Greece Calls Europe's Bluff

Mario Monte, the Italian Prime Minister, made some market supporting statements last week which must have sounded familiar to readers of this column. Mr. Monte said some things Greeks have long been saying as well, albeit at the top of their lungs while being beaten back by police batons. He said the troika of the IMF, European Union and European Central Bank had been too hard on Greece, demanding drastic change of the Greeks over a period much shorter than appropriate. The short-term disruption of this radical change has been more detrimental than the long-term benefit it aims to achieve, and so indigestible by the Greeks. As a result, the Greeks have spoken, and finally, European ears are listening.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Article is relevant to Deutsche Bank (NYSE: DB), Banco Santander (NYSE: STD), ITA (Nasdaq: ITUB), UBS (NYSE: UBS), Westpac Banking (NYSE: WBK), Lloyds Banking Group (NYSE: LYG), Barclays (NYSE: BCS), Credit Suisse (NYSE: CS), Allied Irish Bank (NYSE: AIB), Banco Latinamericano (NYSE: BLX), National Bank of Greece (NYSE: NBG), Royal Bank of Canada (NYSE: RY), BBVA Banco Frances (NYSE: BFR), The Bank of Ireland (NYSE: IRE), Bank of Montreal (NYSE: BMO), Canadian Imperial Bank of Commerce (NYSE: CM), ING Groep (NYSE: ING), Citigroup (NYSE: C).

Greece Snuffs EU Bluff

You might remember a series of articles written here over the last few years on the topic of the impossible austerity plan shoved down the throats of the Greeks. It took more than words, though, to gain the attention of Greece’s European masters. It took more than uprising even. It took the action of Greek voters, who so vehemently opposed austerity as to lift a radical political coalition into a position of influence. With political polls conflicted now as to what could result when a second election proceeds in June, the market has begun to price in a Gr-exit, or Greek exit from the euro-zone. Likewise, Moody’s (NYSE: MCO) and Standard & Poor’s (NYSE: MHP) have begun to account for what might follow in Spain, Portugal and Monte’s Italy. Suddenly, and not coincidentally, the impossible is possible for Europe.

The idea of offering euro-bonds, a unified action that at least the Germans had ruled unconstitutional, is now being openly and seriously considered. But it took the rise of the “little people,” as one politician notoriously labeled them a few years back, to force the hand of power in favor of financial fairness. When Greece’s newest political voice, Syriza, said the Europeans were bluffing regarding the required nature of their prescription for Greece, hardly anyone believed them, and yet today it looks as though they were right.

It reminds me of an interesting political ploy tried by the Greeks not long before. Just days before PASOK’s persecuted leader, George Papandreou said the Greeks deserved a referendum before inheriting the weights of austerity, we wrote that the Greek people should determine their own fate. And after the PM had played his poker hand, we said it might not be the political suicide it seemed to be, but instead genius, because it would force the Europeans to show their true hand. That same truth is apparent again today, and it reflects a weaker European position than what they had bluffed they held.

In the end, it looks as though the path was always laid out, but that political patience would have to persevere until the populace of Europe was ready to venture down it. What is happening is a better bonding of Europe, through the catalyst of crisis and the glue of fear. As the region ties itself together, though, I worry it will later more easily drown. This is because, while I understand the construct of the plan is to solidify the union, I believe fiat currency will be more easily weakened in the process. This is because I see another catalyst ahead that only a fearless visionary might venture to present now, which will unravel this best laid plan. However, this is better the topic of another story.

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Interpreting the International Trade Report

The International Trade Report for the month of March showed an enthusing trade deficit expansion of $6.4 billion, as it widened to $51.8 billion. Economists surveyed by Bloomberg had forecast expansion to a lesser $49.5 billion at the consensus. We think the news was an important driver for stocks Thursday, killing a six day slide, but just barely. Through this report, we attempted to determine whether the trade data was truly the ace it seemed to be. In our study and after accounting for several important catalysts, we found it to be less enthusing than the market’s initial reaction might imply. This may be why stocks retraced ground Thursday into the close.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Relative tickers include the Industrial Select Sector SPDR ETF (NYSE: XLI), Caterpillar (NYSE: CAT), Boeing (NYSE: BA), General Motors (NYSE: GM), Ford (NYSE: F), SPDR S&P 500 (NYSE: SPY), SPDR Dow Jones Industrial Average (NYSE: DIA), Starbucks (Nasdaq: SBUX), McDonald's (NYSE: MCD) and Yum Brands (NYSE: YUM).

International Trade Report

The good news implied in the expansion of the trade deficit may be counterintuitive, but I believe it continues to apply today. It is two-fold. When America’s economy was most healthy over the last decade, the trade deficit was wide and expanding. Of course, America’s leaders have engaged China over the last few decades for two reasons. The first was for American companies to find cost savings in manufacturing overseas. This widened profit margins for American companies while offering our consumers lower prices for goods. The impact to our labor markets and the tendency for China to bend the rules of fair trade has cost us though.

The second hope was for American companies to find opportunity to participate in the development of the bursting populations of the Far East. Clearly, the hope is that trade will work to our benefit over the long run as well as it has up until now, depending on China’s willingness to play fairly. If it all goes according to plan, Chinese demand would support the growth of American companies and eventually drive a trade surplus with the nation. While I have my doubts about that, today, the widening trade gap still reflects a healthy situation in my view. Over the long run, I anticipate China will simply steal American intellectual property and know-how and advance its own home grown versions of our companies and products, so that the projected benefits will prove overstated. I’ll talk more about the trouble I see with China in a future article.

Another positive sign of the trade data (on the surface) was that the report showed that both imports and exports increased on a monthly basis. It’s good news, reflecting a growing global economy in March, but there’s a fly in the ointment we discuss further along here. On a year-over-year basis, the deficit expanded by $5.8 billion, with exports up 7.3% or $12.8 billion, and imports higher by 8.4% or $18.5 billion.

Exports increased 2.9% in March, or by $5.3 billion. This seems like fabulous news given 20% of American exports are sold into Europe, or have been historically. Unfortunately, closer inspection shows the goods deficit with Europe expanded to $9.8 billion in March, from $5.9 billion in February. This is probably due to a decline in exports sold into the struggling region, but might also be partly driven by increased imports into America. Of course, dynamic currency markets are playing a role as well.

Given the importance of China, the increase of the trade deficit to $21.7 billion in March, from $19.4 billion in February, seems enthusing. It’s probably being driven by more demand for Chinese made goods here at home. It may also be driven by lower exports into China, but given the latest expansions of General Motors (NYSE: GM) and Ford (NYSE: F) in China, that seems less likely. Also, despite the recently slowing of economic growth in the important developing nation, recent data from Starbucks (Nasdaq: SBUX), McDonald’s (NYSE: MCD), Yum Brands (NYSE: YUM) and others continues to show increasing demand for American goods and services. And China has taken steps to spur growth, including opening up to more foreign investment, which not coincidentally, has sparked a rally in many of China’s small and microcap names.

The market also found it enthusing that American imports increased by 5.2%, or $11.7 billion. With the microscope on the globally tied American economy and on consumer spending under today’s unique unemployment situation, we found reassurance in the growth of imports. Growth was attributed to capital goods, consumer goods, industrial supplies and materials, and automotive vehicles, parts and engines. We have to agree that those would be the best places to find increased activity.

That aforementioned fly in the ointment could be found in this report and through the study of a second report. The trade deficit with OPEC expanded by $2.7 billion to reach $9.1 billion. This was obviously being driven by price increase in petroleum and imported distillates. In fact, higher fuel prices skewed the growth of both factors in international trade. Import and export prices were reported the same day as the international trade data, as always, but for April. If we want to compare apples to apples, we have to dig up the March data. Unfortunately, it shows that March saw steep increases in both import and export prices. Therefore, fuel prices contributed to both sides of the trade scale, but especially to import growth, which we hoped to attribute American economic demand to. I suspect that this realization helped to quell some of the day’s enthusiasm Thursday, and the realization that the jobless claims data was not as exciting as the headlines portrayed.

The shares of the most likely benefactors of the data were mixed to modestly higher, before fading into the close Thursday. Much of the export growth was attributed to industrial goods and supplies, but the Industrial Select Sector SPDR ETF (NYSE: XLI) ended only fractionally higher. Shares of major industrials like Caterpillar (NYSE: CAT), Boeing (NYSE: BA) (see my report) and General Motors (NYSE: GM) all closed in the red, as they also contended with soft Chinese trade data published the same day.

As time passes, the suspect positives from this report will lose their impact, and the market will continue to look forward to new data points for insight into what is developing in trade. My outlook is modestly negative, with a view for the cliff’s edge that we should reach soon enough, given the disruption driven by Europe and potentially Iran this year.

