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Everything Wall Street Said About Greece After 'Oxi' Vote

Everything Wall Street Said About Greece After 'Oxi' Vote

Greek voters overwhelmingly voted "no" to a bailout plan proposed by Greece's foreign creditors.

Here is a roundup of what Wall Street's top economic analysts had to say.

Goldman Sachs: Greek Banks Could Come Under Strain

Goldman Sachs analyst Pawel Dziedzic argued that a "no" vote could result in Greek banks exhausting their residual cash buffers within the next few days. Even with outside support, an increase in the ELA (Emergency Liquidity Assistance) would only offer a temporary liquidity relief.

See Also: Greeks Vote 'No' To Bailout, Grexit Risk Might Have Just Increased

"We expect the relaxation of imposed capital restrictions to be a prolonged and gradual process constrained by depleted liquidity buffers," Dziedzic stated. "While circumstances in Cyprus were different, it took less than one year to remove ATM limits and less than two years to lift the remaining restrictions."

Citigroup: Greece In Limbo Is A Near Certainty

Citigroup analysts penned a new term to describe the situation in Greece: "Grimbo," which stands for "Greece in limbo" and implies a failed debt restructuring agreement between the Greek government and its creditors that will result in no new disbursements of funds to Greece.

The analysts argued that "Grimbo" is a "near-certainty" and "Grexit" (a Greece exit from the Eurozone) risk "has risen" even if an exit takes months or years to happen.

Barclays: Greece EMU Exit Most Likely

A group of analysts at Barclays stated that the most likely outcome following the Greek referendum involves the country exiting the Economic and Monetary Union of the EU. As such, the analysts are speculating the European Central Bank's Governing Council will shut down its ELA program around July 20, resulting in Greece running out of liquidity.

The analysts added that under such a scenario, Greece will default on its debt and will be forced to print its own currency (issuing IOUs) in order to re-inject liquidity and recapitalize banks.

Nomura: "Shenanigans" Have "Eroded" Greece's Credibility

Nomura's Lefteris Farmakis stated that the "shenanigans" of the five-month long negotiations have "eroded" the credibility of the Greek government and created an atmosphere of distrust with European Union policymakers.

In terms of a "no" win, the analyst suggested that this implies Greece's Prime Minister Alexis Tsipras remains the "de facto Greek interlocutor" and the two sides will be forced to restart negotiations under the same "difficult" conditions that existed prior to the vote.

Statista: Many Europeans Want A Grexit

According to a YouGov poll, 53 percent of German respondents prefer seeing a "Grexit," while only 33 percent of French respondents want to see the nation leave the Eurozone.

Outside of the two large economic powerhouses, a high percentage of respondents responded indifferently to the question as "many people across Europe care little about whether Greece leaves or stays in the Eurozone."

Bookmakers: 5/2 Odds Of A Grexit

Ladbrokes, a popular betting and gambling company in the U.K. is saying the odds of a Greek exit from the EU stands at 5/2. However, the betting site is expecting Greece's membership in the currency union will persist until at least 2016.

The betting company is also placing the odds of the U.K. exit from the EU at 3/1. A referendum is scheduled to take place prior to the end of 2017 asking if the U.K. should remain a member of the EU.

Macquarie: Puerto Rico, China Not That Different From Greece

Macquarie analyst Viktor Shvets stated that Greece and Puerto share several concerning traits including their inefficient and noncompetitive positioning in the global market. Both nations are mired in favoritism and corruption.

In terms of China, Shvets noted that the small interest rate cut and margin financing relaxation implemented by the nation recently are similar to the tentative steps the ECB took back in 2009-2011.

"It seems that investor belief in the ability of monetary and public sector policies to delay the day of reckoning until a less painful solution to inevitable de-leveraging is found might be starting to unravel," Shvets argued.


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