Economics

When and where will the rate hikes stop

You can hear it. The economy is slowing. You can hear it as business people sit around cafes comparing notes, tallying up ways their companies can make cut backs: air fares, new stgelopments, expansion plans… even stationery. At home, families are looking at areas to slash household spending: entertainment, petrol, holidays, whitegoods, utilities, groceries… The…

Triple threat to US economy – what it means for Aussie investors

Twenty years ago, when the 1980’s “greed is good” bubble burst, Australia followed the US in a long slide into recession. Indeed, when Wall Street slumps and the US economy wobbles, Australia has invariably spiralled downward also. It happened in the mid-1970s on the back of the OPEC shock, and it happened in 1929 with…

Sub-prime what?

Few would have predicted the tidal wave that hit markets globally last week, sending global indices and currencies – like a scattergun – in unpredictable directions. The eye of the storm was US sub-prime mortgages, an area of the market that, until recently, few investors in Australia even knew existed. Spooked by fear of a…

Trouble in China has investors guessing

Australian investors, aware of the importance of China for continued bullishness at home, have been keenly watching the state of play in China – so news late last week that China’s flagship lender, Bank of China, as well as Industrial and Commercial Bank could face significant losses as a result of the US sub-prime crisis…

Share correction insights

Well before the latest Australian share market peak and correction, serious market analysts were predicting a major reversal. So as corrections go this one should not have come as a surprise. It has been widely anticipated and the genuinely smart trading money has been well prepared through strategies like regularly taking profits or setting stop…

Is the big Asian sharemarket boom over?

Asian stock markets have taken a hit over the last quarter thanks to the sub-prime crisis, but analysts believe the fundamental story remains optimistic and Australian investors should not turn their backs on opportunities there. Looking at the region as measured by the MSCI all country Asia ex-Japan index, equities were down 17.6 per cent…

Have we bottomed?

The worst of the credit crunch is behind us, the worst of the economic down-turn is ahead of us, and it is only a question of whether the worst of the economic down-turn has already been fully priced into equity markets. I believe a global recession or worse is already priced, which means equity markets…