(MENAFN- The Arabian Post) This is now officially a Greek tragedy. In many ways, it is relatively easy to understand why the result was a No from Greece. There is little to lose, as a Yes to more austerity hardly was a great choice for a society on the brink of a social break down.
The vote clearly was not help by the fact that the actual vote: Yes or No was confusing. What did they actually say No to?
This does not change that I firmly believed Greece would say yes and unseat a government that is more interested in their own survival than the country's destiny. What comes next politically is difficult to predict but markets are slightly easier:
€¢ DAX will open down 5% € again € and probably lose 10% during next few weeks unless ECB and Fed does a repeat of 2010-11 plunged protection teams.
€¢ The Club Med spreads will rise 20-50 bps over the next few weeks"
€¢ Bulgaria, Croatia, Romania should see considerable spread increases
€¢ EUR/USD € that is the difficult one: I expect a weaker open, but if" Greece is actually going to leave the EURO then it will be stronger by the end of week. For now I expect 2-5% range the first 24/48 hours (Early Sunday night indication points to: 1.0990/1.1000 (i.e. down 120 pips)
Compared with CNBC's prediction: http://www.cnbc.com/id/102810251?utm_source=dlvr.it&utm_medium=twitter
The real risk remains the illiquidity of the market. Do not forget that through government intervention (QE's) in the bond market there is no two-way market. No market makers and no risk capital (due to capital requirement and regulation)
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