Are investors overreacting to the prospect of a recession?

The slightly better jobs report 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 U.S. 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 U.S. "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 U.S. recession was all but inevitable.

With memories of the Great Recession so fresh, investors are understandably spooked. A year after that downturn began in Dec. 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. A review of past ones shows that:


http://finance.yahoo.com/news/How-bad-c ... et=&ccode=

I believe that we will be facing hyper inflation soon....I think of Weimar Germany.

http://en.wikipedia.org/wiki/Hyperinfla ... r_Republic

RECESSION, Recession, recession...

THIS IS NOT A RECESSION!!!

We are in a full blown DEPRESSION! Already things are as bad if not worse than the Great Depression and that ended up with WW-II. We are headed full speed into WW-III!

So forget RECESSION!

Well said, caltrop!

For us, the major difference between WWII and WWIII is that WWII was all fought 'over there'...but WWIII will be fought over here as well. Lock and load, Folks...and stay 'frosty'.

WW-III will be EVERYWHERE!

I'm all for PEACE but look what happened back in 1776 when we told England and its' church & banks to stuff it.

Thing is all modern wars are orchestrated by those in power, the banks, to generate more capital and exert more control over those that are not bankers. The banks financed both sides of WW-II! War is good for business; just look at the mercenaries and defense contractors.

I was without water for two weeks while my house was being foreclosed & sold. I used water in containers just like camping. I used rain & whatever but don't trust the rain today with all the crap THEY are spraying up there now. Electric might be a problem with all the cell phones, computers, & stuff but I won't miss the new Windows versions at all.

My new residence, a run down slum apartment. Right now I have no gas because THEY want to verify who & what I am. My new neighbors had to wait over a week for their gas to get turned on. There was also a problem with electric and I had to use oil lamps for a week but I had water.

Being without utilities will be common in the days to come as things continue to fall apart. I survived for short times without but many will go completely CRAZY with no modern amenities. So for now I use a camp stove to heat stuff up because food stamps will NOT buy any restaurant or hot foods; you can get a cooked cold chicken in the grocery store but not a hot one!

During my time of NO utilities I looked at it as being on a camping trip. My best camping trip is your worst nightmare! I used to do serious week long backpacking into remote wilderness areas. But most people are not going to know what to do with nothing.

I felt quite Amish with nothing but an oil lamp and the Amish live quite well without electricity!

With the way people are today, being so self centered and uncaring of others, things will get real bad real fast WTSHTF!

Good Luck to all in the coming days!

Exactly! Think New Orleans and Katrina. We have cultivated a FEMA culture and some people expect to be taken care of from cradle to grave. They may be in for a big surprise if/when the