In 2008 Europe AND United States were in a deep recession, we survived relatively unscathed in comparison. With the exception of knee jerk follow the leader drop in our Market. It's a matter of fact on how our market performed over the following 2 years or so after that.
This time round, even if Europe implodes it is estimated by economists to be a mild recession in Europe or better than 2008. Meanwhile the United States is seeing their stats rise to some degree.
We are also in a much better position exposure wise, should Europe fail, than in 2008. To a large degree we have factored in a Euro crash in present SP prices.
Not that is likely to matter, as our market still follows the leader and would take a further hit in any case although it is not really applicable to such a degree, but that's common sense which the Market rarely follows. That information is not new though.
IMO the fear of such occurring has actually been worse than if parts of Europe imploded. I read recently (sorry couldn't find it) that present estimates are 65% that the majority (Europe) will muddle through over the next couple of years, 35% chance that some minority will fail.
Brokerage firms are not only happy to see the volatility continue, I even think some encourage it with doomsday rumours (no proof just a growing suspicion) as they are making a killing in fees. I won't even get started on the shorting and computer trading.
On the other hand, those in for the medium to long term, it's a great time to buy blue chips, go DRP and stick them in the draw for a year or two.
Our banks are strong, our mineral exports are strong, the majority of major retailers are making a profit, albeit reduced. The manufactures not so well, but we have been pricing ourselves out of the export market for some time now and with Free Trade Policies cheap imports are no surprise. Australian personal debt is also reduced.
As the subject heading says, our markets are not reacting to indicators, but that is rarely the case anyway.
My 2 cent diatribe has now decided to go enjoy the day, cheers.
As always DYOR before investing in anything and good luck.
