The Magic Letters for 2009 - U, double U, V, L or I?

There was a great interview with Mohammed el Arian of PIMCO this morning on CNBC. He talked about the shape of the recovery. If you look at a chart of the SP500, the chart may form the shape of a Letter of the Alphabet to show you the recovery from the dismal economics of 2008.

A V would be wonderful. It goes down and comes back up very rapidly. Do not count on that in 2009.

An L is the disaster letter. It goes down and it stays down.

I is even worse disaster. It goes down and keeps on going down.

A U is a nice letter. It goes down and stays down for a while and then gradually goes back up.

Beware the W, it goes down, comes back up a little and then goes down again before coming back up. That is, in fact, the more likely letter for this economy. Beware false rallies. Sphere: Related Content