Salient to Investors:

Simon Johnson at MIT Sloan School of Management says:

  • The euro area faces a major economic crisis, most likely a series of rolling, country-specific problems involving some combination of failing banks and sovereigns that can’t pay their debts in full.
  • Expect system wide stress, emergency liquidity loans from the ECB and politicians at one another’s throats.
  • Even optimists say openly that Europe will only solve its problems when the alternatives look sufficiently bleak and time has run out.
  • Dissolution risk is real.
  • Most worried about the balance sheets of the biggest banks.

Read the full article at