National Bank of Greece (NYSE:NBG) Good Investment?

Investing in Greek Banks

On the news the European Union finally agreed to bail out Greece if the occasion ever presents itself, the National Bank of Greece (NYSE:NBG) quickly surged by about 17 percent.

Without getting into the wisdom of providing this underpinning for Greece, the reality is that it's there, and if the results of the bailout of U.S. banks are mirrored by the National Bank of Greece, or other Greek banks, some investors should make a lot of money.

Just look at the lows the giant banks in America like Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC) and Citigroup (NYSE:C) reached, and in a relatively short time exploded in share price to see the potential related to bailed out financial institutions.

Add to that the inevitable pressure by countries like Portugal, Italy and Spain to receive their piece of the pie once Greece receives theirs, and you could have a rotating group of banks over the next several years from these countries that can make some huge gains for investors.

Don't get me wrong, I don't agree with any of this going on, but from an investors point of view, it's a tremendous opportunity that just about guarantees great returns.

As far as the rhetoric that this is only if Greece some day will need the money, forget about that, it was only a way of stating things to make it palatable to the citizens of other countries in the European Union which will have to pay the bill of Greece's outrageous and irresponsible behavior.

Nonetheless, it's going to happen, and to ignore it would be a huge mistake, as the banks in the countries getting the bailouts will enjoy success for some time, along with those who invest with them.

EU Offers Greece €30 Billion in Loans

With continued ambiguity, even after saying they'll help Greece, the EU has offered specific details now, saying they'll provide €30 billion in loans to Greece in 2010 if needed.

The International Monetary Fund reiterated their commitment to the struggling country, offering another €10 billion in loans for 2010 as well.

For the next three years, overall loans could amount to €80 billion or $107 billion to under-gird the faltering nation.

Debt due in 2010 alone for Greece stands at €54 billion, which the Greek government says they can't continue to pay on.

While Greek Finance Minister George Papaconstantinou says the country hasn't asked for the loans to be activated at this time and are looking to borrow from the markets, that seems to be posturing to placate the growing outrage of the ultra-socialist Greece and the distributing of money they don't have to their people with no way of paying back what they have given them.

The people of Greece have become so socialist that they're rioting over not being coddled over, even as the country teeters on defaulting on its debt and losing their liquidity.

All Greece has done is put in place a plan of cutting their budget deficit to 8.7 percent, which is still far beyond the parameters the EU countries were supposed to adhere to, and they plan on doing that by increasing taxes, freezing pensions and cutting some of the wages in the public sector.

You don't hear them planning on doing what is really needed, and that is to limit the size of government and cut back on programs they obviously can't afford to offer. Until they do that, all of this is a band-aid putting off the inevitable.

Greece actually calls this an austerity program.

The Greek government has been overspending for many years, and what led to the crisis was a budget deficit in 2009 of 12.9 percent of overall economic output in the nation.

National Bank of Greece (NYSE:NBG) Ratings Cut

National Bank of Greece SA (NYSE:NBG) and four other Greek banks had the credit rating cut by Fitch Ratings, as concerns continue on the sovereign debt issue and how it will be handled.

The major reasoning according to Fitch behind lowering the credit ratings of the Greek banks was liquidity and funding, particulary the ability to remain liquid under their current market conditions.

As far as Greece itself, Fitch also lowered their credit to as low an investment grade as they go, and the outlook going forward is negative for the country.

The largest bank in Greece, the National Bank of Greece, had its rating dropped to BBB-, which is the lowest there is in investment-grade ratings.

Fitch says the Greek government seems to have the desire to support the banks, but the ability to do so isn't there, which was part of the downgrade decision as well. Only external aid will help Greece and the banks, which in fact does make them extremely suspect and subject to others outside of themselves.

Deposits have had dramatic decreases as well, with a drop of 2 to 4 percent in the last three months, and no end in site as to its continuation.

While European Union representatives have reaffirmed they're ready to rescue Greece if need be, it doesn't deal with the extraordinary irresponsibility and economic outlook inherent in its people, who seem to think everyone owes them a cushy lifestyle while they make little effort to provide for themselves.

Any rescue which doesn't deal with the core issues won't help at all, as shown by the so-called outrage of those in Greece who don't want to be stopped being taken care of by the government, even in the face of this economic disaster brought on by that very attitude and lifestyle.

For the Greek National Bank, they will continue to struggle to survive in the midst of this atmosphere, and until a rescue comes they will continue to flounder under the wait of circumstances now beyond their control.

Jim Rogers: Commodity Bull Market Continues

Jim Rogers on Commodities

Jim Rogers reiterated again recently that the commodity bull market will continue on its run, as demand for raw materials continues to rise and supply fights a losing battle to keep up with it.

Rogers added that gold investors should hold on to their positions in the metal, as he maintains it'll continue to rise on through the next decade.

While he acknowledges China and India have huge markets that will continue to grow, they alone cannot carry the rest of the world on its economic shoulders, and other countries will need to grow if we're to eventually experience a sustainable recovery ... and I would add, whenever that recovery actually begins.

Gold soared to a 3-month high Wednesday, as ongoing concerns over the Greece debacle continue, and liquidity seems to be the problem again, as consumers and others pull their money out, with banks doing their repo thing with Greek banks.

Although the dollar and yen will continue to be thought of in terms of places of safety, gold is becoming more and more to be thought of as an alternative currency which is far safer than any other in the world.

The U.S. dollar isn't really thought of as safe, just the lesser of evils between all paper currencies.

Jim Rogers on Commodities

Greece Entering Total Liquidity Crisis?

Greece liquidity drying up

News that a number of banks, among them Commerzbank, are pulling its repos with Greek banks, reveals the Greek crisis is now entering into being a liquidity crisis again.

Pulling the repos means the liquidity in the Greek market is basically dead.

Commerzbank is important because it's among the largest repo counterparties to Greek institutions. Pulling repos is basically the liquidation of assets, which will force banks to sell whatever assets they can at whatever price they can get for them to provide even one more day of liquidity.

Essentially what this is is the overnight lending market. Add to this the continual run on banks by depositors and it looks like Greece is on the verge of total loss of liquidity.