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A argument has arisen about whether the facility put together last spring to help finance Greece and to cover future bailouts of eurozone nations if they need it is large enough. The package put together by the EU and IMF totaled nearly $1 trillion.
That fund has put nearly $150 billion into Greece. Many capital markets investors believe that will need to be increased in two years. Ireland may need $130 billion, a
lthough the problems with its banks have not been sufficiently analyzed and the outcome of its austerity package remains unknown. Several EU members want Portugal to tap the fund because its cost to raise money has moved up sustainability. And, there is Spain with 20% unemployment and a housing market which gets into more trouble as time passes.
Several analysts have pointed out that the size of the Spanish economy is more than that of Ireland, Greece, and Portugal combined. It is a very crude measurement to determine what Spain may need in terms of money from the EU/IMF facility.
The total obligations to cover the financial needs of the four nations could rise to $600 billion or $700 billion, which would test the current fund. That test could become harder if any of the four nations’ voters reject austerity and vote in legislators opposed to cost cuts. The changes of heart do not mean the nations can dodge the laws of finance. It only means they may push their days of reckoning further into the future, and that would probably mean bigger bailouts.
There are two opposing arguments about the bailout fund size. The first is that the stronger nations of Europe and IMF should save all the troubled nations at once to salvage the euro and undercut the fears of investors. If this were to work, borrowing costs for the region would drop and perhaps the capital markets would return to normal. Countering that is the point of view that a larger bailout fund would lead to more contagion as the weaker nations grab for the money in the facilit! y to plu g the holes in their budgets. That argument against this is simple. Countries which take aide also lose a large portion of their financial sovereignty which is then transferred to the IMF, France, and Germany in exchange for the help.
The foot race is on: can Spain and Portugal convince investors that their budget plans are strong enough to mitigate their needs for capital? Or, will concerns about their financial futures continue to drive the yields on their sovereign paper higher?
There is middle course. It is for each country to raise taxes so rapidly that, if the increases hold, the need for outside capital will drop. Such a move would essentially make the countries self-financing. It might also cause unprecedented labor riots. Tax increases are the other side of the austerity coin. But, there is a long shot that higher receipts to treasuries may be a solution which keeps Spain and Portugal from the need to rely on outside help.

Will Sprint Nextel Help You Retire Rich?

Now more than ever, a comfortable retirement depends on secure, stable investments. Unfortunately, the right stocks for retirement won't just fall into your lap. In this series, I look at 10 measures to show what makes a great retirement-oriented stock.
Sprint Nextel (NYSE: S  ) has come a long way over the years. Since its beginning as a rival long-distance provider to the much better-known AT&T (NYSE: T  ) and MCI, Sprint has reinvented itself as a major mobile network. Yet for a long time, Sprint was on the outside looking in, as AT&T and later Verizon's (NYSE: VZ  ) wireless segment got access to the much-loved iPhone product line before Sprint did. Now that Sprint iPhones are available, can the company finally get its big chip off its shoulder and muscle its way to success? Below, we'll take a look at how Sprint Nextel does on our 10-point scale.
The right stocks for retirees
With decades to go before you need to tap your investments, you can take greater risks, weighing the chance of big losses against the potential for mind-blowing returns. But as retirement approaches, you no longer have the luxury of waiting out a downturn.
Sure, you still want good returns, but you also need to manage your risk and protect yourself against bear markets, which can maul your finances at the worst possible time. The right stocks combine both of these elements in a single investment.
When scrutinizing a stock, retirees should look for:

• Size. Most retirees would rather not take a flyer on unproven businesses. Bigger companies may lack their smaller counterparts' growth potential, but they do offer greater security.
• Consistency. While many investors look for fast-growing companies, conservative investors want to see steady! , consis tent gains in revenue, free cash flow, and other key metrics. Slow growth won't make headlines, but it will help prevent the kind of ugly surprises that suddenly torpedo a stock's share price.
• Stock stability. Conservative retirement investors prefer investments that move less dramatically than typical stocks, and they particularly want to avoid big losses. These investments will give up some gains during bull markets, but they won't fall as far or as fast during bear markets. Beta measures volatility, but we also want a track record of solid performance as well.
• Valuation. No one can afford to pay too much for a stock, even if its prospects are good. Using normalized earnings multiples helps smooth out one-time effects, giving you a longer-term context.
• Dividends. Most of all, retirees look for stocks that can provide income through dividends. Retirees want healthy payouts now and consistent dividend growth over time -- as long as it doesn't jeopardize the company's financial health.

With those factors in mind, let's take a closer look at Sprint Nextel.

Factor	What We Want to See	Actual	Pass or Fail?
Size	Market cap > $10 billion	$8.54 billion	Fail
Consistency	Revenue growth > 0% in at least four of five past years	2 years	Fail
�	Free cash flow growth > 0% in at least four of past five years	1 year	Fail
Stock stability	Beta < 0.9	1.07	Fail
� < td>Worst loss in past five years no greater than 20%	(86.1%)	Fail
Valuation	Normalized P/E < 18	NM	NM
Dividends	Current yield > 2%	0%	Fail
�	5-year dividend growth > 10%	0%	Fail
�	Streak of dividend increases >= 10 years	NM	NM
�	Payout ratio < 75%	NM	NM
�	�	�	�
�	Total score	�	0 out of 7

Source: S&P Capital IQ. NM = not meaningful; Sprint Nextel had negative earnings over the past year and doesn't pay a dividend. Total score = number of passes.

With no points, Sprint Nextel doesn't have any of the comforting traits that conservative investors like to see in a stock. As a highly speculative play, the company is prone to wild swings and hasn't performed well at all in recent years.
In the fast-evolving world of smartphones and mobile devices, Sprint found itself caught in a catch-22. On one hand, not having the iPhone to sell hurt its customer counts. Yet as the company has discovered, having the iPhone raised subscriber counts, but at the huge price of throttling its margins as huge subsidies could eventually threaten its profitability. In fact, at least one analyst believes that a bankruptcy filing might be in Sprint's future if it doesn't get its future strategy straight.
Another problem is that Sprint hasn't navigated evolving network trends as well as it could have. On one hand, Sprint was first to the 4G finish line with Clearwire's (Nasdaq: CLWR  ) WiMAX network. But as the competing LTE techno! logy has gained favor, Sprint has had to look for alternatives to Clearwire -- and its first choice, LightSquared, hasn't had the success Sprint had hoped for.
For whatever reason, Sprint continually appears as a potential buyer for its competitors. Before AT&T's bid for T-Mobile, many thought Sprint would try to combine with T-Mobile to stand up to the big two players in the U.S. industry. More recently, Sprint reportedly considered buying out MetroPCS (NYSE: PCS  ) , and others think Leap Wireless might also make a good target. Yet critics believe the company should stop looking at spending yet more money on dubious takeovers and instead focus on keeping up with its rivals on the service end.
For retirees and other conservative investors, the uncertainties involved with Sprint make it an unsuitable stock. It's true that if Sprint can manufacture a turnaround, the stock could soar. But with no dividend income, no growth, and big share-price losses in recent years, Sprint isn't the best choice for a retirement portfolio.
Keep searching
Finding exactly the right stock to retire with is a tough task, but it's not impossible. Searching for the best candidates will help improve your investing skills, and teach you how to separate the right stocks from the risky ones.
If you really want to retire rich, no one stock will get the job done. Instead, you need to know how to prepare for your golden years. The Motley Fool's latest special report will give you all the details you need to get a smart investing plan going, plus it reveals three smart stocks for a rich retirement. But don't waste another minute -- click here and read it today.
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