Greece's reckoning could be 'day or weeks' off: OppenheimerFunds' CIO

The worst of the European financial crisis could soon be over, said Art Steinmetz, chief investment officer at OppenheimerFunds Inc. But that could mean that things will have to get worse before they can get better. “Our working assumption — although we do not have a lot of conviction — is that this is a problem that will come to a head in days or weeks,” Mr. Steinmetz said in an interview Tuesday. “We're now down the real steep part of the slippery slope [of the problem] at this point,” he said. “We see an ultimate end that will hopefully recapitalize the banks, and [lead to a Greek] default,” he said. Mr. Steinmetz said the markets were already pricing Greek debt as if it were in default. “The only ones in denial of that are European policymakers who can't admit it [without a] face-saving gesture,” he said. Authorities in Europe need to restructure Greek debt and make clear that European banks will have enough capital to survive a default by any of the peripheral countries, he said. For tactical investors looking for the European markets to bottom, “if they wait for the dust to settle, it will be too late,” he said.