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Submitted by PandaHedge

Finally, China’s Alan Greenspan speaks out

Bad news is once again good news... for stocks that is. 

After a month and a half of markets unable to decide if they should buy or sell on ugly data, over the weekend, People’s Bank of China Governor Zhou Xiaochuan expressed faith in the economy, and said there is no basis for further Yuan devaluation, something the PBOC has said consistently over the past year, despite two sharp devaluation episodes.

Excerpted from Doug Noland's Credit Bubble Bulletin,

Credit is not innately good or bad. Simplistically, productive Credit is constructive, while non-productive Credit is inevitably problematic. This crucial distinction tends to be masked throughout the boom period. Worse yet, a prolonged boom in “productive” Credit – surely fueled by some type of underlying monetary disorder - can prove particularly hazardous (to finance and the real economy).

Late last month, HSBC Holdings CEO Stuart Gulliver announced a global freeze on hiring and compensation in a move designed to help the bank cut some $5 billion in costs by the end of next year.

To be sure, HSBC isn’t alone in seeking to roll back costs amid bouts of global market turmoil. As Bloomberg notes, “UBS froze investment bank salaries this week and Barclays Plc extended a freeze on hiring new staff indefinitely in December, while Credit Suisse Group AG and Deutsche Bank AG are cutting thousands of jobs.”

Back in 2012, BNP Paribas exited the North American reserve-based lending market, when it sold its RBL unit to Wells in an effort to shore up its balance sheet amid the turmoil generated by the eurozone debt crisis.

A little over two years later, in the fall of 2014, BNP got back into the RBL game in the US. That probably wasn’t a good idea.