Yes, we're in for a short, sharp shock. Australia is on course for its first official recession in almost 18 years, according to a growing number of analysts.
The investment bank JP Morgan yesterday predicted plunging world growth and commodity prices would spark a short, if shallow, recession over the six months starting this month.
Economists at Goldman Sachs JBWere says Australia is already halfway through an official recession - defined as two consecutive quarters of negative growth.
The predictions came as the dollar gained a foothold above US64 cents yesterday and the local sharemarket recovered 1.3pc on speculation the US Federal Reserve will slash its official interest rate in an effort to avoid global recession.
However, the reprieve is not expected to last.
JP Morgan said yesterday it expects a million Australians will be jobless by the end of the decade as businesses shelve or cancel investment plans.
There have been seven recessions in Australia since 1960.
But this recession is not expected to be as long or as deep as its predecessor in the early 1990s, which ran for a full year.
This time the economy will be assisted by the stimulatory impact of a falling dollar, the potential for the Government to run down its budget surplus even further and the Reserve Bank's ability to slash interest rates.
But although this recession may be shorter than the last, JP Morgan expects the economy will take longer to recover because of the global financial crisis.
"Many managers … shell-shocked by the global financial crisis and the lingering impact of the global recession, may be reluctant to restart stalled investment projects, which limits the extent of the rebound," said the chief economist at JP Morgan, Stephen Walters.
Further action by the Government may be needed, he said.
"The growing risk … is that distressed households, whose indebtedness is at an all-time high … use the windfall to repay debt or boost precautionary savings, rather than rush to the shops."
Tim Toohey, chief economist at Goldman Sachs JBWere, said a Christmas recession was now likely.
"Unfortunately, lags through to the real economy from a falling currency, lower official interest rates and fiscal stimulus will likely be too late."
Markets expect the Reserve Bank will continue cutting interest rates by about a further 1.5 percentage points over the coming year.
Meanwhile, not one frozen mortgage fund has publicly declared it will take up the Rudd Government's challenge to become a bank to gain access to the Government's deposit guarantee.
At least one cash management trust is rumoured to have expressed interest to the Government, but none has come forward to identify itself yet.
The Assistant Treasurer, Chris Bowen, said several funds have indicated to the Government they are "actively pursuing" the option of becoming a bank.
"We wouldn't have done this unless they indicated to us that they thought it would be helpful," Mr Bowen said.
However, a spokesman said yesterday he was unable to name names, because this would be "market sensitive".
Yesterday, the Opposition Leader, Malcolm Turnbull, stepped up his attack on the Government for what he says is its bungled handling of the deposit guarantee.
He said the plan to help funds transform into banks would not help pensioners with money frozen in mortgage funds.
"This is not something that can be accomplished quickly … it involves raising a lot of capital and so hence it isn't a silver bullet by any means," Mr Turnbull said.
The Treasurer, Wayne Swan, accused Mr Turnbull of double standards in saying the Government had "over-hyped" the need for a deposit guarantee, while withdrawing his own private funds from the managed investment sector.
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