Bulls, bears and Nobel laureates are talking a lot about letters as they try to predict the shape of the charts that will describe the economy's downturn and recovery.

Will this roller coaster follow the path of a "U" -- a stretched-out slump with a sharp upturn?

Or will it be shaped like a "V," with a vertiginous descent followed by a quick recovery?

Will we wrestle with a "W"-shaped double dip, or labor through an "L" of long-term languishing?

At Global Insight, the May presentation "U.S. Recession and Recovery: U-, V-, or W-shaped?" says that a second dip -- a "W" -- would come as spending from stimulus checks dries up.

"There's been debate about whether it's V-shaped or U-shaped," Nobel-winning economist Joseph Stiglitz said recently on CNBC.

"I think there's growing consensus it's an L-shape."

By focusing on letters, Wall Street is "trying to make a desperate situation look sort of technical -- 'It's not that much of a fuss, the big boys can take care of it, don't you worry,' " said Wall Street historian Charles Geisst.

"Except the big boys here, their trousers are getting a little short, I'm afraid."

So far, the downward ride has included record bank write-downs and home foreclosures, the wipeout of $1.9 trillion in shareholder wealth and an increase in unemployment.

The alphabet-shape charts represent the rise and fall over time of economic indicators such as gross domestic product, real income, employment, industrial production and wholesale sales. The National Bureau of Economic Research, the chart-watching private group that gauges economic peaks and troughs, has yet to declare the current downturn a recession.

How it's shaping up

Plenty of others have, saying the charts are proving their point to the letter.

"This could extend itself well into 2009, with repercussions that could keep the country stagnant for two or three years," said Jay Brew, an "L" predictor and chief strategist at community bank strategy firm M. Rae Resources.

Past recessions did, in retrospect, follow certain scripts.

The 1980 recession proved to be a quick "V," as measured in changes in gross domestic product. The next recession, in '81 and '82, looked more like a "W." The 1990-91 recession showed "U"-like traits, while the 2001 recession was another "W."

Pick your metaphor

The fixation on shapes is a departure for Wall Street, where metaphors tend to be about hunting, war or sex.

Partners at Wall Street firms who bring in good deals are said to "eat what they kill" come bonus time. When a company reveals its finances to another, it "opens the kimono" so the two sides can conduct an "open kimono transaction."

Some players are sticking with macho themes, spurning the alphabet and running with sports metaphors.

"We're not expecting this to be a hockey stick in the true sense of a hockey stick of a year at all," said Dominic A. Romeo, vice president and chief financial officer at pump products maker Idex, according to a transcript of the company's fourth-quarter earnings call in February.

Likening the downturn to a football game, Goldman Sachs CEO Lloyd Blankfein said in April, "We're probably in the third or fourth quarter," adding, "We're closer to the end than we are to the beginning."

Likewise, Morgan Stanley chief executive John Mack said in April that Wall Street was facing the most difficult conditions in 40 years, but he added that the global credit crisis might be "in the final innings."

Critics say those predictions struck out.

Bearish Theodore Forstmann, co-founder of private equity firm Forstmann Little, said in early July that the credit crisis was in its second inning.

However, John P. Hussman, president of mutual fund company Hussman Investment Trust, told shareholders in April that the economy was in the downturn's third inning, with each inning lasting three months.

M. Rae Resources had been posting a debate called "The Great Recession Game of '08. What Inning Are We In?" that pitted Jay Brew against the company's chief economist, Edmond Seifried.

They were at the top of the sixth when Seifried threw in the towel after grim July unemployment numbers, Brew said. "The game will be called," he said.

More like a beehive?

Some economists shoot down the metaphors their peers favor.

Writing in The Wall Street Journal in July, R. David Ranson, head of research at H.C. Wainwright & Co. Economics Inc., reiterated a point he made during a past downturn that the economy is not a "house of cards" but is more like a beehive.

"The future of the hive does not depend on full employment for all the worker bees," he wrote. "In fact, an accident can put many bees out of action without compromising the hive as a whole."

"Good metaphors," he said, "can help maintain perspective amid chaos."

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