Good reading lads.One thing for sure is that we are around the halfway mark of the bust to boom to bust cycle - give or take a few years. The markets were crap early in this decade. There has been massive growth over the past few years which has been reflected in the market inceases. Usually rapid increases are followed by a period of rest where the market takes a breather - nothing new for any HC posters. So it is no surprise we have had another pullback - how long will it last? The biggest influence will be the 'self fullfilling prophecy syndrome' - if we all believe that the sub prime business will cause a downturn then it will and we will see further market declines, slower growth and perhaps a recession (IMO if we do have a recession it will be very minor and reasonably short duration. Share prices generally fall after interest rate rises. In OZ with more rate rises 7% term deposits will be common and with the temptation to cash up until the we are sure the weather is clear. In the US the opposite - falling interest rates should boost share prices but other worries (sub prime) are holding them back. So times are very uncertain at the moment. Be interesting to see what HC posters believe is in store for the next year or two. I have a feeling it would not take much to tip our housing over. Just need a couple more rate rises and a lift in unemployment, drop in overtime etc and we may see some problems. I am in the market for the long term so i will not be cashing up personal holdings. However as i am finishing up work 2nd quarter next year i have transferred my super to cash where i can get a minimum safe 6% pa. Because i have done that the market will probably fly ahead just to bend me over one more time.
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