No, this post is not about how I desperately want an iPad for Father’s Day, nor about the resurgence of Tiger as he once again claims U.S. Open glory. It is about a small, distant country holding an election that should have no effect on the lives of Americans. Sunday marks the second go-round for the Greeks as they try to form a government after their first attempt failed miserably. The New Democracy party is on one side and the Syriza party on the other, with no middle ground (as coalition talks have proven).
I said the elections shouldn’t matter to Americans, but this year is different. If Syriza wins, there is a good chance that Greece exits stage left and ends the Eurozone experiment as we know it.
However, all may not be lost. The chart to the right shows the Greek ASE Stock Index and the U.S. Dollar (inverted for our Chief Investment Officer’s pleasure). A rumor surfaced two days ago that the New Democracy party was ahead in unreleased polls, and the market has certainly reacted. The Greek Index in yellow has surged 15% in the last two days while the Dollar has fallen 2% against the Euro, as a sign of hope that stability in the region will win out.
Or perhaps the G-20 gave the go ahead to the Greeks to vote for whomever they wish. According to a Reuters report, “Central banks from major economies stand ready to stabilize financial markets and prevent a credit squeeze should the outcome of Greek elections on Sunday cause tumultuous trading.” If that’s the case, I hope they know what they’re doing.