"America sneezes and the world catches cold!" - Direct effect?
By James72
@James72 (26790)
Australia
January 23, 2008 4:04am CST
The last week or so has seen a major down turn in global markets throughout the world. It is only from today that many are starting to bounce back. It has been believed by many financial analysts that the US economy did not have as much of an effect on global markets as it once did; especially in regions such as China and Europe; but this has been proven to not be the case.
Do you feel that the global downturn in line with the US market has occurred as a result of direct effects? Or it is a mentality that still exists outside of the US which in turn creates fear and therefore mass exits form local markets?
Personally I feel it is more mentality influenced for now rather than a direct effect; but I would be interested to know if anyone feels the same or differently? Please comment.
2 responses
@raijin (10345)
• Philippines
24 Jan 08
I'm not much knowledgeable in global marketing, but I do fell the effect of it. Philippines has now become a third-world country, very different of what it was before or where it should be standing right now. I guess we are still too dependent on American products, too much colonial mentality and always trying hard to catch up with the outside world with less effort of strengthening our very resources.
Indeed, the effects for us are too much that we are just hanging for our dear lives..
1 person likes this
@James72 (26790)
• Australia
24 Jan 08
I am fortunate enough to have lived outside of Manila for a year and a half so can relate to what you are saying. Filipino's are VERY America minded on a lot of levels not even related to markets! I was constantly asked if I was American myself! It is a beautiful country with its own share of problems for sure. Thanks for responding.
@Tetchie (2932)
• Australia
24 Jan 08
Hi James, I've not looked at my share portfolio cause I don't really want to know how much I've lost. It's a paper figure afterall unless I need to utilize those funds - right?
I think the global downturn has a fair bit to do with thinking and fear as you say. The US is becoming less of an economic giant, but obviously not small enough yet. In the next 6 to 10 years the EU will give it more of a shove and also China and Asia as a whole. It is so ridiculous that a country (say Australia for eg) can have a very strong economy yet be held to ransom by the US economy. The more we invest in other countries the safer we will be. A country should not put all it's eggs in the US market, otherwise it will go down the toilet.
1 person likes this
@James72 (26790)
• Australia
24 Jan 08
Hi Tetchie; long time no speak! Well your portfolio if down will certainly even out or bounce back up eventually! This is the beauty of the stick market. It's all cyclical. I agree 100% that when it comes to investing in markets, diversification is key; you have a far stronger chance of hedging your bets this way. China and the EU will most definitely gain more influence over world markets over the coming years. Thanks for responding.
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