2020 Vision – A Matter of Responsibility?

The hand holding and back slapping warmth generated at the weekend’s 2020 soiree in Australia’s capital is not being reflected out in investorland it seems.

The philosophical debate of individual responsibility was reflected not in Canberra over the past few days, but through the sentiment of investors looking to the Government to help fix the damage the domestic share market has caused since late 2007.

Interestingly the ire of investors appears to be directly proportional to the southwards direction of their share portfolios since the November peak.

45.1% of investors who find themselves more than 20% behind where they were in November believe the Government has not done enough to address the liquidity issues in the market and subsequent dent to confidence.

38.7% of those who are down 15-20%, 37.6% of those who are behind 10-15%, 36.4% of those who have reversed 5-10% and 28.4% of those who are down 0-5% agree or strongly agree the Australian Government has not done enough to stop the rot that has globally put the US on the brink of recession. The sample was of 1,224 individuals.

In addition to the macro developments in the market, consumers are also turning on the regulators with almost 9 out of 10 respondents in a poll stating they don’t believe the likes of ASIC are doing a particularly stellar job in protecting investors.

The poll ran in light of the issues beset Opis Prime, Lift Capital and Tricom.

Meanwhile, in the UK the Bank of England has come under strong criticism after promising £50 billion (with the promise of another £50 billion) of public funds over the last few days to shore up the liquidity hole the banking sector, and particularly the mortgage sector of this, finds itself in.

However, the reaction of many of Australia’s investors is one of a situation they’ve been caught in rather than being exposed for holding overvalued stocks with unrealistic price to earning multiples.

Based on this, the issue of individual responsibility appears to have given way to a bigger systemic issue that goes beyond bricks and mortar investing but has more of an insidious impact on the confidence and trust in the whole system itself.

However I don’t think this was on the agenda or discussed by the 1,002 delegates speed-conferencing in Canberra over the weekend.