Cool Video: Euro, Dollar and Greece

Here is a clip of my CNBC appearance from earlier today. After gapping lower in Asia, the euro was gradually recovering, and later in the North American session, it picked up momentum and traded around $1.1280 from near $1.0950 earlier in Asia.

It is tempting to read some fundamental development into the price action, but the other asset markets, including stocks, bonds and emerging markets did not recover. It seems that many short-term traders who sold the euro on the Greek developments were forced to buy it back as the downside momentum stalled. It was like a dog chasing its tail.

I have been more sympathetic than most investors to Greece's plight. Yet I was dismayed by the government's call for a referendum. It seems like abdication to me. It is not clear what a yes vote means after the second assistance program expires tomorrow. Prime Minister Tsipras seems to be saying that it does not want to govern if it means implementing the demands of the official creditors.

After all, a yes vote is a vote of no-confidence, and the Syriza government would likely collapse. This would lead to a cross party unity government and/or new elections. If Greek people vote no, than the humanitarian crisis that Syriza has called the world's attention to will get meaningfully worse.

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