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‘On the Edge’ Banks Facing Writedowns After FDIC Loan Auctions – Bloomberg.com
The next European country set for debt watch: France – The Globe and Mail
FT.com – Edward Chancellor – How long has the lucky country got?
Defaulted Loans May Haunt Seniors – WSJ.com
FT.com – Big bank oversight to stay with Fed
Economist’s [...]

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Commenting about the recent Wall Street Journal article “Housing rebound in Canada spurs talk of new bubble,” Rolfe Winkler of Reuters says
Last week Paul Krugman toasted the sobriety of Canadian banks. Among other things, he said that low rates aren’t enough to cause a bubble since Canadian rates are low and, well, they don’t have [...]

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This is the second straight month that the RBA has raised interest rates. From the Sydney Morning Herald:
The Reserve Bank has lifted its key interest rate for a second month in a row as it attempts to keep Australia’s economy on track for sustained growth.
Today’s widely tipped 25-basis-point increase raises the central bank’s cash rate [...]

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The Reserve Bank of Australia unexpectedly raised rates by 25 basis points to cool down its economy. It will “gradually reduce stimulus” in anticipation of sustained recovery. Australia has probably been the major economy least affected by the global economic slowdown, so one would expect the RBA to be the first major central bank to [...]

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This comes via the Sydney Morning Herald:
A year ago, after Stern Hu had survived 20-odd rounds of negotiations and won Rio Tinto and Australia an extraordinary 87 per cent price increase for its iron ore contracts, I asked him if he was being too aggressive.
He said he had no qualms with driving as hard a [...]

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Rio Tinto was one of those companies which levered up just as the economy was turning down, rushing its bottom line ad forcing it into the hands of Chinalco, a large Chinese commodities company.  However, as commodity prices have turned up and investors have simultaneously started buying shares, Rio was able to escape the Chinalco [...]

The goings on down under are not getting that much play in the press outside of Oz. But, Babcock & Brown, Australia’s second-largest investment bank has just gone under.

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This is the absurd thinking of economists. Australia has a 40% chance of recession next year. What does that even mean? If you asked me, I would say the chances of recession in Australia are 100%. You have a slowing property market, financial sector turmoil, a falling currency, plunging commodity prices and [...]

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Just as Japan is starting to unwind its carry trade, a new one might be forming in the form of 1% base rates in the United States. The carry trade was very popular amongst Japanese retail investors, especially using leverage (see article – hat tip Yves Smith). But, this trade unwound in a [...]

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Of the major currencies, the Japanese Yen has been the strongest in the last few months, while the Australian Dollar has been the weakest. These two currencies have also been the most conspicuous in the Japanese carry trade. That trade is now coming unstuck, precipitating changes of epic proportions.
For those of you who [...]