by Wolf Richter
“Australia’s WTF Moment”
Australian bank regulators that had for years practically encouraged the big four Australian banks to do whatever it takes to further inflate the housing bubble suddenly fretted publicly in April about the banks’ exposure not only to housing but also to China. And now something strange has happened that set off all kinds of warning sirens.
On August 2, the Reserve Bank of Australia (RBA) lowered its target “cash rate” by 25 basis points to 1.50%. And what did the banks do? Something so strange it smelled of panic.