National Australia Bank (NYSE:NAB) disappointed Sydney early Wednesday morning, reporting full-year 2004 earnings (it is common for foreign companies to report twice a year or annually instead of quarterly) of A$3.46 billion, down 15% from last year, compared with an estimate of A$3.48 billion. That works out to per-share earnings of A$2.23.

A big concern was National Australia Bank's dividend, which will stay steady at A$0.83. CEO John Stewart cited four problems that caused the "unacceptable performance," all of which contributed to revenues being flat but costs rising by 7%. Among other issues, Stewart vowed to improve restrictive policies that prevented the bank from meeting its customers' needs and a lack of "cultural framework" that hurt both morale and productivity.

There was some optimism, though, as management expects earnings to bottom out in the first half of 2005 and improve from there. The bank also expects to sell its interests in Ireland sometime in 2005, with "expressions of interest already received."

So why should anyone care about American depositary receipts for some small, rinky-dink foreign bank? First, National Australia Bank is not small: It has a market cap of $31 billion (U.S.), larger than plenty of banks in the Standard & Poor's 500. More importantly, the bank ties in with a theme I wrote about in September: seeking out real diversity with foreign investments.

Australia, because it has a commodity-based economy, is at a different point in the economic cycle. The Reserve Bank of Australia (the equivalent of the Federal Reserve) gave guidance that a rate hike for the official cash rate, now at 5.25%, may be needed in the future, but there is no pressing need. The U.S. Federal Reserve appears to be closer to the beginning of a rate-hiking cycle than to the end of one. According to the New Zealand Herald (yes, I read the business section online every day), Australian economists are expecting the unemployment rate to hit a 23-year low of 5.5%. The recent low in the U.S. was 3.9% a few years ago, and we may see the rate continue to climb as more people look for jobs.

A big catalyst for the Australian economy and stock market is the increasing demand for the country's natural resources from China and India. This will result in more capital with potential investment demand flowing into Australia. We have seen this start to play out over the last five months as the Australian dollar (or Aussie, as it is known) has rallied 10% against the greenback. Only time will tell about whether the theme results in a big lift for Australian equities, but it is clear to me that this is a type of demand that is not a potential catalyst for the U.S. economy or stock market.

Fool contributor Roger Nusbaum is an investment manager and wildland firefighter in Prescott, Ariz. At press time, neither Roger nor his clients owned any of the stocks mentioned.