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And The "Fake" Headline Of The Day Award Goes To...

Tyler Durden's picture




 

Ahhh, the smell of "fake" headlines in the morning. It smells like victory, especially as there goes another conspiracy "theory"

 

We have been pointing out the massive discrepancies in Chinese trade data for the last 2 years (e.g. here) and it seems, once again, that conspiracy "theory" has become conspiracy "fact."

Since early 2011, when the murky world of commodity-backed financing really gathered pace and the even more shadowy accounting framework of fake trade invoices began, Chinese trade data has been remarkably over stated relative to the trade data of the rest of the world. As the charts below show, the gap is large and as Bloomberg reports, RBS believes it will not be possible to 'judge' just how bad China's economic data is until June when the debris of a shadow-banking-system credit creation boom will be "cleaned" from the entirely "fake" trade data that we are treated to each month. As Nomura notes, “The Chinese economy is changing quickly on a massive scale, making it difficult for its statistics machine to catch up with the reality.”

 

As Bloomberg reports, China’s data distortions will muddy analysis of the nation’s trade until at least June, making it harder to assess the strength of the world’s biggest exporter and second-largest economy.

That’s when China will provide figures that compare with what Royal Bank of Scotland Group Plc economist Louis Kuijs says are “pretty clean” numbers from May 2013 that followed a crackdown on inflated invoices used to disguise capital inflows.

 

 

...

 

The distortions add to investor and analyst concerns that the quality of data from jobs to gross domestic product isn’t good enough for a country that’s driving commodity prices and Asian growth.

 

...

 

People see a very weak number and then you need to explain that the reality is not so bad because of very complicated reasons that included fake invoices and stuff. It makes all of us doubt more about what the reality really is.”

It seems to us like there is a long way to go in the de-faking of trade data...

China’s GDP figures have attracted skeptics

 ...including analysts at Capital Economics Ltd., who said in 2012 that third-quarter growth that year was about 6.5 percent, rather than the 7.4 percent reported by the government. Premier Li said in 2007, when he was party secretary of Liaoning province, that GDP figures were “man-made” and unreliable, according to a diplomatic cable published by WikiLeaks in 2010.

 

Economists pay little attention to China’s main unemployment gauge, the quarterly urban jobless rate, which excludes migrant workers and has barely budged from 4.1 percent for more than three years. Its impact on markets is minimal compared with the U.S. government’s monthly jobs report.

 

The discrepancy between Hong Kong data for imports from China and Chinese figures for exports to the city in early 2013 highlighted the practice of over-invoicing that inflated China’s export data. Regulators started a crackdown in May, leading to a slump in reported overseas shipments.

 

The correlation in China between commodity imports and growth has been small and there is “clear evidence” showing import figures overstate the strength of domestic demand, she said. Some Chinese companies may have used imported goods as collateral to borrow funds last year, distorting the picture of demand, she said.

 

“I really don’t put much weight on import data,” she said.

 

“The Chinese economy is changing quickly on a massive scale, making it difficult for its statistics machine to catch up with the reality,”

So take your pick - the trade data is not as bad as the real drop in exports BUT the previous trade data is entirely fake and so this is catch-down to an old normal reality that suggests growth and demand is dramatically slower than many saw and hoped would last forever.

 

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Fri, 04/11/2014 - 09:14 | 4647009 fonzannoon
fonzannoon's picture

A fake headline from a fake news organization about fake data....

Fri, 04/11/2014 - 09:26 | 4647032 Thought Processor
Thought Processor's picture

 

 

 

Reversion to the truth will be most painful.

 

 

 

 

Fri, 04/11/2014 - 09:38 | 4647092 TruthInSunshine
TruthInSunshine's picture

I had concrete data as to how bad Chinese exports were when a neighborhood kid who cuts my lawn told me he bought 5 of those Cree XML T6 LED Surefire
flashlights (claimed 600 lumens output - they'll do it on the A123 batteries) for $3.60 each when the same ones were selling for $6 to $10 each a few years ago.

Flashlight deflation, bitchez!

Fri, 04/11/2014 - 10:02 | 4647205 Four chan
Four chan's picture

The chinese system only lies to the upside at all times, so when you see a bad number come out its really fucking bad.

Fri, 04/11/2014 - 11:18 | 4647557 monad
monad's picture

They fix the numbers to fit whatever they are involved in. Right now the TPP negotiation is the major beggers' baquet, so they dress down for to screw the clackers.

Fri, 04/11/2014 - 09:22 | 4647036 bania
bania's picture

So fake... it's real!

Fri, 04/11/2014 - 09:35 | 4647078 intric8
intric8's picture

Two negatives make a positive!

Fri, 04/11/2014 - 09:45 | 4647119 Algosaurus Rex
Algosaurus Rex's picture

That's GOLD, Bania! GOLD!

http://www.youtube.com/watch?v=j0qm0KUPeD8

Fri, 04/11/2014 - 09:31 | 4647062 post turtle saver
post turtle saver's picture

fake as a chinese audit

Fri, 04/11/2014 - 10:50 | 4647431 HardAssets
HardAssets's picture

"A fake headline from a fake news organization about fake data...."

 

Yeah, but my yawn is real.

Fri, 04/11/2014 - 09:14 | 4647013 A_Nejad
A_Nejad's picture

The way BDI been heading south these past months, IMHO it was sorta obvious, no? 

