Are investors overreacting to the prospect of a recession?
The slightly better jobs report in the US on Friday notwithstanding, the odds of a recession appear to be climbing, and that's bringing back scary memories.
Though stocks may look cheap thanks to record corporate profits, that was also true the last time the US was heading into a downturn. Based on recent recessions, profits could fall a third if the economy crumbles.
Investors have been worried about a new recession for months. Headlines last week ratcheted up the fear.
On Tuesday, the Federal Reserve Chairman Ben Bernanke testified to Congress that the recovery is "close to faltering."
Goldman Sachs said Europe could fall into recession by the end of the year, and push the US "to the edge" of one itself.
A co-founder of the Economic Cycle Research Institute, a forecasting firm that called the last three downturns, made the rounds of TV news shows to say a US recession was all but inevitable.
With memories of the Great Recession so fresh, investors are understandably spooked.
A year after that downturn began in December 2007, profits at companies in the Standard & Poor's 500 index turned into losses. Three months after that, stocks hit bottom at half their pre-recession peak.
But recessions come in many varieties, and most are less scary than the last one.
Text: Bernard Condon, AP
Image: A protester who is part of US-wide rallies against corporate greed and the gap between the rich and the poor with a pithy banner that captures his sentiments.