The abrupt onset of such implosions suggests the possibility that there is a marked dividing line for confidence. When crossed, prices slip into free fall -- perhaps overshooting the long-term equilibrium -before markets will stabilize. But why do these events seem to erupt without some readily evident precursor?
A fair amount depends upon international events. If global growth is in line with most forecasters’ central outlook, it is quite possible that confidence, both overseas and in Australia, will be sustained at a higher level than it has been in recent times.