This article should interest investors in Boeing (NYSE: BA), Raytheon (NYSE: RTN), Digital Globe (NYSE: DGI), GenCorp (NYSE: GY), General Dynamics (NYSE: GD), Goodrich (NYSE: GR), Northrop Grumman (NYSE: NOC), Honeywell (NYSE: HON), Lockheed Martin (NYSE: LMT), Rockwell Collins (NYSE: COL), L-3 Communications (NYSE: LLL), EMBRAER (NYSE: ERJ), FLIR Systems (Nasdaq: FLIR), BE Aerospace (Nasdaq: BEAV), TransDigm (NYSE: TDG), Spirit Aerosystems (NYSE: SPR), CAE (NYSE: CAE), Alliant Techsystems (NYSE: ATK), Hexcel (NYSE: HXL), Triumph Group (NYSE: TGI), Esterline Technologies (NYSE: ESL), Moog (NYSE: MOG-A), Heico (NYSE: HEI), Teledyne (NYSE: TDY), Curtiss-Wright (NYSE: CW), Cavco (Nasdaq: CVCO), Skyline (NYSE: SKY), Nobility Homes (Nasdaq: NOBH), Palm Harbor Homes (Nasdaq: PHHM), Mohawk Industries (NYSE: MHK), Interface (Nasdaq: IFSIA), Albany International (NYSE: AIN), Unifi (NYSE: UFI), Illinois Tool Works (NYSE: ITW), Tyco International (NYSE: TYC), Cummins (NYSE: CMI), Kubota (NYSE: KUB), Ingersoll-Rand (NYSE: IR), Dover (NYSE: DOV), ITT Corp. (NYSE: ITT), Flowserve (NYSE: FLS), Pall (NYSE: PLL), Dresser-Rand (NYSE: DRC), SPX (NYSE: SPW), Gardner Denver (NYSE: GDI), IDEX (NYSE: IEX), Nordson (Nasdaq: NDSN), Graco (NYSE: GGG), Actuant (NYSE: ATU), Middleby (Nasdaq: MIDD), ABB (NYSE: ABB), Eaton (NYSE: ETN), Nidec (NYSE: NJ), Rockwell Automation (NYSE: ROK), Ametek (NYSE: AME), Regal Beloit (NYSE: RBC), Thomas & Betts (NYSE: TMB), Woodward Governor (Nasdaq: WGOV), Caterpillar (NYSE: CAT), Deere (NYSE: DE), CNH (NYSE: CNH), Joy Global (Nasdaq: JOYG), Bucyrus (Nasdaq: BUCY), Agco (Nasdaq: AGCO), Emerson Electric (NYSE: EMR), Parker Hannifin (NYSE: PH), Roper Industries (NYSE: ROP), Pentair (NYSE: PNR), Waste Management (NYSE: WM), Republic Services (NYSE: RSG), Fastenal (Nasdaq: FAST), Vulcan Materials (NYSE: VMC), MDU Resources (NYSE: MDU), Martin Marietta Materials (NYSE: MLM), Owens Corning (NYSE: OC), Valspar (NYSE: VAL), Precision Castparts (NYSE: PCP), United States Steel (NYSE: X), Reliance Steel (NYSE: RS), CRH (NYSE: CRH), CEMEX (NYSE: CX), Eagle Materials (NYSE: EXP), Fluor (NYSE: FLR), McDermott International (NYSE: MDR), Foster Wheeler (Nasdaq: FWLT), Empresas ICA (NYSE: ICA), Stanley Black & Decker (NYSE: SWK), Timken (NYSE: TKR), Kennametal (NYSE: KMT), Leucadia National (NYSE: LUK), Masco (NYSE: MAS), Weyerhaeuser (NYSE: WY), Quanta Services (NYSE: PWR), Chicago Bridge & Iron (NYSE: CBI), EMCOR (NYSE: EME), Snap-on (NYSE: SNA), Toro (NYSE: TTC), GM (NYSE: GM) and Ford (NYSE: F).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Euro Land is Doomed - Achilles Heel of Globalization

One of the classic landmarks of the Great Depression was the tendency to protect local and national markets from competition. This protectionist behavior resulted in retaliatory actions escalating the issues and resulting in poorer economics for all. The sovereign leaders of Europe are publicly attempting to keep the markets open to free trade, which will facilitate the economies of all and support the struggling peripheral countries. The heads of the 17 Euro nations are working to keep the debt from imploding and destroying the European Union; with each positive announcement, stock markets around the world rise in anticipation of a lasting solution; privately, things may be different.

Relevant tickers: NYSE: DB, NYSE: STD, Nasdaq: ITUB, NYSE: UBS, NYSE: WBK, NYSE: LYG, NYSE: BCS, NYSE: CS, NYSE: AIB, NYSE: BLX, NYSE: NBG, NYSE: RY, NYSE: BFR, NYSE: IRE, NYSE: BMO, NYSE: CM, NYSE: ING, NYSE: C, NYSE: GREK, NYSE: VGK.

The Achilles Heel of Globalization

All entities work first on their own behalf, and then for the benefit of others. As much as a private citizen may want a strong European Union and the benefits of association, the fact remains that all will be pro-active in assuring the survivability of their own market, their own business, and their own personal welfare. The possibility of peripheral nations exiting the European Union and the complications that action would entail will eventually be the end of globalization.

Major manufacturers depend on their suppliers to provide the ingredients for production; an unreliable supplier or a supplier that is perceived to be possibly unreliable will be replaced. The natural tendency is to bring the supporting plants to the home country or use businesses within their own country, thus mitigating any disruptions. The industrial giants of Germany and France and general economics will cause the downfall of their weaker neighbors, unraveling the work of the central governments. Greece, Spain, Portugal, and Italy are at tremendous risk; the global banks, insurance companies, and pension funds that have bought their sovereign debt are at risk, and that jeopardizes the entire Globe. The five top banks in the US have Credit Default Swap (CDS) exposure on an even higher magnitude insuring the debt threatening the financial structure of our economy. Investors cannot assess the risk/reward ratio for existing investments; new investments in plants and equipment that stimulate jobs will be postponed until clarity returns. This hesitancy is natural and will cause a downward spiral in economic activity, ensuring a deep and long European recession; it will have a ripple effect across all borders.

Reduced trade with Europe cannot be beneficial to any of the economic zones of the world. The developing economies around the world owe their prosperity to selling goods to the developed countries. Resource rich countries such as Australia and Canada owe their prosperity to selling raw materials to the developing nations, and the US has plants and suppliers outside of the US - notably in China and the Pacific Rim countries. Everything and everyone is interconnected; if a disruption occurs, look for increased protectionism and tariffs along with rising nationalism. An economic slowdown will bring social unrest in the distressed markets, further compounding the tendency to repatriate factories and suppliers back into the home market and exasperating the situation. Globally, bankers, investors, and manufacturers that have made plans on expansion and continued growth with debt obligations will feel the slowdown first. Revenues will be reduced and will result in cost cutting; then employment reductions, further causing social unrest; then non-payment of loans; and finally in the failure of the project and/or total default. A contraction appears to be unavoidable, but there are prudent preparations to consider.

Income and debt level will be paramount to surviving this coming downturn. The savers of the world have been devastated by the historically low interest rates. Savings accounts, CD’s, Municipal Bonds, and US Treasuries, the haven for the retired and conservative investors, have been eviscerated. Pension funds and insurance companies requiring a yield component have been forced to search for much riskier investments to achieve just marginal returns to service distribution requirements. These conservative vehicles may have assumed much more risk than previously thought. Annuities, pensions, insurance policies may be at risk if there is a sovereign default in Europe, unknown to and far away from Main Street America. These are the vehicles in which the retired and elderly often depend along with Social Security; they may be at grave risk. Income enhancing securities such as MLP’s and high yield investment need to be reviewed and if prudent, positions hedged, reduced, or stop losses instituted. Long-term US Treasuries yield less than 3% currently, but provide a reliable income stream, and as the reserve currency of the world, the dollar should benefit from global disruptions.

The central banks of the world typically react to crisis by injecting liquidity, which will eventually, perhaps in 24-36 months, precipitate inflation, possibly double-digit inflation, which will threaten long-term bonds. The task will be to conserve one’s capital and exit the downturn intact and be able to re-position capital when the bottom has been reached. In a reduced revenue and yield environment, payments must be eliminated or reduced to coincide with reduced income in order to conserve capital. Typically a downturn will last 13-26 months, but this one may be longer.

“Underwater” or non-cash flowing Real Estate investments need to be liquidated, preferably via the “short sale” process. Foreclosure typically should be avoided, as the penalty period for obtaining mortgages is reduced using the short sale. If the timing is perfect, the waiting period could coincide with the downturn, and capital could be re-allocated to properties, as long-term inflation may follow the downturn as the liquidity injected into the economy searches for a home. Strategic real estate opportunities are still available, and more may become available as the downturn unfolds. Strategic properties are typically yielding a passive 5-6% return unleveraged to 8-9% cash on cash, with conservative lending. Currently, strategic real estate is a very favorable investment offering monthly income with the strong potential for revenue growth as well as a huge hedge against any future inflation.

There is a strong possibility of a global recession. A prudent investor needs to be aware and cautious as the traditional sources of income have been eliminated. Long-term treasuries are great in deflation and real estate is great in inflation; both generate the current income needed through a downturn. A combination of both may be advisable, check with your advisor and review the suitability for your portfolio.

