*******************Hi Kenneth,
I think the scaremongering is over-cooked globally at the moment, but that there is a small risk of a US recession sending the stock markets backwards for a year or two tops.
Cheers,
Michael.
Hi Michael,
1. As newspapers generally like to "sensationalise" its reports for higher sales figures, I do agree with you that "the scaremongering is over-cooked globally at the moment", to a certain extent.
2. This is especially so when there is a lot of bad news coming out from the various markets about the same time and the market sentiments are fast starting to change and becoming more bearish in recent times.
3. However, it does not alter the basic fundamental picture from emerging regarding the slowing down economy and the related (slowing) housing markets in USA, in UK, Spain, in New Zealand etc as well as the market's increased risks and uncertainities caused by the recent US Credit Crunch Crisis, the weakening of the US$ Currency and sudden increase in the oil and gold prices etc.
4. Collectively, these negative news can feed on each other and cause market sentiments to change significantly within a short period of time, leading eventually to a "self-fulfilling" prophecy.
5. Whether Australia can be effectively be "insulated" from the current financial crisis and escaped unscathed again as in the past, will depend much on the quality of its national leadership as well as the effectiveness of the RBA under Glenn Steven's new Chairmanship.
6. For your further comments and discussion, please.
7. Thank you
Cheers,
Kenneth KOH