We the People By Zach Berg, CFA June 18, 2012
“We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”
United States Constitution The Preamble to the U.S. Constitution serves as an exemplary representation of what nearly all democracies hope to achieve through government and serves as a very apropos theme as voters from Greece, France, and Egypt took to the polls this past Sunday.
In Greece, the birthplace of democracy, after waiting six weeks since the last failed election attempts on May 6th, last night’s results indicated the New Democracy (pro-bailout) party received the greatest numbers of votes at approximately 30%, followed by Syriza (anti-bailout) at 26.5% and Socialist Pasok (pro-bailout) at 12.5%. Although New Democracy failed to win enough seats for outright control of Parliament, the formation of coalition government with the Socialist Pasok party is seen as a very likely scenario.
The market’s reaction had been an initial bout of joy, which has subsequently soured as the Euro popped higher only to retrace lower in overnight trading, while Treasury yields actually have marched lower as opposed to the sell-off some had thought might transpire given a New Democracy win.
In overnight trading, risky assets received an initial pop which should not have been surprising as many viewed Sunday’s Greek elections as a vote on EU membership and a Syriza victory as a step towards an imminent Greek exit. However, perhaps Sunday’s election should have rather been viewed as whom the Greek’s would like to renegotiate the current bailout terms. Heading into the elections both party leaders of Syriza and the New …