Article is relevant to Deutsche Bank (NYSE: DB), Banco Santander (NYSE: STD), ITA (Nasdaq: ITUB), UBS (NYSE: UBS), Westpac Banking (NYSE: WBK), Lloyds Banking Group (NYSE: LYG), Barclays (NYSE: BCS), Credit Suisse (NYSE: CS), Allied Irish Bank (NYSE: AIB), Banco Latinamericano (NYSE: BLX), National Bank of Greece (NYSE: NBG), Royal Bank of Canada (NYSE: RY), BBVA Banco Frances (NYSE: BFR), The Bank of Ireland (NYSE: IRE), Bank of Montreal (NYSE: BMO), Canadian Imperial Bank of Commerce (NYSE: CM), ING Groep (NYSE: ING), Citigroup (NYSE: C), Global X FTSE Greece 20 ETF (NYSE: GREK) and Vanguard European ETF (NYSE: VGK).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

What Greece’s Bond Default Means

The International Swaps & Derivatives Association (ISDA) determined that Greece’s private debt restructuring effectively constituted a credit event, otherwise known as a default. This is not the kind of default that the world’s financiers had feared, though it is neither impotent with regard to repercussions for Greece.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Greece's Bond Default

Greece said some 85.8% of private debt holders of Greek-law bonds and about 20 billion euros of foreign-law debt agreed to take a “hair cut” on their holdings, accepting a promise from Greece for a much smaller payback on their loans. While any number (like 85.8%) should be questioned when it comes from the notorious and now desperate Greek government, we’ll humor them for the sake of global order. Greece enacted a retroactively contracted collective action clause based on the greater than two-thirds count of private debt-holders reportedly agreeing to its proposal. The coerced and clearly unconventional hair-cut was judged by the ISDA to be an effective default on the debt, and it was. This was no surprise, with ratings agencies Moody’s (NYSE: MCO), Standard & Poor’s (NYSE: MHP) and Fitch all effectively cutting Greece’s sovereign debt ratings to default levels over recent weeks.

The decision will trigger $3 billion worth of credit default swaps, with payouts depending on the value of Greek bonds on the open market. Some estimate on the “gray market” that the value of the still questionable private debt to be issued by Greece is worth about $0.21 on the dollar invested, so the holders of the swaps should receive some $0.79 per dollar. In this case, the details are less important than the general action, which effectively validates credit default swaps and projects a new view on the sovereign debt market.

While the securities actions represent a sort of default, they actually support the backing of the troika through the reduction of Greece’s overall debt burden. That said, the new debt Greece has offered its private debt holders remains costly, with an expected yield upward of 20%. That’s because Greece’s already questionable credibility has incurred a seminal change for the worse.

The nation’s crippling austerity is understood by the capital markets to be detrimental to economic growth. I have already written much about my disagreement with Europe’s cure for Greece. It’s like Greece is cutting off its leg rather than setting its broken bone. The reason is so that it can progress today and tomorrow, but the result remains a severely crippled Greece, hampered by its self inflicted injury. That’s not the way I would go about it, and I will answer how I would go about it in the very short-term through a series of reports.

On Friday, the Global X FTSE Greece 20 ETF (NYSE: GREK) gave back some of the gains made since Greece again secured troika support. The iShares S&P Europe 350 Index (NYSE: IEV) did the same. The stock action correctly reflects the uncertainty that remains regarding resolution to this crisis. The shares of the National Bank of Greece (NYSE: NBG) and Deutsche Bank (NYSE: DB) likewise reflected this uncertainty.

So today many are confused as to just what has occurred in Greece. Has it defaulted or not? The answer is yes, it has defaulted technically speaking. However, no, it has not yet failed in its desperate effort to stay afloat. What has happened is that the nation has forced a small number of people to endure some significant pain, those being the private bond holders. Of course, in a complete default scenario, those few wouldn’t do any better. Many believe Greece still will inevitably default on the entirety of its debt or choose a different path post elections, despite the efforts of the troika to ensure payback. If or when Greece does fail due to its (and Europe’s) poorly prescribed blood-letting solution, then I believe the euro-zone should fall apart as well.

The reason for this is of course contagion and something more. The events of last week should not weigh on the sovereign credits of Portugal or any of the other PIIGS beyond any short-term bump. Yet, the euro zone scheme remains a poorly devised half-solution for the region, designed to help it compete in the changing global marketplace. However, only when its national components sacrifice sovereignty will the fiscal union hold for the whole. That scenario will not likely develop, though, due to human attachment to culture, history and tribe. Thus, I say the failure of the euro zone is probable.

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Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

A Plea for Greece, Europe and Us All

In April 2010 I authored a concerned and prescient plea entitled, Greece News & My Disgust, within which I penned such wisdom as: "The current plan inspired by Greece's big brothers is not feasible. It will only open up black markets, torch the streets of Athens and lead more Greek wealth to leave the country." My prediction did not end there unfortunately, and I hope it is never fulfilled, because I said, "It will only usher in a radical government to replace the current."

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Relevant tickers: NYSE: DB, NYSE: STD, Nasdaq: ITUB, NYSE: UBS, NYSE: WBK, NYSE: LYG, NYSE: BCS, NYSE: CS, NYSE: AIB, NYSE: BLX, NYSE: NBG, NYSE: RY, NYSE: BFR, NYSE: IRE, NYSE: BMO, NYSE: CM, NYSE: ING, NYSE: C.

A Plea for Greece

The rating agencies are correct about Greece. The nation of my forefathers will default on its debts, despite all the latest efforts of the Greek government and the EU. It’s a shame that a bleak end seems inevitable for Greece, given the great sacrifices of the Greek people. Yet, it’s only inevitable because of the blind, bullheaded nature of thinking leading governments today, including in Greece and across Europe. I’ll be offering several creative ideas for legislators that should be digestible to most of them, yet will likely be ruled out because of their out-of-the-box nature, and due to the hard work that would be involved in implementing them. It’s much easier to sign on to pay and pension cuts, until the people will have no more of it, at which point pain is returned to sender, and perhaps earned due to disconnection and ignorance.

Fitch downgraded Greece last week to a level predicting default and S&P cut the Greek Republic this week to a mark indicating “select default”. The rating agency actions were despite the Greek government’s efforts to reduce the country’s debt burden and to cover its current principal and interest payments via troika payout. Greece took the strides necessary for it to assure it could survive through its latest deadlines, but that will not be enough in the end, because they are also undermining themselves with increasingly deeper austerity. Greece will effectively force its private debt holders to swallow a deep cut in the value of their loans through legislation. That move in itself is indicative of default, but remained an option for the already understood to be unreliable sovereign debtor.

When they naively promised not to issue any new austerity measures last year, government representatives Venizelos and Papademos showed a lack of economic foresight that matched poorly against the technocrat label of the latter. That said, judging by the poor excuses passing for economic plans prevailing across the spectrum of decision makers today, the two have plenty of company in poor judgment. Venizelos simply accepts the prevailing option offered up by the majority of intermingled and politically corrupted economic minds, but Papademos should know better.

Our leaders, globally, look to me increasingly like blind mice traversing through a field of big cats. Yet, I fear an overhaul of them would only usher in more ignorant minds with more dangerous courage. For some sad reason, the European actors in the Greek tragedy were surprised when they bumped into revised lower Greek economic activity which left debt levels short of agreed upon watermarks for aid delivery. In Mid-February, fourth quarter GDP fell short of expectations, cut to a level indicating contraction of 7.0% in Greece, down from 5.0% contraction in Q3.

A surprise to the blind rodents, the decimation of the Greek economy was of course exacerbated by austerity, which was something that I warned my followers would happen from day one. Perhaps the captains on the hollow hill will not overlook my advice planned for publishing over the weeks ahead, through which I will offer a series of lifesaving strategies for Greece, Europe and the global economy. I hope I will at least be able to communicate my ideas well enough for them to reach a few ears that might help make a difference. If not, perhaps I’ll come home to clean house.

Greece will certainly default, because the trajectory plotted by its pilots is flawed. Greek navigators from the famed island of my descent would see that what Europe and Greece have done is negligently plan a path that fails to compensate for all factors. It is as if they have plotted a critical course without compensating for the gremlin wind. Thus, we continue to find ourselves obscenely off-course. Now that Germany and a few other mini-members have promised their constituents that no new aid will be issued to Greece, the destination is determined and it is the bottom of the Mediterranean Sea. Though some see the latest promises as political, and so easily undone when the surprise of unmet fiscal goals and uncovered debt expenses resurface after elections across Europe and Greece this year. If that is the case, like Venizelos, they will open their mouths, shrug their shoulders and pass a new tranche of aid as fires fury at their feet.

Without creative thinking, including the ideas I will present shortly to whoever will listen (including the few important ears attendant to me in Greece and Greek-America) Greece will certainly default. With that, spreads will certainly widen for the Portuguese, Spanish, Italians and probably the rest of the previously considered to be untouchables. So whoever is in political office post elections might do better to reconsider political ploys to remain there, because a burning seat is worse than no seat. At the same time, the abandonment of Greece is not the optimal direction for Europe, and may even work more in favor of Greece when Europe fails anyway.

"What I suggest is to save Greece, but by helping Greece to save itself rather than to starve itself."

What I suggest is to save Greece, but by helping Greece to save itself rather than to starve itself. Since the global market is clearly intertwined, it is in the global interest to put the best minds to work developing creative and immediately value-adding strategies into effect. My first suggestion will be one that will require global consideration and approval. For the sake of the globe, I hope it is seriously considered and employed. Stay tuned…

The Default Disaster Missed by Markets

Unless creative ideas are embraced, Greece, Europe and probably the global economy will disintegrate, for related though separate reasons. Given my lack of confidence today in our global leadership, I would shy far from celebrating the stocks of Greece, Europe and even the United States to a lesser extent, if not the world. The argument is only solidified by the Iran trigger, which I’ll soon have more to say about. So the high flying Global X FTSE Greece 20 ETF (NYSE: GREK), up 13.7% since inception, though down 12% since my recent warning, should move even lower. Likewise, European shares, contaminated by where the EU’s terrible trajectory will take them, are likewise threatened. The iShares S&P Europe 350 Index ETF (NYSE: IEV) is up roughly 11% through February, and slightly higher since my sell call. This is because European investors could initially view the prospect of a Greek exit from the euro-zone as a positive, but I expect they will be wrong. The Vanguard European ETF (NYSE: VGK) is also up roughly 12% year-to-date, and a bit higher since the February 7th based call. Deutsche Bank (NYSE: DB) shares are up roughly 24% year-to-date on, dare I say, on a premature vision for European recovery. Reflecting capital flows and prospective hope, American financials like Citigroup (NYSE: C) shares are also up about 28% this year. Reiterating, I see these latest capital gains at risk, though at varying degrees and on perhaps different timing, based on the above detailed economic reasoning.

