May 17, 2012

What lurks beneath stock market fears

Australia -- already a proxy for China's growth trends -- could be more vulnerable to a potential second global banking crisis than we normally imagine, says Robert Gottliebsen of Business Spectator.

Last night I found myself being driven to the airport by a Greek taxi driver. Greeks these days often talk about money and this particular driver had a father in Greece with a large sum in a Greek bank. He asked my advice. I don’t give investment advice but I could not resist explaining that given the clear possibility that Greece would leave the euro, the money might be safer in an Australian bank.

I hope I did not trigger a run on Greek banks that leads to a wider banking problem. I am jesting, but it underlined to me just how fragile the current European banking situation is. Australia is always going to be a proxy for China’s growth trends and that is a big force in our stock market moves. What we have not always appreciated is that Australia could be more vulnerable to a potential second global banking crisis than we normally imagine.

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4 thoughts on “What lurks beneath stock market fears

  1. Suzanne Blake

    Let Greece fall, they have had enough time and it will be a lesson to others.

    No more time, let them collapse.

  2. Mick S

    Yeah, because after all it was those awful Greek people that got us into this mess, right?
    Nothing to do with banks and investment houses gambling with funds.
    The banks lost, the governments bailed them out, and now its up to the ordinary people to bail out the governments.
    Its only fair.

  3. Caruben

    On’ya Pauline. Oops I mean Suzanne.

  4. wintermute000

    Those who advocate a greek default like its something straightforwards obviously have no idea of the possible fallout. Its not about punishing the greeks at this stage, its how to get out of this mess intact.

    Not saying its possibly the least bad of all the terrible options, but please do some reading before commenting. Here’s something to get you started.

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