Ministers of the eurozone Greek return assistance payment, Shift Focus to the Second rescue plan - Bloomberg

Jean-Claude Juncker, head of the Eurogroup and the Luxembourg, Prime Minister. Photographer: Jock Fistick/Bloomberg.

The euro area has approved its part of an assistance payment of 12 billion dollars-euro ($17.4 billion) for the Greece and is committed to complete the work in the coming weeks a second rescue plan for the nation to short of cash to prevent a default.

Ministers of finance agreed to pay 8.7 billion euros of loans within the framework of bailing out of 110 billion - euros last year before 15 July, rewarding the Greek Prime Minister George Papandreou to push a plan of additional austerity by Parliament. The Fund International Monetary is due to provide the rest of the tranche assistance from July, the fifth under the package of 2010.

Now, the spotlight turned to a second rescue plan to banks and insurers plan to contribute German requests for relief. Investors and Governments in the euro area will provide 70% of the new aid which can total as much as 85 billion euros, with the IMF in providing the rest, Thomas Wieser, an official of the Austrian Finance Ministry, said on June 30.

"The Greek authorities provided a strong commitment to adhere to the agreed budgetary adjustment path," Finance leaders eurozone 17 said in a statement by email yesterday after a conference call that was joined by the acting head of the IMF, John Lipsky and Central Bank President, Jean-Claude Trichet. "The precise terms and the extent of the participation of the private sector and the additional funds from official sources will be determined in the coming weeks."

The obligations of the nations most indebted of Europe has rebounded this happened a week after the victory of Papandreou in Parliament facilitated concerns about imminent Greek default. Stocks and the euro has increased. The obligations of the Greece advanced for a second week and Italian titles in 10 years for the first week in three, while the Spanish performance of 10 years has decreased by more than five months. The Greek performance of two years has fallen more than 150 basis points.

The euro has increased by 2.4% against the dollar, its first weekly gain in four weeks and European Stoxx 600 Index snap a string of eight consecutive weeks of losses. The MSCI World Index posted its biggest weekly advance in nearly two years.

Europe is seeking to draw a line under a debt crisis that the Greece stung more than a year and threatens monetary union for 12 years. The Ireland and the Portugal requested emergency assistance for a total of 146 billion euros after the initial rescue of the Greece in May 2010, and the investors concerned about the vulnerability of some larger euro, including the Spain nations.

The political climate in Europe has complicated the task, with a group led by German of rich countries reluctant to offer more support and opposition to the austerity of Mount Greece. Papandreou stirred his Cabinet last month to repel a rebellion by his Socialist Party and fact face demonstrations and strikes this Greek legislators last week approved a package of 78 billion euro of increases in taxes and asset sales.

The Finance Minister Greek Evangelos Venizelos said the decision by its counterparts in the euro area to release the fifth loan payment strengthens the international credibility of the country.

"What is now critical is the implementation rapid and effective decisions of Parliament," Venizelos said in a statement by email of the Ministry of finance, based in Athens.

The IMF noted a readiness to approve its share of 3.3 billion euro in the next instalment of aid for the Greece. "We look forward to continuing to work with the Greek authorities and the European partners in support of the economic program that will help to restore the financial viability," the Washington - based fund said in a news release by e-mail.

The European Union and the IMF pushed Papandreou in action with a June report that said changes of Greek economic policy is linked came at a "standstill." The lack of progress contributed to derailing the country plan to return to the bond markets next year and led work on a second package of aid.

In may, the EU has warned that the Greece had shifted its course to reduce its budget deficit to 7.4 per cent of the gross domestic product this year from 10.5 per cent of GDP in 2010, saying: failure of this year would be 9.5%. The debt of the countries will be increased to 158% of GDP this year from 143% in 2010, according to EU forecasts of.

Papandreou to the Parliament legislative victory facilitated concerns a Greek default, European Governments reported progress in negotiations with investors in their contribution to a new package of aid through a reversal of the Greek debt.

The heads of finance in the euro area, "Consultations with the creditors of the Greece are in progress to define the modalities of voluntary participation from the private sector to achieve a substantial reduction in year funding needs the Greece, while avoiding the selective default," said the statement. The Eurogroup so-called, directed by Jean-Claude Juncker of the Luxembourg, is due at the next meeting on 11 July in Brussels.

The German and French banks, the largest Greek debt holders, intensified its discussions on a reversal that officials say should be as much as 30 billion euros. Deutsche Bank AG CEO Josef Ackermann predicted on 29 June that financial companies would contribute to help avoid a "crisis."

Under the French proposal, bond would agree with more than 70% of their debt coming due in mid-2014 in new Greek bonds for 30 years, with the main on new debt guaranteed through the Greece invest in bonds coupon of similar maturity. As a second option, investors would drive more than 90% of their debt in five years of the new obligations without warranty.

Member of the Board of Directors of ECB Christian Noyer, said the French proposal is "very well" and can make more credible Greece rescue program. It is in the interest of all financial institutions who could participate in a plan to support Greek, Christian Noyer told newspaper based in Athens Proto Thema in an interview to be published today.

