And according to the Westpac Melbourne Institute survey we're feeling more or less confident depending on which socio-economic group we come from. Either way those levels of confidence will play a critical role in just how quickly the economies will recover, and even US Federal Reserve Chairman, Alan Greenspan, reveals he's not exactly certain how the consumer mood will pan out in the United States. It is difficult for economic policy to deal with the abruptness of a break in confidence. There may not be a seamless transition from high to moderate to low confidence on the part of businesses investors and consumers. In his address to the US Senate Committee overnight he suggested that although the risks are on the downside, it's unlikely the US will enter recession.
Firms appear to be acting in far closer alignment with one another than in decades past.
The result is not only a faster adjustment but one that is potentially more synchronised, compressing changes in to an even shorter time frame. This very rapidity with which the current adjustment is proceeding raises another concern of a different nature. While technology has quickened production, adjustments human nature remains unaltered. We respond to a heightened pace of change and it's associated with uncertainty in the same way we always have - we withdraw from action, postpone decisions and generally hunker down until they renew more comprehensible bases for acting emerges. Building material maker Boral Limited is a good barometer.