Article is relevant to Deutsche Bank (NYSE: DB), Banco Santander (NYSE: STD), ITA (Nasdaq: ITUB), UBS (NYSE: UBS), Westpac Banking (NYSE: WBK), Lloyds Banking Group (NYSE: LYG), Barclays (NYSE: BCS), Credit Suisse (NYSE: CS), Allied Irish Bank (NYSE: AIB), Banco Latinamericano (NYSE: BLX), National Bank of Greece (NYSE: NBG), Royal Bank of Canada (NYSE: RY), BBVA Banco Frances (NYSE: BFR), The Bank of Ireland (NYSE: IRE), Bank of Montreal (NYSE: BMO), Canadian Imperial Bank of Commerce (NYSE: CM), ING Groep (NYSE: ING), Citigroup (NYSE: C).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Bad Signs for Greece

The latest days’ news wire has been full of bad signs for Greece. While you have to infer a bit and see implications to developments in order to say so, it’s not too far a reach to see what could be stewing for Greece this winter is not a warming trend.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Relative tickers: NYSE: NBG, NYSE: OTE, NYSE: CCH, NYSE: TK, NYSE: NM, NYSE: NNA, NYSE: NMM, NYSE: TNP, NYSE: OSG, NYSE: ISH, NYSE: EXM, NYSE: SB, NYSE: SEA, NYSE: GNK, NYSE: DSX, NYSE: DAC, NYSE: TNP, NYSE: SFL, NYSE: NAT, NYSE: SSW, NYSE: GMR, NYSE: DHT, NYSE: MPX, Nasdaq: DRYS, Nasdaq: TOPS, Nasdaq: EGLE, Nasdaq: SINO, Nasdaq: PRGN, NYSE: KSP, Nasdaq: ESEA, Nasdaq: SBLK, Nasdaq: ONAV, Nasdaq: VLCCF, Nasdaq: TBSI, Nasdaq: GLNG, Nasdaq: XSEAX, Nasdaq: ACLI, NYSE: DB, Nasdaq: ITUB, NYSE: STD, NYSE: WBK, NYSE: UBS, NYSE: LYG, NYSE: BCS, NYSE: CS, NYSE: AIB, NYSE: BLX, NYSE: BAC, NYSE: C, NYSE: GS, NYSE: JPM, NYSE: MS, NYSE: EEA, Nasdaq: VEURX, NYSE: PEF, NYSE: EKH, NYSE: GUR, NYSE: EPV, NYSE: VEA, NYSE: DFE, NYSE: DEB, NYSE: IEV, NYSE: RNE, Nasdaq: SERAX, Nasdaq: SERBX, Nasdaq: FEUFX, Nasdaq: FIEUX, Nasdaq: IERAX, Nasdaq: PBEUX, Nasdaq: UEPIX, Nasdaq: PEUGX, Nasdaq: RYAEX

Greece May Yet Default

The latest omen came last week, when negotiations broke off between the Greek government and private bondholders. The effort is geared to liquidate about half of Greece’s private debt or 100 billion euros worth at the cost of the bondholders. It’s a lesser evil choice for the bondholders, which is only acceptable because it may help preserve the remaining portion of their investment in or loans to Greece.

This very important effort for Greece’s recovery is now also a critical step for its short-term survival. This is because it must be accomplished in order for Greece to qualify for its next tranche of aid funding from the international community. Representatives of the bondholders stated that they were stepping away in order to “pause for reflection.” The quandary is created because of math and capital markets, as the Greeks are really seeking more than the 50% cut discussed, because the effective market value of the bonds will likely drop immediately when the bond swap takes place. That said, if Greece recovers, the contract value should be approximated by market interest.

Clearly, if Greece defaults, bondholders will be left with empty hands, so Greece does have some negotiating power. However, the bondholders also know that Greece wants to avoid default and that they are needed for that process. It seems to me that whatever will satisfy the IMF is what should be adopted at this point.

Compounding the problem, Greece just reported that its budget deficit expanded in 2011 by 0.8%, to 21.64 billion euros. It was a bit better than the government’s revised forecast, but its details reflect fundamental obstacles to Greece’s economic and fiscal recovery. Despite all the government’s new taxes to lift revenues, and its expense reduction efforts, the budget still widened. That was because personal income tax collection actually softened and its ordinary budget revenue generation fell by 1.7%. Meanwhile, despite its cost cutting efforts, spending rose by 2.8% on the significantly increased debt service costs that plague the embattled nation. There should be no surprise here for readers of my column, as I’ve argued readily against the logic of harsh short-sighted austerity.

The budget deficit is supposed to have shrunk to a smaller portion of Greece’s gross domestic product. How you get there with GDP declining and the deficit rising defies my understanding. Maybe it’s European math. In any event, there’s very little here to reassure the troika nor the capital markets that Greece is making progress, and so the pressure remains.

It seems to me, given Standard & Poor’s sovereign debt slashing of much of the euro zone Friday, that it is hedging if not forecasting Greek default or some sort of unsavory result. Nine countries were downgraded in total, with the most damage done to France and Austria, which lost their top grades. Germany was spared, with its constitutional construct cited as a safety against its government’s potential for making poor decisions.

This coming week, the IMF resumes debt talks with Greece, sending a “mission team” to Athens as part of the review process. All the above discussed matters will be reviewed. Perhaps the presence of the IMF and renewed understanding of the criticality of “private sector involvement” will bring a conciliatory and cooperative tone and progress for Greece. However, the signs are bad.

Editor's Note: This article should interest investors in National Bank of Greece (NYSE: NBG), Hellenic Telecommunications (NYSE: OTE), Coca-Cola HBC (NYSE: CCH), Teekay Corp. (NYSE: TK), Navios Maritime Holdings (NYSE: NM), Navios Maritime Acquisition (NYSE: NNA), Navios Maritime Partners L.P. (NYSE: NMM), Tsakos Energy Navigation Ltd. (NYSE: TNP), Overseas Shipholding Group (NYSE: OSG), International Shipholding (NYSE: ISH), Excel Maritime Carriers (NYSE: EXM), Safe Bulkers (NYSE: SB), Claymore/Delta Global Shipping ETF (NYSE: SEA), Genco Shipping & Trading (NYSE: GNK), Diana Shipping (NYSE: DSX), Danaos (NYSE: DAC), Tsakos Energy Navigation (NYSE: TNP), Ship Finance Int'l (NYSE: SFL), Nordic American Tanker (NYSE: NAT), Seaspan (NYSE: SSW), General Maritime (NYSE: GMR), DHT Maritime (NYSE: DHT), Brunswick (NYSE: BC), Marine Products Corp. (NYSE: MPX), DryShips (Nasdaq: DRYS), Top Ships (Nasdaq: TOPS), Eagle Bulk Shipping (Nasdaq: EGLE), Sino-Global Shipping (Nasdaq: SINO), Paragon Shipping (Nasdaq: PRGN), K-SEA Transportation Partners (NYSE: KSP), Euroseas (Nasdaq: ESEA), Star Bulk Carriers (Nasdaq: SBLK), Omega Navigation (Nasdaq: ONAV), Knightsbridge Tankers Ltd. (Nasdaq: VLCCF), TBS Int'l (Nasdaq: TBSI), Golar LNG (Nasdaq: GLNG), Claymore/Delta Global Shipping (Nasdaq: XSEAX), American Commercial Lines (Nasdaq: ACLI), Deutsche Bank (NYSE: DB), ITA (Nasdaq: ITUB), Banco Santander (NYSE: STD), Westpac Banking (NYSE: WBK), UBS (NYSE: UBS), Lloyd’s Banking Group (NYSE: LYG), Barclay’s (NYSE: BCS), Credit Suisse (NYSE: CS), Allied Irish Banks (NYSE: AIB), Banco Latinamerican (NYSE: BLX), Bank of America (NYSE: BAC), Citigroup (NYSE: C), Goldman Sachs (NYSE: GS), JP Morgan (NYSE: JPM), Morgan Stanley (NYSE: MS), European Equity Fund (NYSE: EEA), Vanguard European Stock Index (Nasdaq: VEURX), Powershares FTSE RAFI Europe (NYSE: PEF), Europe 2001 (NYSE: EKH), S&P Emerging Europe (NYSE: GUR), Ultrashort MSCI Europe (NYSE: EPV), Vanguard Europe Pacific (NYSE: VEA), Wisdomtree Europe SmallCap (NYSE: DFE), Wisdom Tree Europe Total Div (NYSE: DEB), iShares S&P Europe 350 (NYSE: IEV), Morgan Stanley Eastern Europe (NYSE: RNE), DWS Europe Equity A (Nasdaq: SERAX), DWS Europe Equity B (Nasdaq: SERBX), Fidelity Europe (Nasdaq: FEUFX), Fidelity Europe (Nasdaq: FIEUX), ICON Europe A (Nasdaq: IERAX), Pioneer Europe Fund (Nasdaq: PBEUX), ProFunds Europe 30 (Nasdaq: UEPIX), Putnam Europe A (Nasdaq: PEUGX), Rydex Europe 1.25x (Nasdaq: RYAEX).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Greece has More Bargaining Leverage than its Politicians Understand

When former Greek Prime Minister Papandreou proposed a referendum for the Greek people to decide on whether to accept continued austerity and the “grand barter” agreed to by Greece’s new troika of slave masters, we learned something. As European bond yields went soaring from Spain across to Italy and even up to France, and as European kingpins arms went flailing up into the air in complaint, something became plainly clear. Greece has more bargaining leverage than its politicians understand.

