum later in the year on a constitutional revamp with the goal of tackling the root causes of Greece’s debt and deficits that are “symptoms of the illness, not the cause.”
Papandreou travels to Brussels today to meet European Union President Herman Van Rompuy and European Commission President Jose Barroso. The confidence vote is scheduled for late tomorrow. The Greek crisis is set to dominate an EU summit in Brussels on June 23-24.
“The communication cacophony surrounding the policy response in our view is one of the reasons why the risk of contagion has remained and remains high,” said Silvio Peruzzo, an economist at Royal Bank of Scotland Group Plc in London.
The euro meeting was flanked by a teleconference of Group of Seven financial officials, two weeks after President Barack Obama singled out Germany as the key country responsible for preventing an “uncontrolled spiral of default” in Europe.
Prospects for a second aid package to stave off the euro area’s first default had been enhanced by last week’s decision by German Chancellor Angela Merkel to drop calls for a mandatory bond exchange that might lead credit rating companies to declare Greece unable to pay its bills.
Merkel’s Concession
Merkel’s June 17 concession gave a lift to stocks, bonds and the euro, spurring optimism that Europe would get ahead of the debt crisis that has exposed the weaknesses of the 17- country currency union.
While the German gesture buoyed Greek bonds, the 10-year yield of 16.94 percent remains almost 14 percentage points above the yield on German bonds, Europe’s safest investment. Standard & Poor’s on June 13 cut Greece by three levels to CCC, branding it with the world’s lowest debt grade.
Speculation that Greece will default has bled into other European markets, leading economists such as Nouriel Roubini to predict that the 17-nation euro, the high point of Europe’s economic integration, won’t survive in its current form.
“I don’t rule out that Greece and Portugal, if they aren’t able to recover competitiveness and growth and social tension further increases, may go back to the drachma and escudo on the wave of populist governments,” Roubini, head of Roubini Global Economics LLC, told Italy’s Il Sole 24 Ore on June 18.
Spanish Spread
Ireland and Portugal followed Greece in obtaining emergency loans in the past year. Spain’s finances came under the microscope last week, with investors pushing the extra yield on 10-year Spanish bonds to 261 basis points, the highest weekly close since January.
Moody’s Investors Service said June 17 it may cut its Aa2 rating on Italy, with 2010 debt of 119 percent of gross domestic product, Europe’s second highest after Greece.
Greece needs to cover about 4 billion euros of bills maturing between July 15 and July 22, and faces about 3 billion euros of coupon payments in the month, according to Bloomberg calculations. A bigger test comes Aug. 20 when Greece must redeem 6.6 billion euros of maturing bonds.
Venizelos Commitment
The new Greek finance minister, Evangelos Venizelos, who was named in Papandreou’s cabinet overhaul three days ago, came to Luxembourg with a “strong commitment” to the planned 78 billion euros in budget cuts that provoked street protests last week.
“We can achieve our target thanks to the efforts of our people and thanks to the cooperation and the assistance of our partners,” Venizelos said.
More than 47 percent of 1,208 Greeks surveyed by Kapa Research SA for To Vima newspaper oppose the wage and spending cuts and higher taxes, and want early elections. Almost 35 percent said the package should be approved.
Germany, which as Europe’s largest economy is the biggest guarantor of the aid packages to Greece, Ireland and Portugal, insists on an “ambitious” economic overhaul in Athens, Finance Minister Wolfgang Schaeuble said.
“It also depends on Greece making the necessary decisions with a fundamental consensus of the political parties so that we can be confident that Greece will live up to its commitments,” Schaeuble said.
Greek Rollovers
The key plank of a second aid package would be a pledge by banks, insurance companies and asset managers to buy new Greek bonds to replace maturing ones, instead of European governments stepping in with taxpayers money.
In a statement, the ministers said the unlocking of fresh aid depends on working out “voluntary private sector involvement in the form of informal and voluntary rollovers of existing Greek debt at maturity.”
