Vote reaction is all greek to the market

Market reaction to the Greek vote is muted by what can only be described as a monumental intervention of central banks into the markets.

While Asian markets were mixed the Shanghai exchanges took its 4th or 5th day of +5% losses. Lost in the Greek drama is the massive sell off in Shanghai as Chinese officials look to slash the amount of stock bought on margin.

European exchanges were down 1.5% or more in midday trading as US futures were off their lows, but could take a leg down on dollar strength.

Gold is the most troubling up 0.1% before the US opens. Very hard to believe that’s a true market moving number.


 

In a “deus ex machina” move worthy of many of Euripides’ great tragedies on man’s foibles, Greek Finance Minister Yanis Varoufakis resigned Monday after his historic landslide win.

Varoufakis, who wrote he would “wear the creditors’ loathing with pride,” resigned in order to allow Prime Minister Alexis Tsipras government negotiate without the personality difficulties Varoufakis developed with some EU members including Germany.

With 61% of the vote saying No to the draconian austerity measures the Trioka wished to impose of the Greeks, Varoufakis exits at the top of his game. What comes next may be a step back from this euphoria, in which the Greeks will see a slight improvement in the austerity measures, but pain will be felt.

The thought that Greece will exit the euro, I believe, is far-fetched and not possible for either side.

That said Tsipras has announced he will be holding meeting with Russian financial officials in the next day or so to ramp up the drama

 

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