A AIG effect

Describes the heightened public scrutiny attracted by banks and companies that receive bailouts and then splash out on luxury staff trips and pay big bonuses. The phrase is derived from the American International Group, which has pocketed about US$180 billion (S$275 billion) from the United States government.

B Bailout

The act of giving or lending funds to a failing company to stave off bankruptcy. Bailouts have never been so extensive or so concentrated as in the current recession.

C Credit crunch

The situation created when banks, uncertain about their financial security due to a sharp fall in the value of sub-prime mortgage-linked assets, cut their lending to one another. This resulted in fewer and more expensive loans and mortgages.

D Derivatives

A way of investing in a particular product or security without having to own it. Futures contracts, forward contracts, options and swaps are the most common types of derivatives.The value of a derivative can depend on anything from the price of coffee to the weather. They can be used as insurance to limit the risk of a particular investment.

E Export slumps

The debacle on Wall Street hit Main Street in Asia via a double-digit collapse in the region's exports, which look set to stay in negative territory.

F Fiscal stimulus package

A raft of measures used by governments to buoy their economies, usually involving cutting taxes and drastically increasing spending.

G Great Recession, the

An increasingly popular moniker for the current recession. At once a reference to, and marginally favourable comparison with, the Great Depression of the 1930s.

H Homedulgence

Indulging in home-based luxuries, such as gourmet groceries, in order to save money. Similar to the new phenomenon of 'insourcing', where people take on tasks they previously paid others to do.

I Iceland

The first country in the world to go bankrupt. 'I' can also stand for Ireland, possibly the next country to do so. As it happens, 'I' also represents investment banks, many of which have gone under.

J Joblessness

Unemployment is threatening to touch record highs in the US and Europe. Some predictions are for 10 per cent unemployment in the developed world by the end of next year. Asia is worried too: Singapore has concentrated its fiscal efforts this year on protecting jobs.

K Keynesianism

The theory developed by economist John Maynard Keynes, who believed the state could stimulate demand in a stagnating economy by, for example, borrowing money to fund public works projects.

L Liquidity trap

The dreaded situation that occurs when a country lowers its interest rates to - or near - zero, but fails to stimulate economic activity.

M Mini-Madoff

Bernard Madoff, the mastermind behind the largest Ponzi scheme in history, has now lent his name to all pyramid scams that involve fraudsters rewarding existing investors with money obtained from new clients.

N Naked shorts

A naked short is an illegal form of short-selling, in which an investor borrows a share so that he can sell it, in the hope that prices will fall and he can buy it back at a lower price. He then returns it to the original owner and pockets the profit.

O Obamamania

The glimmer of hope for investors gripped by the recession. The phenomenon blindly assumes a new US president can restore a severely ill economy to full health. On the flipside, Obamabears - as recently christened by the Economist - appear to have lost all faith in Mr Barack Obama's remedies.

P Paulson, John and Henry

Their fortunes in this recession could not be more different. Mr John Paulson made billions by betting that sub-prime mortgages would collapse, allowing him to accomplish in this downturn what billionaire investor George Soros achieved in the 1990s' Asian financial crisis. Whereas former US treasury secretary Henry Paulson was a runner-up for Time Magazine's Person of the Year last year for becoming 'the face of a crisis that Washington just can't solve'.

Q Quantitative easing

The act of central banks creating money out of thin air by printing new notes, so as to increase liquidity, avert deflation and encourage banks/people to borrow and spend - but it risks fuelling inflation.

R Recessionista

Someone who finds affordable and inventive ways to be stylish in the downturn.

S Shovel ready

Construction or infrastructure projects that can be started as soon as funding is received, thereby maximising the efficiency of stimulus spending and boosting job creation.

T Tarp

Troubled Asset Relief Programme, the US government's US$700 billion bank rescue plan originally aimed at purchasing toxic assets. Now there is an improved version - Tarp II - which refocuses on buying preferred shares in banks so as to boost their capital.

U Unsecured debt

A loan that is not backed by any asset, which means that if the borrower goes bankrupt, the lender has only a limited claim on his estate. Companies issue a form of unsecured short-term debt called commercial paper to finance their day-to-day activities. And when lending dried up at the height of the credit crunch last year, the US government had to step in to buy their commercial paper and get credit flowing to companies again.

V Vacations

Once a means of fulfilling wanderlust, these expensive overseas trips are increasingly being ditched in favour of 'staycations', where cheaper holidays are taken nearer to home.

W Write-down

Reducing the book value of an asset to reflect a fall in its market value.

X Xenophobia

Protectionism is on the rise as governments come under pressure to turn inwards and boost their economies at the expense of others.

Y Yen strength

One of the main currency trends of the global recession has been the appreciation of the Japanese yen. Its value has been boosted by investors, who borrowed cheap yen to buy overseas assets, disposing of these assets and buying yen to pay back their loans. But the yen has started to slide recently, suggesting that this form of deleveraging is ending.

Z Zombie bank

A bank with negative net assets but continues to operate - thanks to government intervention.

This article was first published in The Straits Times.