While Germany bowed to European Central Bank and French demands not to compel investors to buy new Greek bonds as old ones expire, the lines are blurry between a “voluntary” and “compulsory” rollover that would lead rating companies to declare Greece in default.
On the table are incentives for bondholders to maintain their exposure to Greece.
News Source
Greek PM Calls For Support, Plans Referendum
ATHENS (Dow Jones)--Prime Minister George Papandreou Sunday called on parliament to back his newly-formed cabinet, as Greece sought fresh aid from its European partners and with just weeks to go before the country is due to run out of cash.
"I request a vote of confidence so that we can, with a strong voice, negotiate a new agreement," Papandreou said.
Speaking at the start of a three-day debate ahead of a vote of confidence late Tuesday, Papandreou also said he would propose a referendum on political and constitutional reforms for later this autumn.
The reforms would aim to change a number of long-standing issues in Greece's political system--such as the rules on political party finances or legal protections now enjoyed by government ministers--that are the source of widespread public discontent with the political system.
Papandreou said he would set up a committee to collate and work through reform proposals and pledged the government would "immediately afterwards to go for a referendum. In another words: in the autumn. In the autumn we will go for a referendum about the big changes needed for the country."
His remarks come days after a mass protest and strike over the government's latest austerity plan shook Greece's political establishment, and touching off a revolt within the ruling Socialist party.
In an effort to assuage both public opinion and the Socialist rank-and-file, Papandreou reshuffled his cabinet Friday, sacking his unpopular finance minister, George Papaconstantinou, who was seen as the architect of those austerity measures.
In May last year, Greece narrowly avoided default with the help of a EUR110 billion bailout from its fellow euro-zone members and the International Monetary Fund.
But facing still prohibitively high borrowing costs on international markets, Greece now needs another EUR100 billion or so in fresh loans to cover its borrowing needs for the next three years.
Papandreou said he would travel to Brussels for talks Monday and Tuesday with European Commission President Jose-Manuel Barroso and European Council President Herman Van Rompuy about a new aid deal for the country.
Meanwhile, in one of his first duties since assuming the role, Greece's newly appointed finance minister, Evangelos Venizelos, will meet with fellow euro-zone finance ministers in Luxembourg on Sunday and Monday to discuss the aid deal.
But as a quid-pro-quo for any further loans, Greece has promised to pass a EUR28 billion austerity package aimed at slashing the budget deficit over the next five years.
After several recent resignations and defections, the Socialists--who are lagging behind the main opposition in public opinion polls--now control just a five-seat majority in Greece's 300-member parliament. At least one Socialist deputy has said he will vote against the measures.
The vote is expected to take place by June 30, with Greece's unions and others planning further mass protests against the austerity plan.
New Source
How about the Tobacco Tax which started after the states suited the Tobacco Companies.....that the smoker's are paying.
The Tobacco Master Settlement Agreement (MSA), which settled the lawsuit in exchange for a combination of yearly payments to the states and voluntary restrictions on advertising and marketing of tobacco products.
All will make the share price trade lower....good luck on your entry point.
Based on your second statement, you should not.
"I am a small investor and do not want to take big risks."
But if you you do not mind taking risks (less than 3% of your overall stock holding) then it's worth the risk after the final outcome of both the bond exchange and share sale.
ECB tries to squash 'fruitless' EU plans for Greece
FRANKFURT — European Central Bank executives struggled last week to parry European Union plans to aid Greece via potentially risky schemes that could see Athens declared in default on its sovereign debt.
ECB president Jean-Claude Trichet, vice president Vitor Constancio and chief economist Juergen Stark argued that any moves that obliged private investors to take part in a Greek bail-out were fraught with danger.
Stark called Friday in Frankfurt for an end to what he said was a "really fruitless discussion" on private sector involvement.
"The real issue is the (reform) programme for Greece and to implement the programme in full," he stressed.
