# Impact of Greece vote?



## jargey3000 (Jan 25, 2011)

I don't pretend to understand this stuff, but which would have bigger immediate impact on stock markets - a "Yes" win or a "No" win? And, would the impact be positive or negative? Comments?


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## avrex (Nov 14, 2010)

I believe a NO vote will cause stock markets to tumble (at least in the immediate short term).

A NO vote will *increase the probability* that Greece will exit the EU.
A Greek exit will in turn, increase the probability that this contagion could spread to Italy and Portugal in future years (as they are also struggling to keep their debts under control).

The following is taken from the article, "Vote Yes, or waste five years of austerity" (July 4, 2015).


> If the Greeks vote Yes on Sunday, Mr. Tsipras and his Syriza colleagues will have to quit, since they support a No vote. Otherwise, they will have no legitimacy, let alone any credibility, to negotiate effectively with creditors and undertake the necessary reforms to the economy and public finances. A new unity government formed by opposition parties would likely take its place in order to bring the Greek economy back from the edge of the abyss. In other words, the country would be back to where it was about a year ago.
> 
> If Greeks vote No, then Syriza stays in power and the Greek economy falls into the abyss. The European Central Bank will no longer be able to provide emergency financing to Greek banks, forcing the latter to collapse. Without a properly functioning banking and financial system, the economy will enter a depression, with IOUs and barter the only means of doing business until the Greek government introduces a new currency, which is not something that can be done overnight


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## jargey3000 (Jan 25, 2011)

(bump) Thanks. good info. anyone else?


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## agent99 (Sep 11, 2013)

A yes vote and subsequent recovery of Euro could end up being a plus for US economy. If US$ loses value to Euro, US exporters will gain an advantage and in turn US markets could gain.

But really, I would not try and call the result of the vote or the affect of a vote either way.


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## avrex (Nov 14, 2010)

The NO's are projected to win with 60%.

This could be the beginning of the end for Greece in the EU. 

Goodbye, Greece. You better start printing your drachma currency.


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## 1980z28 (Mar 4, 2010)

By 9pm tonight the count will be confirmed


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## dime (Jun 20, 2013)

Reports are say it's a majority %60 no vote. I'd say this week the markets will retest the low of week and likely drop further. We'll likely see the market sell off hard and some stocks might come down over 5% tomorrow. This Greece vote pales in comparison to the Chinese markets which are in full blown panic selling. Their markets have lost 2 trillion in value and are now down 30% since the high, with even more selling likely ahead.


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## supperfly17 (Apr 18, 2012)

dime said:


> Reports are say it's a majority %60 no vote. I'd say this week the markets will retest the low of week and likely drop further. We'll likely see the market sell off hard and some stocks might come down over 5% tomorrow. This Greece vote pales in comparison to the Chinese markets which are in full blown panic selling. Their markets have lost 2 trillion in value and are now down 30% since the high, with even more selling likely ahead.


Its odd but whenever we think markets will drop and collapse nothing ever happens. I wonder if it will be same tomorrow, or there will be a huge sell off.


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## dubmac (Jan 9, 2011)

If I were to speculate, I suspect that any big drop in markets will happen after the EU leaders (Merkl & Hollande) meet to discuss the "next move" by the EU community. This would likely be on Wed or Thursday this week. JMO tho.


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## Rusty O'Toole (Feb 1, 2012)

The vote is 61% NO - Euro opens under 1.10, ES down 33, Brent crude under $60, S&P futures down 1.5% in pre market trading.


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## sags (May 15, 2010)

So it is a no strings attached bailout for Greece then ?


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## sags (May 15, 2010)

Maybe the Greeks could fashion something like how the US handles it's debt.

US. Tax Revenue $2,170,000,000,000
Federal Budget $3,820,000,000,000
New Debt $1,650,000,000,000
National Debt $14,271,000,000,000
Recent Budget Cuts $38,500,000,000

Let's remove 8 zeroes and pretend it is a household budget:

Annual Family Income $21,700
Money the Family spent $38,200
New Debt on the Credit Card $16,500
Outstanding Credit Card Balance $142,710
*Recent Budget Cuts $385*


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## dime (Jun 20, 2013)

S&P futures down about 1% and improving... so the reaction is not as horrible as some feared. 
May have something to do with China injecting big $ to restore confidence in it's stock market after it lost 2 Trill. 
Shanghai closed postive for a change after panic selling last week. This seems a bigger story than Greece. China is the driver of global growth. 

Oil and copper futures were down over 4% ... that's an interesting reflection of the overall global economy.


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## supperfly17 (Apr 18, 2012)

dime said:


> S&P futures down about 1% and improving... so the reaction is not as horrible as some feared.
> May have something to do with China injecting big $ to restore confidence in it's stock market after it lost 2 Trill.
> Shanghai closed postive for a change after panic selling last week. This seems a bigger story than Greece. China is the driver of global growth.
> 
> Oil and copper futures were down over 4% ... that's an interesting reflection of the overall global economy.


Yupp whenever we think there is going to be a $hitstorm nothing ever happens. Oil is down so markets are down thats all


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## lonewolf (Jun 12, 2012)

Try marking news events that you think would dramatically effect the market on charts of the major averages to see if it matters. I have seen this done over the years & it simply does not matter the market has its own beat is the way I see it


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## dogcom (May 23, 2009)

It really comes down to what is done about it over the coming days and weeks. If some sort of deal is not reached then most likely money will find its way to Greece in some above board or in a secret manner to stop a contagion from occurring. I was hearing that as little as a billion dollars in payments would stop a problem from hitting French banks and then side swiping German banks. A billion is not small, but it is a small price to pay for the German banks to avert a disaster. 