Our founder, Markos Kaminis, earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Relative tickers: NYSE: NBG, NYSE: OTE, NYSE: CCH, NYSE: TK, NYSE: NM, NYSE: NNA, NYSE: NMM, NYSE: TNP, NYSE: OSG, NYSE: ISH, NYSE: EXM, NYSE: SB, NYSE: SEA, NYSE: GNK, NYSE: DSX, NYSE: DAC, NYSE: TNP, NYSE: SFL, NYSE: NAT, NYSE: SSW, NYSE: GMR, NYSE: DHT, NYSE: MPX, Nasdaq: DRYS, Nasdaq: TOPS, Nasdaq: EGLE, Nasdaq: SINO, Nasdaq: PRGN, NYSE: KSP, Nasdaq: ESEA, Nasdaq: SBLK, Nasdaq: ONAV, Nasdaq: VLCCF, Nasdaq: TBSI, Nasdaq: GLNG, Nasdaq: XSEAX, Nasdaq: ACLI, NYSE: DB, Nasdaq: ITUB, NYSE: STD, NYSE: WBK, NYSE: UBS, NYSE: LYG, NYSE: BCS, NYSE: CS, NYSE: AIB, NYSE: BLX, NYSE: BAC, NYSE: C, NYSE: GS, NYSE: JPM, NYSE: MS, NYSE: EEA, Nasdaq: VEURX, NYSE: PEF, NYSE: EKH, NYSE: GUR, NYSE: EPV, NYSE: VEA, NYSE: DFE, NYSE: DEB, NYSE: IEV, NYSE: RNE, Nasdaq: SERAX, Nasdaq: SERBX, Nasdaq: FEUFX, Nasdaq: FIEUX, Nasdaq: IERAX, Nasdaq: PBEUX, Nasdaq: UEPIX, Nasdaq: PEUGX, Nasdaq: RYAEX

Greece has Bargaining Leverage

What is unclear is whether he knew what he was doing or not, but the former Greek PM was ridiculed across the American popular press and across Europe for his ignorant, if not negligent action. Though, we questioned within these pages whether it might be pure genius or simply his soft heart at work behind the untimely and completely unexpected political posture. We also wondered if the respected legend of Greek politics might even be reading our column, considering that we had suggested Greece’s politicians ask Greeks what they wanted just days before Papandreou’s so-called shocking proposal.

How the move will work out for PASOK in February remains unclear, but I would assume the sacrifice of Papandreou will save some seats in Parliament. It even gives PASOK a chance at the premiership, something that was highly improbable otherwise. But more importantly, we should take note of the reaction of Greeks, which was one of introspection; of the markets, which was catastrophic; and of the look in the eyes of European leaders, which was one of fear.

Greeks suddenly had to approach the situation from the perspective of the nation on the whole, for turning down foreign aid and turning away from austerity measures would also lead to Greece’s disorderly exit from the euro zone. That’s not something that even the hardest hit of Greeks are sure would be in Greece’s best interests. The result of this might perhaps lead an unemployed Greek to a café to think deeply about the issue, rather than to start fires at the steps of the Parliament.

The markets were shocked, with debt yields across other at-issue European states soaring just days after all seemed finally set straight. The markets anticipated an even more serious loss of confidence in the European Union and in the euro zone. After all, if the EU could not cure Greece, due to the interests of Greeks, then perhaps the same result would follow in Spain and Italy, and if Italy, then why not also France. That reality set European politicians straight, so to speak, and allowed us to see clearly that the great homeland of our ancestors did not have to just accept whatever proposals the stern troika declared at us. Indeed, Europe has a stake in Greece, and in keeping it intact in the euro zone.

Therefore, Greek politicians have been grossly underestimating their bargaining position with the troika. The constricting austerity measures shoved down the throats of Greeks do not have to be so burdensome to our economic sustenance, nor to growth. We have the power to demand a longer time-line to meet debt level goals and repayment requirements. We can experiment with creative, growth encouraging policies, and ease austerity on our nation to correct its inherent flaws in a manner less disruptive to a way of living embedded in today’s society. Therefore, social upheaval could be mitigated, and Greece could find a way out of this mess with its integrity intact and the finances of its people in existence. I suggest Greek politicians reconsider, and realize that they hold a stronger hand than they’ve been told. They should reweigh the fact that there is a consistency of Greece’s goals with those of the troika, the greatest of which is to keep Greece within the euro zone.

Editor's Note: This article should interest investors in National Bank of Greece (NYSE: NBG), Hellenic Telecommunications (NYSE: OTE), Coca-Cola HBC (NYSE: CCH), Teekay Corp. (NYSE: TK), Navios Maritime Holdings (NYSE: NM), Navios Maritime Acquisition (NYSE: NNA), Navios Maritime Partners L.P. (NYSE: NMM), Tsakos Energy Navigation Ltd. (NYSE: TNP), Overseas Shipholding Group (NYSE: OSG), International Shipholding (NYSE: ISH), Excel Maritime Carriers (NYSE: EXM), Safe Bulkers (NYSE: SB), Claymore/Delta Global Shipping ETF (NYSE: SEA), Genco Shipping & Trading (NYSE: GNK), Diana Shipping (NYSE: DSX), Danaos (NYSE: DAC), Tsakos Energy Navigation (NYSE: TNP), Ship Finance Int'l (NYSE: SFL), Nordic American Tanker (NYSE: NAT), Seaspan (NYSE: SSW), General Maritime (NYSE: GMR), DHT Maritime (NYSE: DHT), Brunswick (NYSE: BC), Marine Products Corp. (NYSE: MPX), DryShips (Nasdaq: DRYS), Top Ships (Nasdaq: TOPS), Eagle Bulk Shipping (Nasdaq: EGLE), Sino-Global Shipping (Nasdaq: SINO), Paragon Shipping (Nasdaq: PRGN), K-SEA Transportation Partners (NYSE: KSP), Euroseas (Nasdaq: ESEA), Star Bulk Carriers (Nasdaq: SBLK), Omega Navigation (Nasdaq: ONAV), Knightsbridge Tankers Ltd. (Nasdaq: VLCCF), TBS Int'l (Nasdaq: TBSI), Golar LNG (Nasdaq: GLNG), Claymore/Delta Global Shipping (Nasdaq: XSEAX), American Commercial Lines (Nasdaq: ACLI), Deutsche Bank (NYSE: DB), ITA (Nasdaq: ITUB), Banco Santander (NYSE: STD), Westpac Banking (NYSE: WBK), UBS (NYSE: UBS), Lloyd’s Banking Group (NYSE: LYG), Barclay’s (NYSE: BCS), Credit Suisse (NYSE: CS), Allied Irish Banks (NYSE: AIB), Banco Latinamerican (NYSE: BLX), Bank of America (NYSE: BAC), Citigroup (NYSE: C), Goldman Sachs (NYSE: GS), JP Morgan (NYSE: JPM), Morgan Stanley (NYSE: MS), European Equity Fund (NYSE: EEA), Vanguard European Stock Index (Nasdaq: VEURX), Powershares FTSE RAFI Europe (NYSE: PEF), Europe 2001 (NYSE: EKH), S&P Emerging Europe (NYSE: GUR), Ultrashort MSCI Europe (NYSE: EPV), Vanguard Europe Pacific (NYSE: VEA), Wisdomtree Europe SmallCap (NYSE: DFE), Wisdom Tree Europe Total Div (NYSE: DEB), iShares S&P Europe 350 (NYSE: IEV), Morgan Stanley Eastern Europe (NYSE: RNE), DWS Europe Equity A (Nasdaq: SERAX), DWS Europe Equity B (Nasdaq: SERBX), Fidelity Europe (Nasdaq: FEUFX), Fidelity Europe (Nasdaq: FIEUX), ICON Europe A (Nasdaq: IERAX), Pioneer Europe Fund (Nasdaq: PBEUX), ProFunds Europe 30 (Nasdaq: UEPIX), Putnam Europe A (Nasdaq: PEUGX), Rydex Europe 1.25x (Nasdaq: RYAEX).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

European Shares Doomed by Politics

The market mood across Europe was decided before the sun rose Tuesday. Pressure is intensified around Greek political leaders, as the IMF and EU are refusing to continue aid flows to Greece without written pledges by both major parties. Political bias across euro zone members has a disjointed union treading water. Thus, European shares were doomed today and will be so moving forward without political will and finally a determined path.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Relevant tickers: NYSE: DB, NYSE: STD, Nasdaq: ITUB, NYSE: UBS, NYSE: WBK, NYSE: LYG, NYSE: BCS, NYSE: CS, NYSE: AIB, NYSE: BLX, NYSE: NBG, NYSE: RY, NYSE: BFR, NYSE: IRE, NYSE: BMO, NYSE: CM, NYSE: ING, NYSE: C.

