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More on Greece - DEFAULT LIKELY

Please see extract from Bloomberg below- If this scenario plays out, the stock market might be in for a bumpy ride..

Best Trade Idea - PAY OFF SOME OF YOUR OWN DEBT IF YOU HAVE

Fitch Cuts Greece to B+, Says Maturity Extension Is Default (2) 2011-05-20 16:16:35.390 GMT

     (Updates Lagarde quotes in sixth paragraph, swaps in

seventh.)

By Maria Petrakis

     May 20 (Bloomberg) -- Greece’s credit rating was cut three levels by Fitch Ratings, which said that even a voluntary extension of its bond maturities being studied by European Union policy makers would be considered a default.

     Fitch cut its rating to B+, four levels below investment grade, from BB+ and said that the country could face a further reduction in its creditworthiness. The yield on Greek 10-year bonds rose 57 basis points to 16.6 percent, more than twice the level of a year ago when Greece accepted an EU-led bailout.

     “The rating downgrade reflects the scale of the challenge facing Greece in implementing a radical fiscal and structural reform program necessary to secure solvency of the state and the foundations for sustained economic recovery, Fitch said in an e- mailed statement.

     More than a year after Greece received a 110 billion-euro

($156 billion) aid package that aimed to stem the spread of the region’s sovereign crisis, the nation’s debt is rising, borrowing costs are near records and European policy makers are considering additional aid. Ireland and Portugal followed Greece in seeking bailouts as investors shunned the debt of the region’s other high-deficit nations.

     Greece’s two-year bonds yield more than 25 percent, indicating investors are betting Greece won’t be able to return to markets as planned under the bailout next year, when it’s due to sell about 27 billion euros of bonds.

                               

                          Default Risk

     “Greece risks a sovereign default and finance ministers have expressed strong doubts about the sluggish progress,” in controlling its public finances, French Finance Minister Christine Lagarde said in an interview published today in Austrian newspaper Der Standard.

     The cost of insuring Greece debt against default rose 13 basis points to 1,335, down from a record 1,375 on May 9.

     “The B+ rating incorporates Fitch’s expectation that substantial new money will be provided to Greece by the EU and IMF and that Greek sovereign bonds will not be subject to a ‘soft restructuring’ or ‘re-profiling’ that would trigger a ’credit event’ and default rating,” Fitch said.

Greek Ruins

Greek stocks just hit a new 14-year low today, as Greek bond yields remain near all-time highs. The Greek 10-year bond now yields more than 15%. That's a great yield...if you believe you would actually receive it.

Warren Buffett’s Berkshire Hathaway Inc. (BRK/A) reported a stake in MasterCard Inc. (MA),

Warren Buffett’s Berkshire Hathaway Inc. (BRK/A) reported a stake in MasterCard Inc. (MA), the second-biggest payments network, after the billionaire chairman hired money manager Todd Combs to handle part of his company’s portfolio.

Buffett’s firm owned 216,000 shares of MasterCard on March 31, Omaha, Nebraska-based Berkshire said in a regulatory filing listing its U.S. stock portfolio. The stake is valued at $60.3 million, based on the closing price on the New York Stock Exchange yesterday, when the filing was released.

Our Idea is still Western Union which is another stock that Todd Combs like...

Glencore creates wealth - - Commodities alive and well

Glencore Executives’ $23 Billion Mother Lode Beats Wall Street

2011-05-19 16:33:13.352 GMT

By Christine Harper and Zijing Wu

     May 19 (Bloomberg) -- Glencore International Plc’s initial public offering values the stakes of the company’s top six executives at $23 billion, surpassing wealth generated by some of Wall Street’s most storied firms.

     In contrast to Glencore, a commodities trader based in Baar, Switzerland, the eight senior executives at Goldman Sachs Group Inc. held stakes worth a combined $1.26 billion at the time of that firm’s IPO in 1999, while Blackstone Group LP’s top seven executives held $11.9 billion worth of stock after selling shares worth $2.8 billion in their 2007 IPO, according to the New York-based firms’ prospectuses.

     Glencore sold 1.14 billion shares, or about 16.4 percent of the company after the IPO, to the public and so-called cornerstone investors including Abu Dhabi’s Aabar Investments PJSC and BlackRock Inc. The company has an option to sell an additional 116.9 million shares to meet demand.