DOES THE USA FINANCIAL CRISIS AFFECT SOUTH AFRICA? September 16, 2008
Posted by frostygirl in News.Tags: banking, financial crisis
4 comments
The above question was directed at a South African financial advisor today in one of our local newspapers and the answer was: “No.”
It amazes me to see this type of response, no wonder the financial world is in such a mess!
It is obvious that the crash of Lehman Brothers will affect our financial market. Why do they have to lie to the general public? It certainly will not help the general public because if they listen to these lies and continue to bury their heads in the sand they will wake up with a big shock when everything comes tumbling down around them.
Greed is the underlying cause of the present financial crisis in the world, the huge organizations wanted to please their shareholders by posting huge profits every quarter and while chasing these huge profits they forgot to take the usual care to ensure that their “book” was sound and that sound financial principles were applied.
The USA and the UK are in a recession and many financial institutions in both these countries are in serious trouble and the big insurance companies who underwrites or acts as re-insurers are also experiencing a huge financial crisis (for example AIG).
What effect is this going to have on SA? An enourmous effect because our economy and financial markets are closely linked to theirs and it will certainly cause our shares to drop as can be seen on the All Share Index today which dipped below 25000 for the first time in a long while today.
The whole world is in for a very rough ride, we have seen nothing yet, watch the Asian markets tumble sharply now because they are going to feel it very badly due to the fact that they are mainly exporters of goods and are reliant on their overseas buyers.
My advice? Pay off your debts fast, cut up your credit cards immediately, stop spending on luxury items and start saving. The future is very uncertain so many jobs are being lost so do not get complacent and think it cannot happen to you, it can!
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