European Shares Doomed

The troika is seeking written pledges from Greek political parties stating that they will pursue the austerity path agreed to through the February election and beyond. The entire situation has effectively placed Greece’s new Prime Minister Lucas Papademos on a stick for February roasting. The busy new PM met with the President of the Euro Group today, Jean-Claude Juncker, likely answering questions on this matter. The risk to U.S. investors here is of course of contagion across Europe, and the unclear result of a Greek default and falling out from the eurozone.

Forces are pressuring for the European Central Bank (ECB) to step up its bond purchase activity and for the EU to issue euro bonds. Such action would effectively force the significant investment of all European participants in regional recovery. They would have significantly increased vested interests, and so the Germans, with the farthest to fall from their state of independent grace oppose the idea. This division has raised doubts, at least here, about the EU’s ability to survive the crisis intact. And with global market entanglement, there would be no escaping a European downfall for U.S. investors. If the American banking risk outlined recently by Fitch, is not enough to get us, the deteriorating economies of Europe should weigh heavily enough.

European shares were down on the day as a result, with the Euro Stoxx 50 down 1.1%, the DAX off 1.2%, CAC 40 down 0.8% and the Athex Composite short 2.0%. European banking shares were off, with Deutsche Bank (NYSE: DB) down 0.9%, Banco Santander (NYSE: STD) off 2.5%, UBS (NYSE: UBS) down 0.9%, Credit Suisse (NYSE: CS) off 0.8%, Barclays (NYSE: BCS) off 3.0% and Lloyds (NYSE: LYG) down 5.1%.

Article is relevant to Deutsche Bank (NYSE: DB), Banco Santander (NYSE: STD), ITA (Nasdaq: ITUB), UBS (NYSE: UBS), Westpac Banking (NYSE: WBK), Lloyds Banking Group (NYSE: LYG), Barclays (NYSE: BCS), Credit Suisse (NYSE: CS), Allied Irish Bank (NYSE: AIB), Banco Latinamericano (NYSE: BLX), National Bank of Greece (NYSE: NBG), Royal Bank of Canada (NYSE: RY), BBVA Banco Frances (NYSE: BFR), The Bank of Ireland (NYSE: IRE), Bank of Montreal (NYSE: BMO), Canadian Imperial Bank of Commerce (NYSE: CM), ING Groep (NYSE: ING), Citigroup (NYSE: C).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Papademos on a Stick

It seems Greeks are coming to grips with the reality that their new leader, Lucas Papademos, may offer a different face to watch on television, but he comes with even stauncher support of the troika’s austerity medicine than the embattled George Papandreou. Indeed, the European Union’s man and once #2 at the European Central Bank (ECB) has openly stated that exit from the euro zone is not an option. Well, Greeks are learning that this means the austerity forced down their throats is also not clearing out. So, it seems, it may not be long before the popular support for Papademos turns out to actually be a sort of marinade.

Our founder Markos Kaminis earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Relative tickers: NYSE: NBG, NYSE: OTE, NYSE: CCH, NYSE: TK, NYSE: NM, NYSE: NNA, NYSE: NMM, NYSE: TNP, NYSE: OSG, NYSE: ISH, NYSE: EXM, NYSE: SB, NYSE: SEA, NYSE: GNK, NYSE: DSX, NYSE: DAC, NYSE: TNP, NYSE: SFL, NYSE: NAT, NYSE: SSW, NYSE: GMR, NYSE: DHT, NYSE: MPX, Nasdaq: DRYS, Nasdaq: TOPS, Nasdaq: EGLE, Nasdaq: SINO, Nasdaq: PRGN, NYSE: KSP, Nasdaq: ESEA, Nasdaq: SBLK, Nasdaq: ONAV, Nasdaq: VLCCF, Nasdaq: TBSI, Nasdaq: GLNG, Nasdaq: XSEAX, Nasdaq: ACLI, NYSE: DB, Nasdaq: ITUB, NYSE: STD, NYSE: WBK, NYSE: UBS, NYSE: LYG, NYSE: BCS, NYSE: CS, NYSE: AIB, NYSE: BLX, NYSE: BAC, NYSE: C, NYSE: GS, NYSE: JPM, NYSE: MS, NYSE: EEA, Nasdaq: VEURX, NYSE: PEF, NYSE: EKH, NYSE: GUR, NYSE: EPV, NYSE: VEA, NYSE: DFE, NYSE: DEB, NYSE: IEV, NYSE: RNE, Nasdaq: SERAX, Nasdaq: SERBX, Nasdaq: FEUFX, Nasdaq: FIEUX, Nasdaq: IERAX, Nasdaq: PBEUX, Nasdaq: UEPIX, Nasdaq: PEUGX, Nasdaq: RYAEX

A Political Sacrificial Lamb

Political jockeying ahead of a likely February election has Greece’s new Prime Minister, Lucas Papademos, being held out on a stick like a souvlaki cooking over the fires of Greek rioters, the IMF and Greece’s European brothers. Papandreou’s referendum concession was either a show of pure stupidity, unequivocal ethical heart or political genius. From the political perspective, Papandreou’s calling on the Greek people to decide whether to go forth with the European plan, and thus accept austerity and also ongoing euro zone membership, forced Greeks to take a second look at the situation and also at the PASOK Party. His stepping back has placed PASOK into a position that allows for potential reconciliation come election time.

New Democracy, not missing a beat and with its eye on February, has been publicly promoting an idea to ditch the digging austerity plan and to instead take a sort of American Republican approach to promote economic growth and trust in trickle-down economics; though the Greek version might look more like Chios mastic’s slow and painful ooze down a dry bark. The other, more radical parties are of course offering more radical solutions.

Needless to say, the political commotion has the troika terrified that tranches of capital dished out to Greece between now and February might end up wasted, sort of like how Zorbas spent his boss’ supply money on drink and women. So the IMF is refusing to dole out any more funds before a pledge is signed by the major political parties, if not all of them, to keep on the path outlined. That path, for Greeks, has been relayed as including the implementation of all already passed austerity measures, but the introduction of no new burden upon them.

So, it would seem Papademos is cooking like a souvlaki on a stick, and it would appear Greeks will have their kabob well done by February. The current popular support of him is thus near certain to turn to a lynching party, with the technocrat set to burn at the stake. Both New Democracy and PASOK are more than willing to step away now to allow the Greeks to pepper up Papademos, get their fill of him, and offer sweet dessert to them in February. But the sugar for that dessert must be acquired now from German and French patisseries.

The lesson long forgotten but to be learned anew is for governments across the globe. The lost wisdom is that the mismanagement of the people’s money results in uprising. The people will turn everything upside down and start all over again before they will bear the pain for the mistakes of faulty leadership.

Editor's Note: This article should interest investors in National Bank of Greece (NYSE: NBG), Hellenic Telecommunications (NYSE: OTE), Coca-Cola HBC (NYSE: CCH), Teekay Corp. (NYSE: TK), Navios Maritime Holdings (NYSE: NM), Navios Maritime Acquisition (NYSE: NNA), Navios Maritime Partners L.P. (NYSE: NMM), Tsakos Energy Navigation Ltd. (NYSE: TNP), Overseas Shipholding Group (NYSE: OSG), International Shipholding (NYSE: ISH), Excel Maritime Carriers (NYSE: EXM), Safe Bulkers (NYSE: SB), Claymore/Delta Global Shipping ETF (NYSE: SEA), Genco Shipping & Trading (NYSE: GNK), Diana Shipping (NYSE: DSX), Danaos (NYSE: DAC), Tsakos Energy Navigation (NYSE: TNP), Ship Finance Int'l (NYSE: SFL), Nordic American Tanker (NYSE: NAT), Seaspan (NYSE: SSW), General Maritime (NYSE: GMR), DHT Maritime (NYSE: DHT), Brunswick (NYSE: BC), Marine Products Corp. (NYSE: MPX), DryShips (Nasdaq: DRYS), Top Ships (Nasdaq: TOPS), Eagle Bulk Shipping (Nasdaq: EGLE), Sino-Global Shipping (Nasdaq: SINO), Paragon Shipping (Nasdaq: PRGN), K-SEA Transportation Partners (NYSE: KSP), Euroseas (Nasdaq: ESEA), Star Bulk Carriers (Nasdaq: SBLK), Omega Navigation (Nasdaq: ONAV), Knightsbridge Tankers Ltd. (Nasdaq: VLCCF), TBS Int'l (Nasdaq: TBSI), Golar LNG (Nasdaq: GLNG), Claymore/Delta Global Shipping (Nasdaq: XSEAX), American Commercial Lines (Nasdaq: ACLI), Deutsche Bank (NYSE: DB), ITA (Nasdaq: ITUB), Banco Santander (NYSE: STD), Westpac Banking (NYSE: WBK), UBS (NYSE: UBS), Lloyd’s Banking Group (NYSE: LYG), Barclay’s (NYSE: BCS), Credit Suisse (NYSE: CS), Allied Irish Banks (NYSE: AIB), Banco Latinamerican (NYSE: BLX), Bank of America (NYSE: BAC), Citigroup (NYSE: C), Goldman Sachs (NYSE: GS), JP Morgan (NYSE: JPM), Morgan Stanley (NYSE: MS), European Equity Fund (NYSE: EEA), Vanguard European Stock Index (Nasdaq: VEURX), Powershares FTSE RAFI Europe (NYSE: PEF), Europe 2001 (NYSE: EKH), S&P Emerging Europe (NYSE: GUR), Ultrashort MSCI Europe (NYSE: EPV), Vanguard Europe Pacific (NYSE: VEA), Wisdomtree Europe SmallCap (NYSE: DFE), Wisdom Tree Europe Total Div (NYSE: DEB), iShares S&P Europe 350 (NYSE: IEV), Morgan Stanley Eastern Europe (NYSE: RNE), DWS Europe Equity A (Nasdaq: SERAX), DWS Europe Equity B (Nasdaq: SERBX), Fidelity Europe (Nasdaq: FEUFX), Fidelity Europe (Nasdaq: FIEUX), ICON Europe A (Nasdaq: IERAX), Pioneer Europe Fund (Nasdaq: PBEUX), ProFunds Europe 30 (Nasdaq: UEPIX), Putnam Europe A (Nasdaq: PEUGX), Rydex Europe 1.25x (Nasdaq: RYAEX).