To contact the reporters on this story: Jonathan Stearns in Brussels at the jstearns2@bloomberg.net; James g. Neuger in Brussels at the jneuger@bloomberg.net.

To contact the editor responsible for this story: James Hertling at the jhertling@bloomberg.net

Return of us equity investors may be too late (AP)

Erreur lors de la désérialisation du corps du message de réponse pour l’opération « Translate ». Dépassement du quota maximal pour la longueur du contenu de chaîne (8192) lors de la lecture de données XML. Ce quota peut être augmenté en modifiant la propriété MaxStringContentLength sur l’objet XmlDictionaryReaderQuotas utilisé pendant la création du lecteur XML. Ligne 2, position 8216.
Erreur lors de la désérialisation du corps du message de réponse pour l’opération « Translate ». Dépassement du quota maximal pour la longueur du contenu de chaîne (8192) lors de la lecture de données XML. Ce quota peut être augmenté en modifiant la propriété MaxStringContentLength sur l’objet XmlDictionaryReaderQuotas utilisé pendant la création du lecteur XML. Ligne 1, position 9021.
By MARK JEWELL, AP Personal Finance Writer Mark Jewell, Ap Personal Finance Writer – Tue Jan 18, 4:02 pm ET

BOSTON – Investors are finally inching back into the stock market. But are they too late?

While millions sought refuge in traditionally stable bonds over the past two years, they missed a more than 90 percent rally in stocks. Suddenly bonds don't look so safe, and some of the $11 trillion that Americans have parked in mutual funds is shifting back to stocks.

After putting more than $570 billion into bonds over the past two years, mutual fund investors reversed course last fall, worried that the prospect of rising interest rates and the growing deficits of state and local governments were bringing bond prices down.

In the last two months of 2010, investors withdrew a net $23 billion from bond funds, according to industry consultant Strategic Insight.

At the same time, corporate bottom lines are improving. So investors are finally starting to take another look at stocks after being burned in the 2008 financial crisis and scared by the market's "flash crash" single-day plunge in May.

"Most investors have been in a capital-preservation mentality, because they saw so much of their net worth destroyed in the bear market," says Chris Jones, chief investment officer with J.P. Morgan Asset Management.

Few have fully recovered since the stock market began sliding from its historic peak in October 2007. The Standard & Poor's 500 index is 17 percent shy of that level, despite recent gains.

The momentum has shifted, and now, with a couple of years of solid market performance, many risk-averse investors may be ready to get back in. But there are cautionary voices.

The economic recovery is still fragile in the eyes of Tom Roseen, an analyst with fund-tracker Lipper Inc.

"I wouldn't be surprised if we have a little bit of a pullback over the next couple months, as people re-evaluate their portfolios and take a look at how much the market has gained," he says.

Until recently, investors got a decent return from their play-it-safe strategy. Diversified bond funds gained an average of 10.8 percent last year, beating their average annual gain of 6.2 percent over the past five years, according to Morningstar.

Still, nearly all types of bonds lost money in the fourth quarter, with government bonds taking the biggest hit.

This downturn helped fuel a shift into stocks — most notably abroad. Mutual funds buying overseas stocks took in a net $72 billion last year, while investors pulled a net $49 billion out of funds buying American stocks.

There are signs that U.S. stocks are becoming more attractive to mutual fund investors. For one week last month, domestic stock funds took in more money than investors pulled out. The last time that had happened was in April. And the pace of withdrawals is slowing.

Market optimism is also improving. For 19 consecutive weeks, surveys by the American Association of Individual Investors have shown a greater-than-average belief that stock prices will rise. The last time the surveys had such a long streak of bullish sentiment was in late 2004.

Yet the movement of money because of troubles with municipal bonds offers a reminder of how important it is for investors to remain even-keeled.

"You simply have got to put aside the emotion and believe in what you are taught, to buy low and sell high," says Carol Clemens, a 64-year-old retiree from Edmond, Okla.

She scored big when she snapped up shares of Ford for around $2 when it appeared U.S. automakers might go under a couple of years ago. The stock now trades above $18, thanks to smart moves by Ford's management and a strengthening economy.

Clemens' portfolio is about two-thirds stocks and one-third bonds, and she's recently been trimming her stake in bonds.

"If you put money into bonds, there is a nice cushion when the stock market goes down," Clemens says. "But I'm retired, and we're looking for an income stream. We're not getting it from bonds," she says, calling current yields "abysmal."

Belief that the economic recovery is on track has recently driven up long-term interest rates from record lows. This has led investors to pull out of low-yielding Treasurys. Rising rates also are making it costlier for state and local governments to borrow. Fear of further rate increases also is causing prices for many previously issued bonds to drop. That's because investors will be able to buy newly issued bonds paying higher interest.

So as bond prices decline, investors like Clemens will be looking for income from stocks that pay solid dividends. And as other investors step back into stocks, they may be questioning whether they're making the classic mistake of buying in at the market's peak.

