/BBRG: Sadly, One Letter Perfectly Captures the Recovery

BBRG: Sadly, One Letter Perfectly Captures the Recovery

Sadly, One Letter Perfectly Captures the Recovery
I used to think it was silly using the alphabet to describe the economy. One letter seems to work.
Bloomberg, September 2, 2020





In the aftermath of the Great Financial Crisis, I received an extremely silly email: It was from a TV show booker who, during the early days of the 2009 recovery, asked: “What single letter would you use to predict the recovery?”

Aghast, my response noted there are 26 letters which humans, unlike other animals, could use to form words and even sentences to express complex thoughts. Rather than dumb down something as intricate as the economy to a hieroglyphic cave painting, why not use the full majesty of the English language to communicate nuanced ideas? Respect your viewers’ intelligence, use prior recoveries as an historical guide, acknowledging all the while our inability to forecast the future. Why, we could even add numbers to those words, explaining probabilistic assessments and possible future outcomes – so superior to predictions!

The email response was priceless: “So, no letter?”

I was reminded of this courtesy of the many recent discussions on “U” and “V” and “L” and “W” shaped recoveries. My favorite is the “Nike Swoosh” recovery – which may very well be a letter somewhere in the Milky Way galaxy, but here on earth represents instead the triumph of brand marketing rather than an alphanumeric example.

“K” has since shoved aside of these discussions.1 If you were to describe the 11th letter in the English alphabet to someone who has never seen it, you would note it is distinguished by a bold vertical line, from the midpoint of which begins two rightward traversing lines, one slanting 45 degrees upwards from the horizontal, the other, 45 degrees downwards.


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1. The earliest reference I could find to a K-shaped recovery was April of this year.




I originally published this at Bloomberg, September 2, 2020. All of my Bloomberg columns can be found here and here



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