US Treasury bonds hit record low yields in early June amid an investor flight to "safe" assets.
As of June 5, the CAC 40 index of Paris stocks had posted a one-year loss of nearly 25 percent. The Dow Jones Industrial Average was flat for the period, though the Dow lately has taken directional cues from Europe.
If things get worse, European stocks could fall further (by 35 percent, one Morgan Stanley analyst says). Or they could rise by a similar degree if the mood of crisis eases significantly.
One problem: The political climate in Europe is so fractious that some forward steps may come only as decisions are essentially forced by financial-market distress. So even though the most dire scenarios may never materialize, the process of avoiding them could drag on.
