Shares tumbled across global stock markets
Fears about the health of the global economy are back. Stock markets around the world have tumbled this week as investors' recent optimism evaporated.
For months, financial markets were rising on the back of a belief that the worst of the global recession was over.
But those analysts and economists who argued that this optimism was a triumph of hope over reality may yet be proved right.
Why have European stock markets been so badly hit?
Greece is peering over the financial precipice. For a sovereign European nation that is part of the eurozone to default on its debts is potentially catastrophic.
But just when it was thought that Greece and the wider European Union had got to grips with the country's woes by offering savage budget cuts, there are fresh fears about whether Portugal and Spain can repay their debts.
"This theme of sovereign debt is rife and at the forefront of investors' concerns," says Neil Mackinnon, economist at VTB Capital. And these fears are not just confined to Europe.
But I thought the US, and especially China, were leading everyone out of recession.
They are - but not as fast as everyone hoped. Thursday's US unemployment figures were surprisingly bad. New claims jumped 6% to 480,000 in the week ending 30 January.
These figures tell us that, despite months of sharp rises in share prices and other assets, this mini-boom is not being translated into lasting recovery in the real economy.
China has the opposite problem to the US. Its economy is growing too fast, and Beijing needs to calm things. Fiscal tightening in China is probably the biggest single reason for recent falls in the oil price and other commodities.
"The rebound in [Chinese] exports means aggregate demand in China's economy is headed into an overheating zone again," warns Zhang Ming, deputy chief of the International Finance Research Center.
Will the ending of quantitative easing make things worse?
There is a consensus that QE - pumping new money into the economy by buying back assets like government bonds - and other emergency support measures by central banks around the world have helped stave off a depression.
But the big question was always: what happens when this support ends?
We got a partial answer this week. On Thursday the UK put its QE programme on hold. The US Federal Reserve and the European Central Bank say they will end their credit easing initiatives soon.
But taking away these financial "props" caused further jitters among investors who fear that the only reason asset prices are rising is because governments are pumping liquidity into the market.
Is there any good news?
Despite some disappointing profits figures this week from titans like BP and Royal Dutch Shell, corporate earnings generally are on the rise.
Fourth-quarter profits for S&P 500 companies - the benchmark for large-cap US stocks - are up 206% from a year earlier, according to Reuters analysis.
And some economists believe worries about sovereign default are overblown. Greece is constrained because - being part of the eurozone - it cannot control interest rates.
But no non-eurozone country faces such pressure to reduce deficits. "They can cut interest rates or allow their currencies to fall," explains Steve Barrow, strategist at Standard Bank.
How well is the UK placed to weather these financial setbacks?
There have been some disappointing signals in the UK recently. Growth in the service sector slowed in January, according to the latest figures from the Chartered Institute of Purchasing and Supply.
And the UK came out of recession with a whimper rather than a bang. Gross domestic product (GDP) in the last quarter rose just 0.1%.
But, then again, activity in the manufacturing sector has been rising at its fastest for many years, thanks to the weak pound boosting exports. And unemployment has not risen as high as many economists forecast.
Roger Bootle, managing director of Capital Economics, believes the UK economy is clearly struggling to maintain the meagre expansion it saw in the last quarter of 2009.
However, he adds: "In terms of benchmarking the UK economy, the appropriate bellwethers are similarly sized and developed Western countries - most obviously France, Italy and Germany. I see no reason why the UK should lose ground against these economies."