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Europe Comes Together in Desperation

In a matter of a week, the civilized world has witnessed leadership changes atop two democratic nations without election. The reasoning for this abrupt and somewhat unprecedented change in control was “necessity,” and in the place of the apparently inept leaders replaced, we find technocrats who seem perfect for the times.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Relevant tickers: NYSE: DB, NYSE: STD, Nasdaq: ITUB, NYSE: UBS, NYSE: WBK, NYSE: LYG, NYSE: BCS, NYSE: CS, NYSE: AIB, NYSE: BLX, NYSE: NBG, NYSE: RY, NYSE: BFR, NYSE: IRE, NYSE: BMO, NYSE: CM, NYSE: ING, NYSE: C.

Europe Comes Together in Desperation

Even though I myself insisted that former Greek Prime Minister Papandreou should query the Greek people before moving forward with the EU’s grand barter, I never in my wildest dreams expected that within hours of publishing, he would actually call for a referendum. After all, such a referendum would effectively decide whether Greece would remain in the eurozone, which was something the Greek government was for months fighting tooth and nail for. Despite the protests and fires that continued on the streets of Greece, it made little sense for the government to give up on a deal that effectively forgave half its debt. We posited that it must thus be a genius political move by George Papandreou, which would effectively give new life to the dead government walking and the PASOK party. After all, the Greek people, if properly educated on the vote, would surely not choose a route that would take them into default and out of the bubble of the civilized European society they have mostly treasured since Greece’s initiation.

I suppose one might say this change in Greece made possible what was previously less likely in Italy, the disposal of the embattled and embarrassing billionaire Prime Minister Silvio Berlusconi. Berlusconi had been shy about implementing the austerity measures his European brethren viewed necessary to prevent crisis contagion. The support of his people was worn thin, as his scandalous session as the Italian Prime Minister dragged on. So by putting off financial reinforcement, Berlusconi sought to keep Italians in cafes rather than on the streets of Rome burning his effigy.

Former European Commissioner for Italy, Mario Monti, the technocrat of choice for the job accepted the role over the weekend. Economic expert, Mario Draghi might have better matched with Greece’s turnover to Papademos, but he’s busy in his new post at the European Central Bank. The ouster of Berlusconi came at once and as a condition for the united passage of austerity. Berlusconi’s opponents in the senate determined to not vote, allowing the measures to pass; it then moved forward to the lower house for passage, and so austerity and Monti have been received in Italy.

The latest European tone has me anticipating Christine Lagarde or Jean-Claude Trichet could shortly move into the captain’s chair in France. Perhaps the final maneuver would be the German Finance Minister Wolfgang Schaeuble’s supplanting Angela Merkel in Germany. Could you ever imagine Ben Bernanke as your president without an election to support the choice? It’s all quite baffling, though the intensifying desperation of Europe is adding impetus if not frenzy to these decisions. These latest government changes are explained as necessary to quell political posturing and to allow for unified effort. These implanted leaders are only seen as temporary fixes. Opposing parties view the next election as their opportunity to restore control. However, in the end, the people will decide who will lead them, and they would seem unlikely to punish these new technocrats, who are economic experts seemingly best qualified for the times. Who knows, this may even be a step toward a truly unified Europe.

FYI: In 2009, Wall Street Greek presciently wrote of the coming turnover of European and global governments.

Article is relevant to Deutsche Bank (NYSE: DB), Banco Santander (NYSE: STD), ITA (Nasdaq: ITUB), UBS (NYSE: UBS), Westpac Banking (NYSE: WBK), Lloyds Banking Group (NYSE: LYG), Barclays (NYSE: BCS), Credit Suisse (NYSE: CS), Allied Irish Bank (NYSE: AIB), Banco Latinamericano (NYSE: BLX), National Bank of Greece (NYSE: NBG), Royal Bank of Canada (NYSE: RY), BBVA Banco Frances (NYSE: BFR), The Bank of Ireland (NYSE: IRE), Bank of Montreal (NYSE: BMO), Canadian Imperial Bank of Commerce (NYSE: CM), ING Groep (NYSE: ING), Citigroup (NYSE: C).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Greece Cuts Off Leg to Feed IMF Bear

Greece’s latest bit of austerity has been noted for its real estate tax tie, but it also includes the involuntary pay reduction of 30,000 public sector workers, and other cuts to pensions and wages. It could even lead to the early retirement or layoff of many at a time when family income has few sources. As a result, Greeks have fired up their torches for more protests, and the latest will close the country, as all transportation will be shut down (except for buses shuttling in protesters). Similarly, there is a great disconnect between austerity and economic restoral, and the plans of peripheral politicians and the wishes of Greeks on the streets of Athens.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Greece Cuts Off Leg to Feed IMF Bear

When Greece embarked on this EU/IMF prescribed austerity, I immediately objected, and said it was a serious mistake that totally ignored the lessons of the Great Depression. Now, as Greece nears bankruptcy in a state of hobbled morale and with a busted bank book, I suppose some in government wish they had considered other options. Greece needed to also think about sustaining GDP along with the implementation of digestible systemic adjustments, not tax hikes, job cuts and creative missteps like the 25% tax on alcohol. How Greek politicians could not foresee that measures like these would fail is beyond me, but the failings of politicians are a universal norm these days. At least, though, the Greeks should have seen that taxes on alcohol and tobacco would lead to a black market boom. This oversight clearly illustrates how disconnected many Greek decision makers are from their countrymen on the street level.

Ronald Reagan is often considered an engineer and example of capitalistic perseverance and triumph through difficult times. He would not have given austerity even a second thought today. While he would have closed tax loopholes and addressed tax evasion, he would also have cut taxes and provided more incentive for business development, including in this case foreign driven. And while faced with pressure to oblige, he would have united Europe, in spirit and in government, so that the euro could withstand trouble, at least within its smaller constituents like Greece.

The reason this issue is so hard to solve is because of the disunity of this so-called European Union. Forcing swift acting austerity down the throats of recession burdened Greeks is the result of the impatience of Europe’s constituents. The EU/IMF required fast payback will be what finally does them in though. A true union would look toward a feasible and phased in reorganization that would not push Greece into depression, and its trading partners with it. But without one government, European leaders must return home to ask for the permission of their own angry taxpayers, and while political rivals stir up fodder for firestorm. Thus, the euro and the European Union were premature in devise and predestined to fail.

Another problem working against crisis mitigation today is the process the IMF and EU are so married to. Their public reviews of Greek progress have best served market speculators, and mostly resulted in higher borrowing costs for nations on the brink, but not yet fallen off the cliff. For as long as these firefighters approach the inferno in this manner, we all will get burnt.

Over the next several weeks, I will offer creative solutions to the Greek government and the European PIIGS-pen. But these ideas will only prove more useful than criticism, based on the ratio of readership, from decision-makers to revolutionaries.