Trichet warned Thursday of the dangers of a "selective default" that could wreak havoc across the 17-nation eurozone.
And Constancio added a final note of caution. The idea of a concerted, or orderly reduction on the amount of money Greece owed -- known as a haircut in financial markets -- was "definitely a very dangerous path", he said.
Even a mooted rollover of bonds by private creditors, which the ECB does not intend to do with the Greek debt it owns, would not necessarily resolve the Athens' debt crisis, the ECB executives said.
International ratings agency Moody's, for one, said it might still be considered a default if it was not clearly voluntary on the part of creditors.
Stark warned that new bonds might not qualify as collateral against ECB loans.
Governments and other policy makers shaping the new Greek bailout base efforts on "the underlying assumption that the ECB would continue to accept" rolled-over Greek debt as collateral for its liquidity operations, Stark said.
But he warned: "This remains to be seen."
A refusal would leave the commercial Greek banks, which own much of the country's debt, dead in the water -- for many of them are already dependent on the ECB for funds.
Any collapse of the Greek financial sector could threaten countries such as Ireland and Portugal, which are also struggling with heavy debt and have accepted international bail-outs.
EU leaders are nevertheless pushing ahead with plans to involve private investors in the next rescue plan for Greece.
It has already benefitted from an initial package worth 110 billion euros ($160 billion) backed by the EU and International Monetary Fund.
EU president Herman Van Rompuy said Friday that he was confident a new aid package for Greece could be agreed by the end of June.
The upcoming EU summit on June 23-24 is shaping up to focus primarily on another rescue for Athens, which is said to need 90 billion euros more.
In recent days, attention focused on an initiative likened to a 2009 deal in which investors simply rolled over maturing bonds. But the European Commission now suggests the Greek deal could go even further.
"We have also examined the feasibility of a voluntary debt rescheduling or reprofiling, of course on the condition, extremely important, that this would not create a credit event," said Amadeu Altafaj, spokesman for EU economic affairs commissioner Olli Rehn.
Greek Finance Minister George Papaconstantinou said a new rescue package should be a combination "of funds coming from the country's planned privatisations, the voluntary participation of the private sector and possible loans" from eurozone countries.
In Berlin, German Finance Minister Wolfgang Schaeuble said eurozone finance ministers would create a working group to find a way to involve private investors in any new aid.
A second rescue plan was "inevitable", he told German lawmakers.
But it should establish "a fair distribution of risks between the taxpayer and private creditor", to signal "that you cannot simply dump the risk on the taxpayer".
Constancio insisted that it was the responsibility of EU governments to "find the mechanisms that do not create the type of risks that we are concerned about".
Finally, Trichet repeated a call for stronger eurozone economic governance, a long-term project that would require capitals to relinguish some sovereignty to ensure a stronger future.
"We should ourselves 'learn to think (more) continentally'," Trichet told a conference of analysts and other ECB observers, quoting Alexander Hamilton, a US founding father who established that country's first national bank.
News Link
Thanks - It show the EUR short position and why I'm getting my ass handed to me on Greece...
Long NBG and it's starting to look sweet again...
Anger mounts in Greece as eurozone ministers edge nearer to bailout deal
Greece's international creditors inched closer to giving the indebted country a second bailout on Friday as officials acknowledged that without further aid Athens would be unlikely to meet repayments on its huge borrowings.
Eurozone ministers agreed "in principle" to the rescue package during talks in Vienna, European Union sources said. The bailout, reportedly worth €65bn (£58m) to cover maturing debt over the next two years, would have to be finessed before being finally agreed when the Euro Group – the conference of finance ministers of the eurozone countries – next meets on 20 June.
The prospect of the nation securing another injection of cash, barely a year after receiving €110bn in emergency loans from the EU and IMF, assuaged market fears of default as the prime minister, George Papandreou, flew to Luxembourg to convince lenders that he would back up the extra aid with deeper austerity. Premiums on Greek bonds and the cost of insuring Greek debt fell sharply.
