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Illustration: Rebecca Zisser/Axios

For millions of Americans, the 2008 financial crisis came out of the blue. On the theory that it's always calmest before the storm, could another financial crisis of that magnitude come at any moment? The answer, reassuringly, is no.

The bottom line: The stock market is frothy, and it's possible that entire industries like fracking could suffer widespread defaults. But when stocks and bonds go down rather than up, that's a market cycle, not a financial crisis.

Remember the stock-market crash of 2000? People lost money, but the broad economy only experienced a mild recession. And post-crisis safeguards have made a crisis much less likely than it was in 2008.

  • The financial crisis was a wake-up call to central banks in every country, which realized that their main job is bank supervision and crisis prevention, not setting interest rates.
  • Basel III, a global financial reform package in which the U.S. participated, forced all of the world's biggest banks to become much safer than they were before.
  • Dodd-Frank included beefed-up capital requirements that make it much harder for U.S. banks to take outsized risks. It also created the Financial Stability Oversight Council, which is charged with identifying and mitigating systemic risks.
  • We no longer have systemically-important investment banks, whereas there were five pre-crisis: Lehman Brothers (RIP); Bear Stearns, bought by JP Morgan; Merrill Lynch, bought by Bank of America; and Goldman Sachs and Morgan Stanley, which became bank holding companies.

No regulatory regime is perfect, and crises still happen, as a glance at Turkey or Venezuela will attest. But very real progress has been made in terms of U.S. crisis prevention. Plus, American households are much less leveraged than they were pre-crisis, and the global liquidity glut is flowing into equity rather than into dubiously-rated synthetic debt obligations.

WeWork and Netflix might well go belly up. But if they do, they shouldn't take the rest of us down with them.

Sign up here for Felix Salmon's Sunday night Edge newsletter on the week ahead in markets and business.

Go deeper:

1. Read the full deep dive

2. The most urgent financial threats

3. When crisis hit, we fell far and fast

4. The financial crisis executives who got away

5. How the Great Recession fueled for-profit colleges

6. How the Great Recession teed off tech's long boom

7. The Great Recession Generation

8. The financial meltdown's green aftermath

9. The Great Recession's uneven recovery

10. What they're saying: Consequences of the financial crisis

Go deeper

Thousands without power as "hazardous" winter storm lashes East Coast

Winter view from Charlotte as winter storm Izzy creates dangerous conditions in Charlotte, N.C. on Jan. 16. Photo: Peter Zay/Anadolu Agency via Getty Images

A major winter storm was lashing much of the East Coast on Sunday, causing widespread power outages and disrupting travel over the holiday weekend.

The big picture: Heavy snow and ice accumulations are "likely to produce hazardous travel," downed trees and more power outages from the Mid-South to the Northeast, per the National Weather Service. Some parts of the U.S. can expect to see up to a foot of snow through Monday.

Updated 1 hour ago - Science

Volcanic eruption in Tonga caused "significant" damage

This satellite image of the eruption on Jan. 15 taken by Himawari-8, a Japanese weather satellite operated by Japan Meteorological Agency and released by National Institute of Information and Communications Technology (NICT). Photo: NICT via AP

Significant damage has been reported in Tonga following an undersea volcanic eruption on Saturday, which covered the Pacific nation in ash and cut off communication lines.

Driving the news: The eruption triggered tsunami warnings across Tonga's islands and in other regions, including the West Coast of the U.S. and New Zealand.

2 hours ago - World

North Korea launches 4th suspected missile test this month

A news broadcast in Seoul, South Korea, of an apparent North Korean missile test on Monday morning local time. Photo: Jung Yeon-je/AFP via Getty Images

North Korea's military fired "two suspected short-range ballistic missiles" eastward from Pyongyang on Monday morning local time, per South Korean and Japanese officials.

Why it matters: The fourth such launch since Jan. 5 comes days after North Korea's military warned of "stronger" action if the U.S. moved to have more sanctions imposed on the country.