This article should interest investors in National Bank of Greece (NYSE: NBG), Hellenic Telecommunications (NYSE: OTE), Coca-Cola HBC (NYSE: CCH), Teekay Corp. (NYSE: TK), Navios Maritime Holdings (NYSE: NM), Navios Maritime Acquisition (NYSE: NNA), Navios Maritime Partners L.P. (NYSE: NMM), Tsakos Energy Navigation Ltd. (NYSE: TNP), Overseas Shipholding Group (NYSE: OSG), International Shipholding (NYSE: ISH), Excel Maritime Carriers (NYSE: EXM), Safe Bulkers (NYSE: SB), Claymore/Delta Global Shipping ETF (NYSE: SEA), Genco Shipping & Trading (NYSE: GNK), Diana Shipping (NYSE: DSX), Danaos (NYSE: DAC), Tsakos Energy Navigation (NYSE: TNP), Ship Finance Int'l (NYSE: SFL), Nordic American Tanker (NYSE: NAT), Seaspan (NYSE: SSW), General Maritime (NYSE: GMR), DHT Maritime (NYSE: DHT), Brunswick (NYSE: BC), Marine Products Corp. (NYSE: MPX), DryShips (Nasdaq: DRYS), Top Ships (Nasdaq: TOPS), Eagle Bulk Shipping (Nasdaq: EGLE), Sino-Global Shipping (Nasdaq: SINO), Paragon Shipping (Nasdaq: PRGN), K-SEA Transportation Partners (NYSE: KSP), Euroseas (Nasdaq: ESEA), Star Bulk Carriers (Nasdaq: SBLK), Omega Navigation (Nasdaq: ONAV), Knightsbridge Tankers Ltd. (Nasdaq: VLCCF), TBS Int'l (Nasdaq: TBSI), Golar LNG (Nasdaq: GLNG), Claymore/Delta Global Shipping (Nasdaq: XSEAX), American Commercial Lines (Nasdaq: ACLI), Deutsche Bank (NYSE: DB), ITA (Nasdaq: ITUB), Banco Santander (NYSE: STD), Westpac Banking (NYSE: WBK), UBS (NYSE: UBS), Lloyd’s Banking Group (NYSE: LYG), Barclay’s (NYSE: BCS), Credit Suisse (NYSE: CS), Allied Irish Banks (NYSE: AIB), Banco Latinamerican (NYSE: BLX), Bank of America (NYSE: BAC), Citigroup (NYSE: C), Goldman Sachs (NYSE: GS), JP Morgan (NYSE: JPM), Morgan Stanley (NYSE: MS), European Equity Fund (NYSE: EEA), Vanguard European Stock Index (Nasdaq: VEURX), Powershares FTSE RAFI Europe (NYSE: PEF), Europe 2001 (NYSE: EKH), S&P Emerging Europe (NYSE: GUR), Ultrashort MSCI Europe (NYSE: EPV), Vanguard Europe Pacific (NYSE: VEA), Wisdomtree Europe SmallCap (NYSE: DFE), Wisdom Tree Europe Total Div (NYSE: DEB), iShares S&P Europe 350 (NYSE: IEV), Morgan Stanley Eastern Europe (NYSE: RNE), DWS Europe Equity A (Nasdaq: SERAX), DWS Europe Equity B (Nasdaq: SERBX), Fidelity Europe (Nasdaq: FEUFX), Fidelity Europe (Nasdaq: FIEUX), ICON Europe A (Nasdaq: IERAX), Pioneer Europe Fund (Nasdaq: PBEUX), ProFunds Europe 30 (Nasdaq: UEPIX), Putnam Europe A (Nasdaq: PEUGX), Rydex Europe 1.25x (Nasdaq: RYAEX).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Papandreou Must Change Greece’s Economic Course

The day’s focus is once again on Europe, where it is looking more and more like austerity is a useless effort for troubled Greece. On Monday, Standard & Poor’s (NYSE: MHP) cut Italy’s credit rating, and despite Moody’s (NYSE: MCO) and Fitch’s affirmation of ratings, global markets fell into tailspin. Europe is a disheveled beast today as a result, and because of lost confidence in Greece’s ability to survive financial ruin.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

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Papandreou Must Change Greece’s Economic Course

The Greek Prime Minister faces pressure to tighten the noose around the neck of his electorate. Unfortunately for Prime Minister Papandreou, his rivals are finding opportunity countering Greece’s failing efforts.

The government is moving ahead now with developing plans to sell off state held assets, including stakes in Telecom stalwart O.T.E. (NYSE: OTE), state-owned Hellenic Postbank, and Greece’s two main ports of Piraeus and Thessaloniki. The New Democracy Party is also pushing for the sale of Greece largest electricity producer, P.P.C. Such privatization actions have been proven wise moves through their initiation in the United States and follow through in the United Kingdom and Europe. The question is, what kind of price will a desperate Greece get now? It must not act like the desperate seller, and be patient for hungry buyers to emerge if it wants to best serve its citizenry and my spiritual brothers. In the end, more efficient business operations will emerge and likely grow in the place of currently fat and fraudulent operators.

New Democracy is taking an important strategic position now in opposition of the cornered Papandreou’s socialist government (PASOK Party), and yours truly happens to agree with the position, despite my favoritism of Papandreou, the man and pseudo-New Yorker. The fact is that I’ve argued against austerity since its start, and clearly stated it matched the American mistake of the Great Depression.

However, when I said Greece would do better to raise taxes across tourism, thus forcing visiting foreigners to my paradise-like spiritual homeland to help front Greece’s bill, detractors said it was a mistake. They said it would kill tourism, to which I correctly forecasted that riots and crime would do more to kill Greece’s tourism industry than well-spread taxes across flights, cruises, hotels and taxi rides. The Greek people would have appreciated its government’s efforts to guard them from financial distress. Instead it told them, my dear people, you take the poison for the sake of our heritage. Greeks responded with angry dissatisfaction.

Greeks have plenty of reason to mistrust their government, with scandal and corruption as common in Greece as it is across the globe. Who would pay taxes to a lost cause, or more taxes to a futile escape effort? Thus, it has done well to target corruption, but perhaps it was too late to establish credibility.

The Greek government currently too closely resembles the panicked Bush-government and its pressured quick decisions. You’ll recall Bush’s mailing of $300 checks to every American, a useless waste of important funds and an illustration of the government’s poor assessment of imminent economic catastrophe. We sadly remember the butchered bailout legislations that sent billions into nebulous necromancy, or better stated, into Wall Street executive bonus packages.

Greece cannot raise taxes forever; rather, it can until its Parliament building burns to the ground. The torch that would start that fire is already burning, and New Democracy can sense it. At least though, for Greeks, it is New Democracy gaining attention for seeking change rather than the Communists or Isolationists or Nationalists. Hopefully Greeks will not remember that it was under New Democracy that the nation’s financial position was mishandled and misreported.

The last thing I want to see in Greece is radical leadership gaining control because of the failed establishment. This threat extends throughout Europe, the Middle East and the globe, and is not negligible. This is how Hitler gained power! Who else would have listened to him but the desperate? So beware and be wise Europeans and Middle Easterners.

I disagree with the position of my better-schooled acquaintance, and I hope friend, Economist Charles Calomiris. I disagree with the view that Greece must default, or has no better option. I also would rather not see Greece dislocated from the euro zone or the umbrella of the E.U. Papandreou must change course, but there are many roads to choose from, each of which looks perilous from here. I’ve supported two of them here, selling assets and taxing the use of them by foreigners.

I remain available to Greece should she call, because I bleed for her.



Editor's Note: This article should interest investors in National Bank of Greece (NYSE: NBG), Hellenic Telecommunications (NYSE: OTE), Coca-Cola HBC (NYSE: CCH), Teekay Corp. (NYSE: TK), Navios Maritime Holdings (NYSE: NM), Navios Maritime Acquisition (NYSE: NNA), Navios Maritime Partners L.P. (NYSE: NMM), Tsakos Energy Navigation Ltd. (NYSE: TNP), Overseas Shipholding Group (NYSE: OSG), International Shipholding (NYSE: ISH), Excel Maritime Carriers (NYSE: EXM), Safe Bulkers (NYSE: SB), Claymore/Delta Global Shipping ETF (NYSE: SEA), Genco Shipping & Trading (NYSE: GNK), Diana Shipping (NYSE: DSX), Danaos (NYSE: DAC), Tsakos Energy Navigation (NYSE: TNP), Ship Finance Int'l (NYSE: SFL), Nordic American Tanker (NYSE: NAT), Seaspan (NYSE: SSW), General Maritime (NYSE: GMR), DHT Maritime (NYSE: DHT), Brunswick (NYSE: BC), Marine Products Corp. (NYSE: MPX), DryShips (Nasdaq: DRYS), Top Ships (Nasdaq: TOPS), Eagle Bulk Shipping (Nasdaq: EGLE), Sino-Global Shipping (Nasdaq: SINO), Paragon Shipping (Nasdaq: PRGN), K-SEA Transportation Partners (NYSE: KSP), Euroseas (Nasdaq: ESEA), Star Bulk Carriers (Nasdaq: SBLK), Omega Navigation (Nasdaq: ONAV), Knightsbridge Tankers Ltd. (Nasdaq: VLCCF), TBS Int'l (Nasdaq: TBSI), Golar LNG (Nasdaq: GLNG), Claymore/Delta Global Shipping (Nasdaq: XSEAX), American Commercial Lines (Nasdaq: ACLI), Deutsche Bank (NYSE: DB), ITA (Nasdaq: ITUB), Banco Santander (NYSE: STD), Westpac Banking (NYSE: WBK), UBS (NYSE: UBS), Lloyd’s Banking Group (NYSE: LYG), Barclay’s (NYSE: BCS), Credit Suisse (NYSE: CS), Allied Irish Banks (NYSE: AIB), Banco Latinamerican (NYSE: BLX), Bank of America (NYSE: BAC), Citigroup (NYSE: C), Goldman Sachs (NYSE: GS), JP Morgan (NYSE: JPM), Morgan Stanley (NYSE: MS), European Equity Fund (NYSE: EEA), Vanguard European Stock Index (Nasdaq: VEURX), Powershares FTSE RAFI Europe (NYSE: PEF), Europe 2001 (NYSE: EKH), S&P Emerging Europe (NYSE: GUR), Ultrashort MSCI Europe (NYSE: EPV), Vanguard Europe Pacific (NYSE: VEA), Wisdomtree Europe SmallCap (NYSE: DFE), Wisdom Tree Europe Total Div (NYSE: DEB), iShares S&P Europe 350 (NYSE: IEV), Morgan Stanley Eastern Europe (NYSE: RNE), DWS Europe Equity A (Nasdaq: SERAX), DWS Europe Equity B (Nasdaq: SERBX), Fidelity Europe (Nasdaq: FEUFX), Fidelity Europe (Nasdaq: FIEUX), ICON Europe A (Nasdaq: IERAX), Pioneer Europe Fund (Nasdaq: PBEUX), ProFunds Europe 30 (Nasdaq: UEPIX), Putnam Europe A (Nasdaq: PEUGX), Rydex Europe 1.25x (Nasdaq: RYAEX).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.