Greeks vote to stay in euro

Knowing that the vote over the weekend in Greece was really a referendum on Euro membership, a majority of the Greek Parliament said yes to staying. European Finance Ministers meet again on Wednesday to solidify the 2nd bailout package for Greece at the same time hopefully a deal is consummated between Greece and its creditors this week. The Greek 14.5b euro bond that matures on March 20th is up by 2 pts. The optimism that all will be completed and contained AGAIN to Greece has yields lower in Portugal, Spain and Italy. The iTraxx Financial Index is also narrower by about 5 bps. However difficult these times are for Greece, there is no way around the shrinking of their public sector to a size their private sector can sustain and putting private sector wages on a competitive playing field with the rest of Europe. From a US stock market perspective, outside of Friday’s worry with Greece, the straight line upward move over the past two months reflected a lack of concern that a deal wouldn’t happen and today we’ll get to see what’s been priced in with Greece.

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