Dear Friends of Parthenon:

Last November, and again this past February, Parthenon distributed economic advisories to provide our clients and friends with an analysis of the period and a future business forecast. In response to the positive feedback and requests we have received, Parthenon will now issue these perspectives monthly. Each mailing will include:

• Economic Forecast Summary - a brief summary on the economic changes during the month and the impact on the forecast
• Economic Indicators - a chart consolidating and tracking key factors impacting the economic forecast
• Economic Details - several additional charts with further detail tracking the various forecast scenarios, the variation from the Blue Chip forecast, etc.

As is always the case, we welcome your comments.

Best Regards,

William F. Achtmeyer
Chairman and Managing Partner
The Parthenon Group
+1 617 478 2550 | www.parthenon.com

This past November, we provided you with both upside and downside scenarios in addition to a base case forecast for real GDP. We are now tracking more closely to our downside case.

In November 2008, as the pressures on financial markets intensified, the consensus outlook was a real GDP decline of 0.4% in 2009. Parthenon foresaw a deeper downturn (-2.1%) driven by weak exports. Parthenon rejected the presumption that our trading partners were not vulnerable and that they were mostly insulated from the liquidity issues facing US banks. The world economy is highly synchronized.

Subsequently, the world economy has performed even worse than our base case view. The Parthenon outlook as of May 2009 has real GDP retreating 3.1% in 2009. In addition, our revision incorporates a record-breaking decline in business equipment and inventories, as businesses reacted dramatically to falling exports and the 2008 consumer panic. Aggressive monetary and fiscal policies continue to make credit available and increase the money in consumers’ pockets. These are driving a rebound in consumer sentiment. The consumer, at least, has started to come back to life.

In comparing Parthenon’s outlook versus the Blue Chip consensus, you will see that while the consensus has generally been more optimistic than Parthenon’s 2009 outlook, it has recently moved into alignment with Parthenon’s view.