I've been following this whole economic meltdown thing for months now and in the space of one month the Australian benchmark stock (The ASX200) has gone from around 6700 points down to a measly 3700 or so. Like the rest of the world, our stocks are going up and down like George Michael's pants, and everything's going absolutely insane. It's quite annoying because Australia has had no real reason to enter into economic crisis, it was investors freaking out and panic selling which caused everything to start falling for us down here. We were only 1 cent off at one point of being $1 Australian for $1 American. That was amazing seeing as for years we've only been trading $1AUD for $0.69-79USD. And then we fell horribly, down to a measly $0.59USD. And even though our government has put into place a $10.4bn "economic stimulus package" to make sure everyone has a little extra cash for this Christmas, our stocks fell horrendously last week with the Dow Jones. So let's just hope that stocks continue rise during the day.. http://www.news.com.au/business/story/0,27753,24575292-14334,00.html
Even through Australian banks and investments companies may not directly invest in the bad mortgage back securities they are indirectly effected. It is a global market now and all the economies are intertwined. Also Australia has a number of mining companies that are in the commodity business, such as gold mines. When the world stock markets go up and down they effect commodity prices which effect mining stocks.
Yeah, Australia's backbone to our economic growth has been the resource sector. But our financial system was considered to be rock solid, and it still IS, but many funds have been frozen..
Even though this may be the case. Australian banks are relatively small so they more likely than not they get capital from banks around the world. So if the banks in Europe, Asia or the Americas do not lend its going to effect Australian banks.
Don't worry . When people worry, this is what happens. I like to check the stocks, but I know that it's going to bounce back no matter what; it always has and always will. We just need a lot more regulation in the corporate area.
