Economists will give all sorts of reasons why Australia wouldn't necessarily follow the US into a recession. But globalisation means that everything is connected to everything else almost instantly. For better or worse. So far, what is clear is that the confidence that pushed the small US investors unscathed through the Asian crisis three years ago has now turned into a debilitating attack of nerves that is proving contagious. Just as the promise of the good dot com times was exaggerated, so is the threat of the bad tech-wreck times.
Fear can still become self-fulfilling.
Consumers suddenly closing their wallets leads to businesses losing their profits and cutting back on investment and jobs. So maybe it won't be as dramatic as that. Maybe life will just slow down for a while and then natural optimism will come seeping back again. Maybe the interest rate cuts will work their magic. But fasten all seat belts and look out below.