The emergence of a new economic environment
Initially confined to a financial crisis, the U.S. economy officially sank into a recession last December and is part of broader fun-damental economic distress globally.1 Even before experts officially recognized the recession, 62 percent of CFOs and senior executives said they were pessimistic or very pessimistic in their outlook for the U.S. economy and 57 percent believed it was already in recession.2 Companies are placing unprecedented constraints on access to credit and capital. Meanwhile, falling demand and increased price sensitivity can be expected as consumers and enterprises cut back. In this new environment, disruptions are likely in supply chains and arrangements with partners and customers. As firms fail or are sold overnight, industries such as banking, financial markets and automotive are quickly restructuring. Yet, despite the turbulent times, Warren Buffett continues to believe in the long-term prosperity of sound companies and predicts most will be setting record profits over the longer term.3 Those that survive and thrive will focus on maintaining a strong franchise, sticking to fundamentals and limiting exposure to unnecessary risk. At the heart of this new economic environment is a need for greater transparency to manage short-term financial matters, review and validate or reset company strategy, reprioritize pro-jects/investments, interact with the board to assure priorities are correct and take decisive actions. To read the full report, download the PDF file at the top of this page References
1 Andrews, Edmund. "Officials vow to act amid signs of long recession." The New York Times. December 2, 2008.
2 "3Q 2008 Economic Outlook Survey." AICPA Financial Management Center.
3 Buffett, Warren. "Buy American. I Am." The New York Times. October 17, 2008. | 
