Any hope of the Paulson bailout or the China stimulus package saving the world has faded with news that Germany has officially entered a recession.

Germany is the driver of the European economy so the ripple effects will be massive. Add to that the forecast from the OECD that Japan, Europe and the US are in for a massive slowdown. And the world is unlikely to recover before 2010 or 2001, warns Morgan Stanley Asia Chairman Stephen Roach and Nouriel Roubini.

Earlier this year, I did a blog entry looking at what "letter" shape the recession would take. Would it be a "U", "V" or "W"? If these predictions are right, we are looking for a long and hard "L" shaped downturn. And we are only at the beginning.