The S&P 500 is up 23 percent since Sept. 1, and at its highest point since August 2008. It finished 2010 with a return of 15 percent including dividends, more than twice the gain for a comparable bond index.

J.P. Morgan's Jones expects further stock gains in 2011, with a breakout year for growth stocks of companies whose earnings rapidly appreciate — think Amazon.com, whose stock price has tripled since March 2009. But Jones doesn't think many investors are willing to get back into those richly priced stocks.

"Investors are incredibly shell-shocked," Jones says, "and they're not willing to pay for growth until they see it."

Yet many market pros are predicting another year of double-digit gains. They point to an abundance of positive economic indicators: factories cranking up production, hiring activity picking up, growing corporate investment in technology. Consumers also are more confident, thanks in part to the recent extension of the Bush-era tax cuts and a new cut in the Social Security payroll tax.

Sooner or later, investors will put their money where it's gaining the most, predicts Bob Doll, chief stock strategist at BlackRock, the world's biggest money management company. Investors tend to chase rather than anticipate returns. He expects investors will embrace stock funds over bonds, ending what he calls an era of fear.

Stocks may post their third year of double-digit percentage gains in a row, Doll says. That hasn't happened since the late 1990s.

And if the market behaves like it has coming out of previous recessions, the S&P 500 could rise nearly 12 percent this year. That's the average gain the index made in the one year immediately following this point in the economic cycle, a year and a half after the end of a recession. The analysis by Birinyi Associates examined market gains coming out of seven prior recessions.

Another positive: Corporate earnings are rising. Around mid-year, Doll expects profits of S&P 500 companies will top the record high they reached in June 2007, noting that more companies have recently been boosting their earnings projections than scaling them back.

Yet many believe investor conservatism still runs deep, in part because of demographics. Baby boomers are beginning to retire in droves, and they're drawn to the steady income and returns that bonds typically generate.

Indeed, not everyone is declaring that investors have given up on bonds. Strategic Insight expects demand for bond funds will rebound in the first half of this year.

A key reason is that bond yields still look pretty good compared with the current near-zero returns from cash investments such as money-market funds.

"The numbers suggest a slow rebound for investor confidence in stocks," says Strategic Insight's Avi Nachmany. "But they'll continue to buy bonds for the same reasons they bought them before: There's an insatiable interest in income, and people are still scared."

Government Federal push for return to Rabat on Eruption test (AP)

By HARRY r. WEBER, Associated Press Harry r. Weber, Associated Press, 25 minutes ago from

New Orleans - federal investigators are pushing against critics, that they are not enough effort to keep the companies involved in the oil spill in the Gulf far from any practical role in parsing a key element of equipment which has not kept crude into the sea.

Rep. Edward j. Markey sent a letter Friday to the Director of the Bureau of ocean energy management and regulations detailing what he says are new concerns about conflicts of interest in the Eruption tests.

Letter from the Markey said that an employee of Cameron International has been authorized to operate components of the Eruption in the same week where a bureau ocean energy spokesman insisted the company representatives are not involved in the 300 tons of testing device. The Markey concerns are similar to those recently expressed by the Council for chemical safety in the United States.

However, the same spokesperson, Melissa Schwartz, said Saturday the Ray Fain Cameron, worker, was not to conduct trials of the Eruption, but rather was involved in the pods keep erosion of hot flashes, a procedure that is periodically and requires hardware Cameron owner and a technician to operate.

Schwartz said parties in agreed cancer months ago, in consultation with a federal judge, that the procedure was necessary and may need to be conducted all a few months.

Representatives of Cameron, BP PLC, Transocean Ltd., the Ministry of Justice and attorneys for plaintiffs in the proceedings on the disaster were allowed to monitor the Eruption review in New Orleans, NASA facility since testing began on November 16.

A Norwegian firm was hired to do the test under the supervision of a federal investigation team.

But the Security Council and now Markey, D-mass.., employees of Transocean and Cameron get preferential and sometimes convenient access to the Eruption. Which would constitute a conflict of interest that Transocean was responsible for the maintenance of the Eruption disaster and Cameron makes the device.

The Commission said it wants the test stopped so Transocean and Cameron officials are removed from any practical role in the review. In his letter, Markey said he wants an investigation of the conduct of any federal investigators that allowed employees Cameron and Transocean access inappropriate to the Eruption.

After the Security Council complaints, Transocean denied that he had acted improperly. It also suggested that the Security Council lacks competence to participate in the survey. A spokesman for Cameron has not responded to a request for comment on Saturday.

Due to the explosion of the rig in the Gulf of the Mexico, April 20, 2010, the Eruption used with BP of the property does not work: stop the oil from the sea. Eleven workers were killed in the explosion, and some 200 million litres of oil were output from BP well oé estimates from Government and BP disputes.

Device has been raised by the seabed on September 4, and he has served on the installation of NASA for two months before testing began.