US market collides with Australia by Claudia Sonea

There is nothing surprisingly in the fact that US economy is on the verge of recession or that lately the stock market has plunged severely and even the lowest expectation might not be fulfilled by the fourth quarter reports. Tuesday session on Wall Street ended badly for most of the stocks and even for Countrywide Financial which is thought to be forced to file for bankruptcy. As it is, big banks, ANZ, Westpac, National Australia Bank and Commonwealth Bank that were part of a global syndicate of 40 banks that lent troubled US mortgage group Countrywide Financial 11.5 billion US dollars last year plunged on the market. The Australian newspaper presented the situation of Wall Street and caused a chian of reaction that led to the four banks' exposure to the US subprime crisis at one billion dollars (884 million US). Analyst contradicted the rumors saying that the fears were exaggerated and the loans represented an insignificant part of the Australian banks' overall exposure. They showed that ANZ had lost 24 cents to 26.11 dollars, National Australia Bank fell 27 cents to 35.32 dollars and Westpac lost 36 cents to 26.60 dollars, while Commonwealth Bank gained 11 cents to 56.95 dollars in late trade. Peter Rice, a banking analyst at stockbrokers BBY Ltd. Stated that the Australian banks have minimum losses despite the jitters that US subprime market and that it is astonished by the exaggerated reaction, mostly because the major Australian banks are actually developing very well due to the fact that they increased net interest rate margins for the first time in a decade. It is the most obvious example of how panic can be created on the stock market by the rumors spread through the media. Stay connected and enjoy your surfing!

related story: http://uk.news.yahoo.com/afp/20080110/tbs-australia-economy-banking-5268574_2.html

by Claudia Sonea for PocketNews (http://pocketnews.tv)

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Edited by: Katarina Zerzanova