This is your captain speaking. We have been saying throughout the flight we are going to have a soft landing in the United States. Well a few tyres have unexpectedly blown and the landing might become, er, we hate to say it, but hard. Do not worry though. Your lives are in safe hands. Alan Greenspan is leading the crash crews in Washington waiting to hose the plane with liquidity. With tongue firmly in cheek, that could about sum up how investment banks have been dealing with a United States economy crumbling at a pace which has had them scrambling to catch up. Merrill Lynch, for example, has shaved its forecast for this year's US growth three times since December, winding it down from 3.7 per cent to 2.5 per cent. But Merrill is refusing to let the dreaded 'R' word - recession - pass its lips. It even thinks Mr Greenspan is being a bit bearish when he said US growth was now 'probably very close to zero'. Salomon Smith Barney has also had to scale back its rhetoric. Late last year Salomon's global strategist Kim Schoenholtz did not even think there would be a soft landing. It would be 'just a touch down', he said. Now the US investment bank is hanging a 1.6 per cent number on US growth this year, which would, by rights, put it firmly in the hard-landing camp. While the numbers are getting harder, investment banks are still taking a softly softly approach. By a rough rule of thumb a growth rate of 3 per cent or above would be considered a soft landing for the US economy from its expected flyaway pace of 5.1 per cent last year. A growth rate of 2 per cent or below is considered a hard landing, between 2 per cent and 3 per cent has been dubbed a rough landing. And, of course, negative growth - a recession - would be a crash landing. ING Barings set a soft as silk 3.6 per cent projection just before Christmas but two weeks ago shifted to a harder-looking 2.8 per cent landing. Asia chief strategist Markus Rosgen, however, 'assigned a probability of less than 50 per cent' that even the lower number would be realised. His landing scenario is slightly different. Anything above 2.5 per cent would be soft in his book. JP Morgan latched on to yet another way of viewing things. Last year it coined the phrase 'long landing'. 'You have a whole year of slowing, a long landing,' said an investment banker who read the research. 'It's all a bit of BS.' On December 28 JP Morgan did finally call a spade a spade when it cut its projection for US growth to 1.8 per cent and admitted a hard-landing was in store. There are still more ways to land an economy. 'My favourite was a soft landing with hard edges,' said Stewart Aldcroft, managing director at Investec Asset Management. 'Everybody in the US is petrified to talk about the 'R' word. They think that if they talk about it, it will actually happen.' One or two investment professionals will privately confess there is a conspiracy of bullishness highlighted by Wall Street's semantic dance of the seven veils around the idea of a hard-landing or recession. Economists and strategists feel obliged to put the best public gloss they can on their projections because they want investors to keep buying stocks to ensure their inflated salaries and fat bonuses keep rolling in. They also have to face the responsibility for the unpleasant effects an unduly bearish call can bring. 'No one wants to make the market spin out of control,' said one investment banker. The bullish front put on by Wall Street in the face of the US economic slide could be explained in another way, said Albert Edwards, global strategist at Dresdner Kleinwort Wasserstein. The record 10-year expansion in the US economy and the accompanying bull run by stocks had confounded the bears and led to them being shaken out. 'During the Asian crisis there were calls for a US recession. A lot of people paid for their bearishness with their jobs,' Mr Edwards said. There is no need for fancy theories to explain what has been going on, economists have simply been making honest mistakes. The downturn in the US economy has been so swift it has defied conventional forward-looking analysis which relies on extrapolating trends in key indicators. In fact economics works better analysing what has already happened in an economy than working out what will happen. 'The man in the street probably puts too much faith in the economists' and strategists' ability to read the tea leaves,' said Ian McLennan, the Asian strategist at UBS Warburg. To some degree the debate has moved away from the type of landing the US is going to have to how its recovery will look. This time the terminology is in letters. Optimists - and most of the big investment banks again fall into this camp - are looking for a rapid or V-shaped recovery for the US this year. The V-shapers think the economy will hit bottom this quarter and growth will begin re-accelerating in the second quarter. JP Morgan sees zero growth this quarter and 1.5 per cent in the next, rising to 3 per cent by the final three months. More pessimistic observers, definitely in the minority, talk of a U-shaped recovery with the US economy bumping along the bottom for a few quarters before beginning a recovery. The remaining hardy bears warn of the possibility of an L-shape slump in the US, similar to that suffered by Japan, when red-hot growth in the 80s gave way to a decade of stagnation. Mr Greenspan was very much aware of the danger, said leading bear Stephen Roach, chief economist at Morgan Stanley Dean Witter. Both men have hinted at the economic trauma which can arise when consumer confidence dies, as it did in Japan in 1990. 'Should the loss of confidence persist, a Japanese-style L-shaped downturn could well ensue - driven by the potentially lethal interplay between a capital-spending collapse and wealth-induced capitulation of the American consumer,' Mr Roach wrote. The V-shapers base their case on the assumption aggressive rate cuts by Mr Greenspan will kick-start growth. What they do not say is that the rate rises he presided over from June 1999 to May last year took more than a year to be fully felt. Many economists predicted a soft-landing for 1999 and then had to shift their forecasts to last year, only to be proved wrong again. Economists who were overly optimistic about the pace at which Mr Greenspan's rate rises would slow the economy are now being optimistic about how quickly his rate cuts will have the reverse impact. Why should we believe them? To put it another way, after record US economic expansion, would it seem intuitively right to expect only a momentary pause before growth resumes? Bears such as Mr Edwards think not. 'The market is expecting that after the biggest bubble in history we can unwind the excesses in a two-quarter dip,' he said. 'It is ludicrous to think so.'