Last friday morning as I watched our stock market freefall I thought this is a good to have a coffee.
What an interesting week we had.
Sunday, the government announces its proposed tax changes including the mining industry super profits tax, which on Monday, had a negative impact on our share market.
Tuesday, a widely predicted interest rate rise of 25 basis points.
Wednesday to Friday, contagion fears of Greece’s sovereign debt reaches our market.
Friday, some economists are talking of an interest rate cut.
I personally don’t think a rate cut is likely, but rather, one could expect the RBA to leave rates on hold for the next few months.
Fear is an uncontrollable phenomenon on the markets. Whilst some nervous investors dump stock it also a great buying opportunity, my brother (a day trader in Melb) reminded me today.
It is interesting to note that Australia has one of the highest official interest rates in the world. In the euro zone, rates are at 1%. In the US the rate is 0.25%.
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