Social Unrest Can Shake Investor Confidence And Contagion Can Spread 10-Year Sovereign Yield Spread (over German Bonds) for Greece / Portugal / Spain / lreland, April 1 -— May 10, 2010 VOY = 5/6 — Greek parliament 3 formally approves austerity ——> & 8% package agreed w/ EU & IMF ——Greece < (i) E 4/22 — Greek civil servants 1) stage a 24-hour strike G 6% =—Portugal o no) Q 5/5 — Violent protests in & ; Athens against proposed —spain 3 4% austerity measures 2 2 a s 2% =—Ireland = § o_O > 2 0% rr cc 4/1 4/4 477 «4/10 «413 4/16 4/19 4/22 4/25 4/28 5/1 5/4 5/7 KP Source: FactSet. i USA Inc. | Consequences of Inaction 429 Government Deficits and Changes in Sovereign Credit Default Swap Rates = Positively Correlated Cumulative Government Deficits as % of GDP vs. Change in Sovereign CDS between 2007 and 2011E cs nt ® Greece N no} € BV) = = sere = meer = cares = canes = canes « cna cine s coins coasts & chan Shamu & Sous & Sou & Sole & Sole & Se 3 R 3 ID) = mem © ese moi soem cn = msn wn & eon & ont & GR Aono Gg GoREGE Ge coneoe i Mano a Mao a Me @ fe) a a 3 5 200 Rortugal é¢ R? = 0.1996 o= ave =- SI e Ireland Pn 100 Here cane se see ns ap IEE ag anon seen ne nes nsec seaunacaneseaees a Germany —-® ~ Japan . Trance UK 2 -“ - USA .° & 02 ——— @e Netherlands e o TT e 0% som Austria o90, 30% 40% 50% 60% S BAQO! = «sie «see eae ce & ee = ie re ew iw ew ne HA Ser A ere Ha En ww Co Cumulative Government Deficits as % of GDP for 2007-2011 (10-11 Projections) K p Sources: OECD; Markit; National Data Ce USA Inc. | Consequences of Inaction 430 HOUSE_OVERSIGHT_021056