Fri, 04/11/2014 - 09:22 | 4647037 Cangaroo.TNT
Cangaroo.TNT's picture

No.  When BDI is going down you ignore it, or say it's because a glut of new ships coming online.

Fri, 04/11/2014 - 09:14 | 4647015 BandGap
BandGap's picture

Pointing more than fingers at this point. Calling someone a liar because you are losing your shirt. Oh, that will work.

 

Fri, 04/11/2014 - 09:15 | 4647017 LawsofPhysics
LawsofPhysics's picture

China really wants to export their inflation like the U.S.S.A.

I suspect they will get their wish soon enough...

hedge accordingly.

Fri, 04/11/2014 - 10:41 | 4647394 Its_the_economy...
Its_the_economy_stupid's picture

laying it down. as usual. keep posting.

Fri, 04/11/2014 - 09:16 | 4647018 franciscopendergrass
franciscopendergrass's picture

I thought they were suppose to be good at math

 

Fri, 04/11/2014 - 09:16 | 4647020 Sudden Debt
Sudden Debt's picture

When you go on this stockmarket quest.... trust nobody...

god speed knight...

Fri, 04/11/2014 - 09:17 | 4647024 free_lunch
Fri, 04/11/2014 - 09:21 | 4647035 Dr. Engali
Dr. Engali's picture

Sooner or later these dogs are going to have to be put down.

Fri, 04/11/2014 - 09:17 | 4647025 youngman
youngman's picture

Never trust an abacus.....

Fri, 04/11/2014 - 09:19 | 4647027 Dr. Engali
Dr. Engali's picture

"When it becomes serious you have to lie."

 

~Juncker~

Fri, 04/11/2014 - 09:21 | 4647033 Floordawg
Floordawg's picture

Three things cannot be long hidden: the sun, the moon and the truth.

-Buddha

Fri, 04/11/2014 - 09:23 | 4647040 Dr. Engali
Dr. Engali's picture

Awesome avatar.

Fri, 04/11/2014 - 09:25 | 4647047 hotrod
hotrod's picture

Guess I did not lie enough growing up.  Watched too much Leave it to Beaver and now that I am older, I find out it is an Eddie Haskell world.

Fri, 04/11/2014 - 09:32 | 4647057 Smegley Wanxalot
Smegley Wanxalot's picture

You are misinterpreting the acronym.

They are referring to the following data:

. . . . . . F engshui

. . . . . . A daptive

. . . . . . K leptocracy

. . . . . . E quilibrium

 

It's the PRC ... People's Reporting Conglomerate

Fri, 04/11/2014 - 09:33 | 4647070 silentboom
silentboom's picture

Well, when you look at the fudging of our numbers why wouldn't the rest of the world do the same.  We are running the largest monetary scam in the history of the human race.

Fri, 04/11/2014 - 10:08 | 4647242 Four chan
Four chan's picture

this is true. stealing from the world, one slip of worthless paper at a time.

Fri, 04/11/2014 - 09:35 | 4647077 novictim
novictim's picture

When you take into account that China's newest largest customer for exports is an invisible people living on the dark side of the moon then you really start to get bullish about China.

I'm long on moon exports from China!

Fri, 04/11/2014 - 09:37 | 4647088 Stuck on Zero
Stuck on Zero's picture

China has always exported much, much more than it actually exports.  The reason has to do with trade subsidies.  Ships are loaded with goods and "exported" to gather the subsidies and somewhere at sea the papers, names, and ownership are altered and the cargo brought back to China and sold.  That practice is probably accelerating.

 

Fri, 04/11/2014 - 09:41 | 4647106 Orwell was right
Orwell was right's picture

Sooo...where in the hell is Bloomberg's front page on article on the "United States Faked Data".

...(not saying the Chinese aren't manipulating the news, but it's the pot calling the kettle black)...

Fri, 04/11/2014 - 09:41 | 4647112 Eastwood
Eastwood's picture

what's the source of the data in those charts? remarkable as they are, can't tell whether it's from Bloomberg, RBS, or some overzealous pundit.

Fri, 04/11/2014 - 09:43 | 4647120 debtor of last ...
debtor of last resort's picture

So no yuan as a reserve currency? That whole country is a floating pig show.

Fri, 04/11/2014 - 09:43 | 4647121 franciscopendergrass
franciscopendergrass's picture

Maybe the chinese data represents 3 standard deviation from the mean.

Fri, 04/11/2014 - 09:45 | 4647131 TheFreeLance
TheFreeLance's picture

Wait. So it is GOOD news that there is less moldy drywall and non-functioning solar cells floating around the planet, right?

I am so confused...BUY!

Fri, 04/11/2014 - 10:04 | 4647212 elwind45
elwind45's picture

Another bloomberg first?

Fri, 04/11/2014 - 10:11 | 4647261 elwind45
elwind45's picture

Do you really think this is news to industry? Do you think that maybe inflation is being past out the boardroom door and not the money supply? Do you really think this is the deflation the IMF fears? and finally "do you think industry is cutting costs and not passing the savings on to the consumer"? Slack EVERYWHERE
EVERYWHERE!

Fri, 04/11/2014 - 10:17 | 4647288 elwind45
elwind45's picture

Play hell with the imminent dollar collapse or do they really reserve so much currency if sells are make believe?

Fri, 04/11/2014 - 10:54 | 4647446 joego1
joego1's picture

Thieves to the left of me Jokers on the right....

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