The Conference Board has taken the economy’s temperature, and the reading is not encouraging. "The recent decline in gas prices isn’t enough to overcome all the negative momentum that’s been building up through the spring and summer,” said CB’s Ken Goldstein. “The Leading Index points to slow growth through the rest of the year, and possibly an economy grinding to a halt ..A few months ago, there was some discussion about a second-half recovery. If there’s a second-half recovery, it’ll be the second half of 2009."
Unfortunately, CB’s take was seconded by Fed chief Ben Bernanke. "Although we have seen some improved functioning in some markets, the financial storm that reached gale force…has not yet subsided, and its effects on the broader economy are becoming apparent in the form of softening economic activity and rising unemployment," he told attendees of an economic conference. The economy is caught in an unusual crossfire, suffering slow growth and inflation at the same time, leaving very little in the regulatory toolbox to execute a fix.
RBR/TVBR observation: The clear message is that we’re on our own. Street smarts and ability to improvise will have a large role in determining which companies come out on the other end of this downturn intact.