This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Banking on the Greek Election

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( TheStreet) -- The stock market has been relatively unchanged in recent days, despite some sizable intraday swings. The movements suggest that the market is nervously awaiting a decision to be reached.

This is a big year for decisions. Another important vote takes place this week in Europe with Ireland, a country that received a bailout in 2010, holding a referendum on the European Union fiscal compact.

This is a necessary step toward the end-game of eurobonds and a collective monetary, fiscal, and debt policy for all of Europe. The recent polls in Ireland suggest it is expected to pass.

A failure -- or even a very close vote -- may be viewed negatively by the markets. But this is not why the markets appear to be impatiently holding their breath.

Instead, the vote that markets are most focused on at the moment is the June 17 Greek election. This is evidenced by the recent outsized reactions in the stock market to public polling results printed in Greek newspapers.

If the Greek election favors pro-bailout parties with enough votes to form a coalition and avoid the potential for an immediate Greek default, then investors may enjoy a potential relief rally as immediate risks subside. Progress toward a long-term solution for a combined Europe can continue while Greece, a very small part of the Eurozone economy, will remain in a depression.

However, if the outcome of the election is similar to the last one and fails to produce backing for the bailout agreement, the markets will likely continue to slide as a chain of events begins to unfold that holds the risk of a financial crisis.

Potential Post-Election Chain of Events

The series of events following the election if the antiausterity parties garner enough votes to endanger Greece's membership in the eurozone may begin with an acceleration of large withdrawals of euros from Greek banks for fear of a forced conversion to a "new" drachma at a substantially devalued level.

Nearly one-third of deposits have already left Greek banks over the past three years as the risk has risen.

1 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.66 +9.43 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs