U-shaped recession or L-shaped depression?

[kelvin070]

There is a saying 'what goes up must come down'. It all came down unexpectedly too steep and it hurt my ass. Lost tens of thousands with some of my investments. Its not just papar loss but real money. Thank God my capital is protected in some other investments. Cash is king these days. I have a friend who is a business owner and ever since the global crisis he keeps his dailly takings in cash in his house instead of the bank.
So what you guys think? Is it gonna be an U-shaped recession or L-shaped depression? Going by the bad economic data in USA, Europe, Japan and the rest of Asia I am pessimistic about the future and wont rule out an L-shaped depression.
Share price of the once mighty Citigroup slumped under US$1 two days ago. At its 2006 peak Citi's share price was $55. Stimulus package measures may not be the answer with mounting job losses and people cutting down on spending. If there are no signs of recovery by early 2010 then probably its gonna be a L-shaped depression.

 

[Briana]

I wouldnt know, over here I think our govt has been banned from using the word recession they will say every other word but not that one.
Im just bummed because now I am earning jack squat interest off my investments.
I think it will be an L shaped depression, no way is this going to be picking up any time soon, too many people have lost jobs and too many companies have lost the money to create new jobs for the near future. There are going to be a lot of unemployed people for atleast the next 5 years before this really picks back up

 

[Briana]

oh and on the stimulus packages December last year everyone under a certain tax bracket got a lump sum, I think it was $1000 per child might have just been $1000 per household Ive forgotten, the idea was go out and spend it, stimulate the economy, most people put it right back into their mortgages or saved it so it hardly helped at all. Later this week another package is being sent out, $900 for every single parent household, $900 for every child of school age, $900 per tax payer who earns under $100,000 a year and $900 for students and people who are doing training. Suppose to go out and spend that too but everyone is predicting with things so tight the money will go straight to bills and savings accounts and our govt is going to be in the red big time because of it.
Doesnt look good

 

[kelvin070]

oh and on the stimulus packages December last year everyone under a certain tax bracket got a lump sum, I think it was $1000 per child might have just been $1000 per household Ive forgotten, the idea was go out and spend it, stimulate the economy, most people put it right back into their mortgages or saved it so it hardly helped at all. Later this week another package is being sent out, $900 for every single parent household, $900 for every child of school age, $900 per tax payer who earns under $100,000 a year and $900 for students and people who are doing training. Suppose to go out and spend that too but everyone is predicting with things so tight the money will go straight to bills and savings accounts and our govt is going to be in the red big time because of it.
Doesnt look good

I guess even if people start spending in the months ahead as the real effects of the stimulus package show some results the package will result in double digit inflation with the massive amount of money supply.

 

[Briana]

thing is even if people spent the money its $900 and once its gone its gone, sure the stores will see a spike in sales but it will last what 2 months then go back down again when the $900 is all gone

 

[kelvin070]

thing is even if people spent the money its $900 and once its gone its gone, sure the stores will see a spike in sales but it will last what 2 months then go back down again when the $900 is all gone

Governments are using text book economic theory - pump-prime the economy to create a multiplier effect. But the text book theories don't seem to be working.