Markets

The markets are melting down again. The ASX 200 fell $33 billion, or around 3 per cent yesterday, on the back of more European scares. As you’d imagine, people like CommSec Chief Economist Craig James were rather busy yesterday. But we managed to grab him for a few quick questions.

What’s the best case scenario?
The best case scenario is that the Italian Government comes out with concrete proposals to address its budget situation. Another positive proposition would be instead of calling elections for early next year the Government or the Prime Minister simply resigns and a new government is formed. So anything that would provide a degree of confidence to the markets – at the moment we’ve got nothing.

And the worst case scenario?
It could be anything. It could be countries deciding to exit the Eurozone. It could be continued silence from the Italian officials on dealing with the situation. One of the worst case scenarios could be a country actually physically defaulting on its obligations. So there’s a whole range of negatives out there. There’s no one specific bad scenario; there are a number.

Continue reading "Punch Q&A: Should we panic over European meltdown?" »

Share market panics are scary and absolutely no-one knows for sure where they’ll end up.

The smarties will talk about buying bargains now because Australia’s future is more linked to China than the US or Europe, and how our economy is much better placed to ride out any financial storms than the rest of the world.

They’re right. BUT share market panics are not logical. They’re driven by emotion and almost impossible to predict.

Continue reading "Ignore the crash, and have some beer and skittles" »