I think a combination of events and problems that can't be kept under the rug would cause an event to ruin the market. So it may not be today but down the road a bit like what happened in 2007-09. This is what we have to watch for is the signs that something is being done or not done about it. After the rescue in 08 the Fed came out in 09 and basically said they would do everything and anything to keep liquidity flowing and be involved in the markets. The Chinese are making these same noises today but we will have to wait and see how far they are willing to go to support their stock market.


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## humble_pie (Jun 7, 2009)

dogcom has a good point, the crisis clock is close to midnight & while we wait, every news item should be monitored for double or even triple sigificance.

meanwhile putin tells tsipras, who phoned him (not the other way around) that russia won't offer loans but might be interested in buying up ports, airports, railways & other greek transportation systems.

ooh, so bold & brassy, that putin. The russian leader knows there's no point wasting precious military to conquer a country that's already teetering on ruin. Not even necessary to field a comic opera putz dressed up in balaclava costumes, like russia had to do in crimea. Just buy up the strategic infrastructure, it'll be the cheapest conquest ever, says mr. putin to himself.

now over to washington, what will washington have to say about the auctioning off of greek vital organs?


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## none (Jan 15, 2013)

humble_pie said:


> dogcom has a good point, the crisis clock is close to midnight & while we wait, every news item should be monitored for double or even triple sigificance.


This is called making up a signal from the noise. It's a fools errand.


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## supperfly17 (Apr 18, 2012)

humble_pie said:


> dogcom has a good point, the crisis clock is close to midnight & while we wait, every news item should be monitored for double or even triple sigificance.
> 
> meanwhile putin tells tsipras, who phoned him (not the other way around) that russia won't offer loans but might be interested in buying up ports, airports, railways & other greek transportation systems.
> 
> ...


And thats why the USA and Europe wont let it happen, and will loan them $, and keep loaning as long as they can.


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## humble_pie (Jun 7, 2009)

supperfly i agree, you've always been on-the-money with this drama

aren't they superb actors, though. One will never see better on broadway or london's west end. The greeks are making "flanby" (pudding-face) françois hollande look like a grocer.

varoufakis nobly sacrificing himself last night so that his prime minister could negotiate with western europe with cleaner hands? the former minister of finance saying he will "wear their [west europe's] loathings with honour"? ooh, là

tsipras will squeeze a better deal out of western europe within 48 hours?

meanwhile the massed chorus moans & sways & laments to the heavens

sooner or later, after the frenzy, will come the catharsis


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## CPA Candidate (Dec 15, 2013)

I read that Greece has a GDP similar to Louisiana. This might be a big deal for Europe, but for us I find it a useful buying opportunity. The world will still turn no matter what happens in Greece.

And I also think it points out how diversification into weak economic regions just for the sake of diversification is not a good strategy. VGK is barely higher now than it was 10 years ago. Europe's economy is moribund with no sign it will change anytime soon.


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## AltaRed (Jun 8, 2009)

CPA Candidate said:


> VGK is barely higher now than it was 10 years ago.


I thought it was late 2007... about 7.75 yrs ago.


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## GoldStone (Mar 6, 2011)

CPA Candidate said:


> And I also think it points out how diversification into weak economic regions just for the sake of diversification is not a good strategy. VGK is barely higher now than it was 10 years ago. Europe's economy is moribund with no sign it will change anytime soon.


1. You forgot the dividends. 10 year total return is 5.25% annualized. That's not terrible.

2. Investing is a long game. MSCI Europe returned 8% annualized since 1994. 

3. S&P 500 returned *-4%* annualized in the 10 years from 2000 to 2009. What a terrible investment. Why would anyone want to own it??? Ah... sorry... I forgot. S&P 500 returned 16% annualized in the next 5 years. Funny how reversion to the mean works. Just when you leave a region for dead, it goes on an absolute tear.


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## lonewolf (Jun 12, 2012)

Everyone is looking @ Greece

In the U.S the velocity of money has fallen off a cliff & the job participation rate is making lows this is not a sign of a recovering economy while the Dow made new highs into May. Diminishing volume on the NYSE since 09, The trend line of the rising diagonal from 09 has been slightly broken to the downside. Anyway it is sliced & diced were on the verge of a financial holocaust.


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## dime (Jun 20, 2013)

What became a bigger shock to the markets today than the Greece no vote was the unexpected 7.7% sell off in oil. We might be on our way back down to $45 a barrel to retest the lows from earlier this year. Why did oil sell off so hard? Why this big drop today? Who knows, but from what I gather it's from a combination of factors : Slower growth in China, big sell off in the Chinese market, stronger US dollar, a possible Nuclear deal with Iran, increased production levels and rising supply...

CNBC: "Oil crushed by worries on Europe, Iran" 
http://www.cnbc.com/id/102811691


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## AltaRed (Jun 8, 2009)

dime said:


> What became a bigger shock to the markets today than the Greece no vote was the unexpected 7.7% sell off in oil


I don't see that as a surprise. Production has exceeded demand continuously for well over a year and is still growing (the lag effect of development capex in long(er) lead projects). Prices got ahead of themselves this year. I believe prices under $60 for a sustained period of time (maybe a year or more) are needed to curb sufficient new capex spend to have the production curve rollover on a global scale.


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