Papandreou, who has promised to make budget savings of €6.4bn in 2011, was expected to outline a medium-term budget plan, including a faster sell-off of public assets, to Jean-Claude Juncker, who presides over the 17-nation Euro Group.
Both the EU and International Monetary Fund have said accelerated privatisation by Athens, which hopes to raise €50bn with the sale of ailing state companies, resources and prime property assets, will be the main condition for further aid.
After weeks of negotiations with creditors, the Greek finance ministry issued a statement insisting a review of the public finances had "concluded positively", although it avoided saying whether the auditing process would release a fifth tranche of aid desperately needed to pay public sector wages and pensions. The €12bn instalment is due in June.
Papandreou has also pledged to ignore vested interests and forge ahead with structural reforms to restore the country's stagnant economy and notorious lack of competitiveness. But he faces formidable opposition from a public that has already endured wage and pension cuts, tax increases and loss of benefits.
Politicians have increasingly become the target of rage, with protesters pelting them with stones and yoghurt. Tens of thousands of demonstrators have also converged on public squares in a show of mass anger.
Militant union activists said on Friday that the new measures would "turn workers into modern slaves" and, after storming the finance ministry, hung up a huge banner that appealed for an "organised overthrow" of the austerity programme.
Greece has missed targets in its current bailout programme because of a revenue shortfall due to a deep recession and chronic tax evasion, requiring extra fiscal measures worth €6.4bn, or 2.8% of gross domestic product, this year. The Greek finance ministry said on Friday that the government would finalise new steps in the coming days, putting them to parliament after the cabinet approves them.
The new bailout programme also faces protest from some backbenchers in Papandreou's governing Pasok party. But increased funding for Greece may in turn face resistance in the parliaments of fiscally conservative northern states, especially Germany and the Netherlands.
Some European politicians and economists argue that investors who bought Greek government bonds should share that burden, perhaps by cutting the value or extending maturities.
Claudio Loser, a former director of the western hemisphere for the IMF, said the IMF should push harder for Greece to restructure its debt and negotiate so-called "haircuts", or reductions in the value of bonds, with investors
News Source
Talk to the hand...
acetraderfx
Whitey on the moon - gil scott-heron
RIP gil scott-heron
RIP: Gil Scott - The Revolution Will Not Be Televised
Gil Scott
Analysis: Europe groping for new Greek crisis plan
(Reuters) - The clearest news to emerge from a secretive meeting of top euro zone finance officials on Friday night was the acknowledgement that Greece needs a new economic plan to tackle its deteriorating debt crisis.
The plan may include pushing back Greece's budget targets, easing the terms of emergency loans in its 110 billion euro international bailout, giving it additional aid, and a relatively mild restructuring of Greek sovereign debt held by private investors, official sources and analysts say.
Speaking to reporters after Friday's gathering in Luxembourg, a meeting that senior finance officials in many other euro zone countries did not know was taking place, Jean-Claude Juncker, chairman of the zone's finance ministers, said there was a consensus that Greece needed a new plan.
"We think that Greece does need a further adjustment programme," he said, after meeting with the finance ministers of Germany, France, Italy, Spain and Greece as well as European Union monetary affairs commissioner Olli Rehn and European Central Bank President Jean-Claude Trichet.
"This has to be discussed in detail and will be taken up at the next Eurogroup meeting on May 16," he said, referring to a conference of finance ministers of all 17 euro zone states.
Juncker and the Greek government strongly denied a German media report that Friday's meeting was called to discuss the possibility of Greece leaving the euro zone or the idea of restructuring its bonds.
But his statement was an admission that Greece's current economic plan, under which it is trying to hit annual targets for cutting debt levels that were specified in its bailout agreement with the European Union and the International Monetary Fund last May, simply is not working.
