It is becoming increasingly obvious that the US economy basically fell off a cliff in September. Personally I think the US economy was already in recession but it looks beyond any doubt now. However, since the third quarter ended in September, 3Q08 GDP and earnings will only be a prelude to how bad things get in the fourth quarter. Today Walgreen gave a hint of what is to come:
Walgreen drops bid for rival Longs Drug
Walgreen said it was withdrawing its offer since Longs had refused to hold constructive talks. It also noted the "substantial deterioration" in the outlook for the U.S. economy over the past few weeks. The global credit crunch has forced government-led bank bailouts and cast doubts on the strength of consumer spending.
"We do not believe it would be in the best interests of the shareholders, customers, or employees of either Walgreens or Longs to allow this situation to remain unresolved for an extended period of time," Walgreen Chief Executive Jeffrey Rein said in a letter to Longs.