There is an on going discussion of what scenario of recession we are into among most of the economists and market geeks and many others. Every one of them have their own point of view, which in a way is very interesting as you get to know them all. Are we in a V type recession or a U type or W. Just for the newbies:
V type recession is a sharp fall followed by an equally sharp recovery.
Whereas W type can be called as a side effect of a V type recession. That is, in a pessimistic point of view a sharp recovery in the V could be followed by a second downswing which will form a W type recession.
Coming to U type recession, it can be divided again into two other types as follows:
First one is a bathtub and the other one is saucer. The bathtub implies a trough followed by fairly sharp recovery. The saucer implies a long, slow recovery which could go well into first half of 2011.
Now that we know all these scenarios of recessions that we could be in, I think of a different type of scenario which I think would be the case in the current economic mess. I am thinking of somthing like a sine wave gradually decreasing in magnitude and landing at the average of the entire cycle of recession that we are in.
If at all this makes a remote sense to any one or would like to think about and discuss on this topic, I would be glad to be a part of that discussion. I would appreciate all your thoughts on this.
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