Update on the Greek Referendum

FYI, here’s a quick “Greferendum” update. More to follow.

1. Exit polls out of Greece, as well as very early ballot results, suggest that the “NO’s” may have prevailed at today’s referendum. 

2. IF this historic "no" win is confirmed, look initially for a general selloff in global equities, along with price pressures on the bonds issued by Greece, other peripheral Eurozone economies and emerging markets.

3. What happens next is a function of three main things:

? whether Greece and its creditors can work together to reconcile what were two very different interpretations in the run-up to today as to what a “no” outcome means, and do so very quickly and effectively;

? whether already horrid conditions on the ground, including the high likelihood of further delays in re-opening the banks and significant difficulties getting fresh money into ATMs, provide enough time for the politicians to get their act together; and

? whether the ECB rolls out new measures to contain contagion.

4. It may soon be time for all parties involved to shift to their Plan B, with the main aim being to counter as quickly as possible the likelihood of further human suffering, pain and uncertainty.

5. Europe has the instruments to limit contagion over time and, thus, maintain the integrity of the Eurozone. It is much more doubtful whether, despite its willingness, Greece can restore its status as a full member of the Eurozone.