Who wants to be fashionable?

While I'm hardly a dedicated follower of fashion, those in the know have told me that Australia used to lag the Northern Hemisphere by up to 18 months as far as haute-couture was concerned.

That was due mainly to our seasonal differences, when buyers would obtain next summer's wares just when the European winter was starting.

Markets have globalised and consumers can now be the latest fashion victims much faster due to the internet.

In some ways, because of globalisation like this, we assume that Australia is affected by everything in a more immediate way.

Last year and earlier this year, there was a lot of focus on the US subprime market as investors watched capital markets for the flow-on effects.

But despite the furrowed brows of market watchers, most of us in Australia have simply been observers. The impact has been relatively insignificant, enough for us to feel quite immune from the crisis that has enveloped the US financial system.

I know there's been the collapse of margin lenders like Opes Prime, and the RAMS debacle, but overall we've seen a slowdown rather than dramatic effects.

It's easy to think we've been overlooked.

However, subprime isn't over. In Europe, the credit crunch has only really emerged as a crisis this year.

It's a delay that makes me wonder if there is a ripple effect yet to reach Australian shores in a big way - much like those fashion items of yesteryear.

For those who haven't been watching, the news out of Europe, especially the UK, has been big and disastrous, reflecting how Britain's own economic slump has been exacerbated by the subprime problem.

The thing is, the UK troubles didn't start until at least six months after subprime was a recognised problem of major significance in the US.

The first big UK issue was Northern Rock plc, which had credit woes that sparked a massive run from depositors, who formed queues down the streets that reminded me of images from the Great Depression.

The British government ended up nationalising the bank in February, albeit temporarily it says, in order to put the public at ease and show that the government stood behind the banking system.

There is a lot of conjecture that the Labour government now run by Gordon Brown had acted hastily in its first big test.

Since then, rumours have abounded that several big banks have had capital shortfalls - including BankWest owner HBOS which denied it, but later put its hand up to raise 4 billion pounds. Speculation abounds, too, that HBOS may sell BankWest as part of its capital raising needs.

To be fair, British regulators have been hunting rumour spruikers who are believed to also be shorting stock in banks they are whispering about in order to make windfall profits.

The latest saga surrounds Britain's 10th biggest bank, Bradford & Bingley, a former building society like Northern Rock which has botched a much-needed fund raising to shore up its own desperate capital needs.

Ironically, the big investment banks involved in that fund raising were Citigroup and UBS, the US and Swiss giants which have had their own massive subprime woes. They have been criticised for seeking to get out of underwriting the deal.

Far from being over, subprime is well and truly alive.

With that in mind, I just can't help feeling we have gotten off too lightly, and that we haven't missed the subprime party, we've just been fashionably late.

Yes, ANZ has copped it over the failure of margin lender Opes Prime but the reality is it's bad PR, that's all - at this stage. Most of those losses have, thus far, been spread around a group of investors who've lost shares, and big associated paper profits. Not that I am being unsympathetic to their plight, in some cases it's been a fortune - but it's not enough to rock the financial system.

There's also been a slow down in capital markets activity and IPOs almost stopped altogether in April before getting back on track in May.

Many will tell you that money is hard to get, but plenty will tell you it's there if a project stacks up.

The picture we see in Australia is one of riding things out, as we did during the Asian financial crisis.

Thinking about those fashion merchants and watching the news from London, I keep pinching myself and wondering if this is possible.

We've talked so much about the pull of China, and India, but when a giant bank like HBOS is struggling to raise 4 billion pounds in wealthy Europe, where does that put some of the massive resource projects we have lined up seeking billions and billions to get the go ahead.

We now lack the push of credit markets. Last year, the most savvy and ruthless funders, the private equity investors, pulled the pin on the market.

We have had huge US banks making massive losses and seeking sovereign fund money to shore themselves up.

Maybe watching America was the wrong way to go. Europe was always where our fashion leads came from.

I find it hard to fathom that Australia's financial system - one that has gorged itself on a property boom like the Brits' - can scrape through unscathed.

If we do - thanks to our resources sector - then, perhaps, being unfashionable is not all that bad.