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.

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.