What does the Greek vote mean for the U.S.?

The immediate effects in the United States of the "no" vote cast by Greek voters in the referendum on the EU bailout will likely be limited – at first.

American banks hold little Greek debt, so the contagion of a Greek exit from the euro would be negligible.  But the Dow Jones could be in for a very rough ride, as overseas markets are sharply lower today as a result of the vote.

Politically, it's a loss for the Obama administration, who supported the far-left Greek government's demands for debt relief and easier terms.  The president made no friends in the rest of Europe by advocating this path, and because of that, the U.S. is a non-player in the crisis.

Some other potential effects in the U.S. as a result of the crisis:

The vote sets up a fresh problem for President Barack Obama, whose administration has gently pushed creditors to ease some of their demands, without any success. Obama angered the Germans and other creditors when he said in February that “you cannot keep on squeezing countries in recession.”

Since then, statements on the Greek talks from Obama and Treasury Secretary Jack Lew have been more muted, focusing on getting negotiators back to the table to hammer out an agreement.

And while the White House is sympathetic to Greece’s calls for easier terms, the main objective in the administration is to make sure some kind of deal is made to avoid a Greek exit. The vote likely makes that goal significantly harder to achieve, making it a negative for the White House.

A Greek exit from the euro could also complicate the campaign of Democratic front-runner Hillary Clinton, who is counting on a strong U.S. economy helping her party hold onto the White House.

Without further bailout assistance, Greece is likely to be unable to repay a $3.9 billion bond held by the ECB. That payment is due July 20, and if Greece fails to pay it will be officially in default, which could lead to the collapse of its banking system and essentially force the country out of the eurozone.

There is no precedent for a country leaving the common currency. And if Greece goes, interest on bonds of other weaker eurozone nations such as Italy and Spain could soar, pushing those countries back into financial crisis and possibly forcing them out of the monetary union as well. That could in turn roil global markets, send Europe into broader recession and drive down investor and consumer confidence in the U.S.

A weak U.S. stock market could have an impact on the sluggish economy, stunting growth even more and weakening the "recovery" – if that's possible.  Unless there is a problem with contagion – banks in Spain, Italy, and Portugal being severely stresssed as a result of skyrocketing borrowing costs – a Greek exit is not likely to push the U.S. into recession again.  But we're all in uncharted territory, and the psyche of the market is unknowable.  A panic could rock the world economy as seriously as the 2008 meltdown.  This is not expected, but who knows?

Fasten your seat belts.  The road ahead is going to be bumpy.

The immediate effects in the United States of the "no" vote cast by Greek voters in the referendum on the EU bailout will likely be limited – at first.

American banks hold little Greek debt, so the contagion of a Greek exit from the euro would be negligible.  But the Dow Jones could be in for a very rough ride, as overseas markets are sharply lower today as a result of the vote.

Politically, it's a loss for the Obama administration, who supported the far-left Greek government's demands for debt relief and easier terms.  The president made no friends in the rest of Europe by advocating this path, and because of that, the U.S. is a non-player in the crisis.

Some other potential effects in the U.S. as a result of the crisis:

The vote sets up a fresh problem for President Barack Obama, whose administration has gently pushed creditors to ease some of their demands, without any success. Obama angered the Germans and other creditors when he said in February that “you cannot keep on squeezing countries in recession.”

Since then, statements on the Greek talks from Obama and Treasury Secretary Jack Lew have been more muted, focusing on getting negotiators back to the table to hammer out an agreement.

And while the White House is sympathetic to Greece’s calls for easier terms, the main objective in the administration is to make sure some kind of deal is made to avoid a Greek exit. The vote likely makes that goal significantly harder to achieve, making it a negative for the White House.

A Greek exit from the euro could also complicate the campaign of Democratic front-runner Hillary Clinton, who is counting on a strong U.S. economy helping her party hold onto the White House.

Without further bailout assistance, Greece is likely to be unable to repay a $3.9 billion bond held by the ECB. That payment is due July 20, and if Greece fails to pay it will be officially in default, which could lead to the collapse of its banking system and essentially force the country out of the eurozone.

There is no precedent for a country leaving the common currency. And if Greece goes, interest on bonds of other weaker eurozone nations such as Italy and Spain could soar, pushing those countries back into financial crisis and possibly forcing them out of the monetary union as well. That could in turn roil global markets, send Europe into broader recession and drive down investor and consumer confidence in the U.S.

A weak U.S. stock market could have an impact on the sluggish economy, stunting growth even more and weakening the "recovery" – if that's possible.  Unless there is a problem with contagion – banks in Spain, Italy, and Portugal being severely stresssed as a result of skyrocketing borrowing costs – a Greek exit is not likely to push the U.S. into recession again.  But we're all in uncharted territory, and the psyche of the market is unknowable.  A panic could rock the world economy as seriously as the 2008 meltdown.  This is not expected, but who knows?

Fasten your seat belts.  The road ahead is going to be bumpy.