Thursday, February 9, 2012
Greek debt not sustainable with 70 percent haircut
(Reuters) - Greece will likely not achieve sustainable debt levels with a 70 percent reduction in the value of bonds held by its private creditors, Standard & Poor's warned on Wednesday, putting pressure on the official sector also to take losses.
Private-sector bond holders currently account for only a small part of Greece's creditors since most of the country's debt has migrated to the hands of the European Central Bank and other official institutions, S&P analyst Frank Gill said in a webcast with clients.
"In our original estimate, which was made two years ago, at that time debt-to-GDP would have been restored to a far more sustainable level," Gill said.
"But because only a small subcomponent of investors are actually taking the haircut and the official sector is not, or only partially, then the reduction... is probably not sufficient debt relief to make debt sustainable given the outlook for GDP itself."
S&P, which currently rates Greece at CC with a negative outlook, said it intends to downgrade the country to "selective default," but just temporarily, while the government concludes its debt swap.
Shortly after that, Greece's ratings should be upgraded to a "still low level," which will depend on whether the country's public debt is reduced to a sustainable position, Gill said.
Two euro zone monetary policy sources said on Wednesday that ECB policymakers are still divided on what contribution the bank could make to a restructuring of Greece's sovereign debt.
ITALY, FRANCE DETERIORATING
S&P also warned that credit conditions continue to deteriorate in Italy and France after it downgraded both countries last month, despite extraordinary steps by the ECB to boost liquidity in the market.
"We still see credit conditions deteriorating in places like Italy, places like France, and that is going to weaken domestic demand," Gill said. "That makes it very difficult to project what the fiscal outcome is going to be this year in those countries."
Wednesday, February 8, 2012
Air Force Removes ‘God’ From Logo
A Virginia lawmaker is calling on the Air Force to reverse a decision to remove a Latin reference to “God” from a logo after an atheist group complained.
Rep. Randy Forbes, (R-VA), said the Air Force removed the logo several weeks ago from the Rapid Capabilities Office. The patch included a line written in Latin that read, “Doing God’s Work with Other People’s Money.”
But after the Military Association of Atheists and Freethinkers complained, Forbes said the line was rewritten in Latin to read, “Doing Miracles with Other People’s Money.”
Forbes, along with a bi-partisan group of 35 lawmakers, sent a letter to Air Force Secretary Michael Donley and Air Force Chief of Staff Norton Schwartz expressing concern over the decision to remove a non-religious reference to God.
“It is most egregious,” Forbes told Fox News. “The Air Force is taking the tone that you can’t even use the word ‘God.’”
Forbes said his office contacted the Air Force and officials there confirmed that the logo had been changed after the atheist group complained.
A spokesman for the Air Force told Fox News they had received the letter and would investigate the claims.
Forbes said the removal of “God” is a “bridge too far in terms of the rights of men and women who serve in our services and their ability to express their faith.”
“But the significance of this is what the Air Force is saying with this move – that the word ‘God’ – whether it has any reference to faith or not, can’t be used in the Air Force,” Forbes said.
He said the incident is one of several in recent months that have caused him to wonder if the military is cleansing itself of religious references.
“It’s a very dangerous course to take,” he said.
“I am concerned that the RCO capitulated to pressure from an outside group that consistently seeks to remove references to God and faith in our military,” he said. ‘The RCO’s action to modify the logo sets a dangerous precedent that all references to God, regardless of context, must be removed from the military.”
Israel embassies preparing for Iran strike?
Preparing for Iran strike? Foreign embassies in Israel have recently started to formulate contingency plans to evacuate their citizens from the Jewish State in case of a missile attack on Israel.
Senior officials in Jerusalem said that several diplomatic missions have shown great interest in preparing for various emergency situations, Yedioth Ahronoth reported Tuesday.
In the framework of the preparations for possible fallout in case of an Israeli strike on Iran, foreign diplomats stationed in Israel requested that the Foreign Ministry equip them and their family members with gas masks.
Meanwhile, the Foreign Ministry has provided foreign embassies in Israel with a list of public bomb shelters across the country, as well as an instructional pamphlet in English produced by the IDFHome Front Command.
Diplomatic officials deployed in Israel are particularly concerned about the possibility of a missile offensive on the Jewish State that would prompt thousands of Israeli citizens with foreign passports to seek evacuation from country.
A senior European diplomat said that in such case, the European Union does not have the means to undertake a massive evacuation operation within a short period of time.
Meanwhile, the Home Front Command is preparing to launch a two-day drill in the southern Israeli city of Ashkelon on Wednesday. IDF forces, firefighters, police officers and Magen David Adom emergency services will be taking part in the exercise.
Army officials said that heavy military and emergency vehicle traffic is expected in the city's Shimshon neighborhood during the day. The drill marks the latest in a series of Home Front exercises held in Israel in recent months.
The Air Force will also be holding major maneuvers Wednesday, in the northern Israel Galilee region.
Ynet
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