Here is coverage of newsworthy items from the global media that affects Australian finances and markets:
> Yet another example of Australia leading the world in dealing with the global financial crisis. Apart from having the most robust banking system in the world, the government and regulators have been on the ball by being the first to announce an interest rate cut and over the weekend they said they will Guarantee Bank Deposits for Three Years. Between A$600 billion ($US 386 billion) and A$700 billion of deposits are held in Australia at any one time. A great step towards restoring confidence in Australian markets. Now if only the world will follow the Aussie lead.
> For many of us who only heard about the 1987 crash through movies or reading about it, we got the unfortunate experience of living through an even more horrendous series of crashes - much worse than the October 1987 market crash. About A$800 billion has been wiped off the value of Australian shares in the past five months as the collapse of the U.S. subprime mortgage market triggered credit markets to freeze. The benchmark has tumbled 42 percent from its Nov. 11 peak. Ouch. My superannuation balance looks like it did in 2001.
> Get a recap of the financial crisis in this pictorial review. Everyone around the world is worried about the impending global recession and fear about savings, the job market and about being able to afford retirement. As a person interviewed in the story describes the current fall in asset values, "It’s like being in a hospital bed and watching yourself dying. Whatever the bottom is going to be, I wish it would just get there. It’s the every day, watching the blood drain out of it, that’s hard to take.”
> The Australian dollar faces more pressure after falling sharply to a five-year low over the past week amid the global economic crisis, analysts said.. "A softer outlook for both global growth and commodity prices and continued weakness in equities will weigh heavily on the Australian dollar in coming weeks," said ANZ economist Alex Joiner. A combination of steep falls on the Australian stock market and low liquidity conditions had been the main contributing factors to the Australian dollar's fall, said CMC Markets foreign exchange dealer Tim Waterer. Whatever the cause from a US perspective, we are 30% poorer thanks to the exchange rate differential. However the outlook is better: "If you start to see a wee bit more stability come through in Asian equity markets, the chance of a bit more stability in the Australian dollar is actually quite high,'' said Robert Rennie, chief currency strategist in Sydney at Westpac Banking Corp. "Central bank easing at some point should begin to have a beneficial impact on risk assets and the markets.''
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