Investors haven’t spent enough time on worst-case scenarios, says analyst This time we’re really panicking. That’s what some markets seem to be saying this morning on the heels of failed talks over the weekend between Greece and its European creditors. Those discussions lasted anywhere between 45 minutes to an hour, with the breakdown a painful reminder of the fact that the International Monetary Fund bailed on its own talks with Greece last week. The can has now been kicked all the way to the last-stand June 25 European Union leaders summit in Brussels, where some say Prime Minister Alexis Tsipras has all his hopes riding. But there’s also a meeting of Eurogroup finance ministers on Thursday, and many are looking anxiously for Athens to come up with new reform proposals ahead of that. June 30 remains the big line in the sand as Greece has a 1.6-billion-euro ($1.8 billion) payment to the IMF looming, after it bundled all its four June repayments into one. The question is, what will markets do in the meantime? At least as far as Greek bonds and stocks are concerned, maybe just keep panicking. The yield on the 10-year Greek bond pushed above 12% in Europe’s morning, on track for its highest close since late April. It was up 90 basis points at 12.72%, according to electronic trading platform Tradeweb. The yield on 2-year bonds surged 3.9 percentage points to 28.66%. greecebond Greece’s Athex Composite index GD, -0.41% slumped, with banks getting crushed. National Bank of Greece SA ETE, -5.25% slid 14% and Alpha Bank AEALPHA, +2.29% 8%, and banks from Spain and Portugal were also taking it on the chin — a nearly 5% drop for Banco Comercial Português SA BCP, -2.25% and Banco Santander SA SAN, -1.42% SAN, -1.38% was closing in on a 2.7% fall. So maybe some of the suspended disbelief in markets is shifting. After all this time and hand wringing, the market has spent too much time convincing itself that this Greece mess will sort out somehow, and not enough working out what might happen if it doesn’t, said Rebecca O’Keeffe, head of investment at stockbroker Interactive Investor, to clients on Monday. That’s even as creditors have reportedly been talking about just that — the worst-case scenario. “The difficulty investors face is that the market really has little idea of just how much a Greek exit would hurt and how much exposure different companies and sectors have to such an event. The collapse of Lehman’s demonstrated the unforeseen interdependence across multiple markets and counterparties, and the danger is that a Greek exit could have a similar domino effect,” she said. Germany’s European Union commissioner, Guenther Oettinger, told Reuters on Monday that the time had come to ready for a “state of emergency” in Greece. “Energy supplies, pay for police officials, medical supplies, and pharmaceutical products and much more” needed to be planned, he said. Markets in Europe uglied up further as the afternoon wore on, with the Stoxx Europe 600 SXXP, -0.57% doubling an earlier loss, sliding 2%. The euroEURUSD, -0.1950% was sliding and Wall Street, which would probably like to focus on the Federal Open Market Committee meeting this week rather than Greece, was looking ugly. Futures for the S&P 500 index ESM5, -0.38% pointed to a 0.7% loss for the index at the open. MarketWatch