Greece's austerity measures have kept it in such a deep recession that it has been unable to hit fiscal targets. Its budget deficit was 10.5 percent of gross domestic product last year, way off the 8.1 percent target; Athens is supposed to reach 2.6 percent in 2014, which would require further painful steps. At about 327 billion euros ($470 billion), its total debt is nearly 150 percent of GDP and still growing.
CONCESSIONS
A new Greek economic plan could push back the deadlines to hit budget targets, giving the economy more room to grow out of trouble. There would be a precedent for this; an international bailout plan announced for Portugal this week involved easing its fiscal targets.
Euro zone official sources told Reuters that a new plan would probably also involve softening the terms on the 80 billion euro portion of emergency loans extended by the EU under the bailout. The maturities of the loans have already been extended once, to 7.5 years from three years; they could be extended further, while the interest rate of about 4 percent now paid on them might be cut.
That is something which Greek Finance Minister George Papaconstantinou has pushed for and which some European politicians, including a senior official in German Chancellor Angela Merkel's coalition, have said would be logical.
An apparent flaw in Greece's current economic plan is that it envisions Athens returning to the markets to borrow money from next year; Greek bond yields are still sky-high and the cost of insuring its debt is at a record high, so many investors doubt this will be possible at a reasonable cost for Greece.
Greece may therefore have to be given extra money that lets it stay independent of the markets for longer. One option would be for the euro zone's bailout fund, the European Financial Stability Facility, to buy Greek government bonds upon issue; planned reforms to the EFSF would enable it to take such action.
In an interview with Italian newspaper La Stampa published on Saturday, Papaconstantinou said he still believed Greece could return to the markets next year but if not, the EFSF might fill the gap.
RESTRUCTURING
Such steps could help Greece weather some of its immediate financing problems but they would do little to address its long-term challenge: reducing the size of its debt mountain. Some form of restructuring for Greek bonds may therefore be inevitable at some stage.
David Mackie, an analyst with JP Morgan Chase in London, argued in a report on Friday that the likelihood of a Greek debt restructuring was rising, though it was not inevitable.
"The motivation for such a move would be to limit the financial exposure of the rest of the region to Greece and to incentivise the Greek government to stick to the current objective of generating a sizable primary surplus by 2014," he wrote.
"If it were to happen, it would likely involve an extension of the maturity of the market debt that is due to mature in the next few years." He added: "We are not yet ready to forecast that a debt restructuring will occur this year."
Greek and European officials, wary of panicking the markets, insist a restructuring is not on the cards, but privately EU officials are increasingly open about the possibility.
To reduce the impact on Greek and European banks, any restructuring might exclude an outright cut in the principal paid on the bonds, known as a "haircut." But an extension of maturities on the bonds would be relatively palatable.
A large part of Greece's funding is at the short end of the curve; that is unsustainable so the debt should be swapped for longer-dated paper, said a senior EU official, speaking on condition of anonymity.
Another possibility, he said, would be to offer investors bonds with different structures in exchange for their current holdings. The new bonds might for example incorporate growth targets, so that if Greece achieved a certain GDP growth rate over a fixed time, the bonds would pay out a higher coupon.
"In that way, bondholders might be incentivized to trade in their old debt for something that could be more advantageous to them, without necessarily taking a haircut," he said. Such a voluntary scheme, based on incentives, could have much less of a negative impact on markets than an obligatory restructuring.
A possible model for Greece is Uruguay, which in 2003 successfully "reprofiled" its debt, largely without haircuts.
Papaconstantinou, the Greek finance minister, has said one reason why a debt restructuring is out of the question is that it would cut Greece out of international markets "for 10-15 years." But in Uruguay's case, the country was able to return to the market 30 days after it restructured.
News Source
That trend has been broken....EUR/USD has trending upward whereas NBG has been trending downward.
I'm a long term holder, I have been adding about 2000 shares a month. Holding 12,500 shares @ average $1.72
Short-term it's in the best interest of Greece to trash their credit, so that the outstanding government debt can be bought on the secondary market for pennies on the dollar