"China Is Fixed" GDP & Industrial Production Beat As Retail Sales Miss & Home Prices Tumble

Tyler Durden's picture

Having glimpsed the ugly reality of the under-belly of the Chinese economy last week, and the divergence between that and the government's PMI survey fallacy, it is no surprise that by the magic of excel, GDP and Industrial Production modestly beat expectations (+7.5% YoY vs 7.4% exp and +9.2% YoY vs +9.0% exp respectively). However, despite epic credit injections, home prices tumbled 9.2% YoY and Retail Sales missed expectations rising only 12.4% YoY. Even as it is self-evident that re-flating the next chosen bubble, or attempting to socialize losses, is not sustainable in the long-run, it is clear (given the surge in deposit creation in recent months) that China has chosen the path of short-term easy-street as opposed to the reform-based hard-street they had promised.

 

Thanks to this...

GDP jumps for the first time in a year as coal demand collapses...

 

and Industrial Production surged... Its biggest jump in 13 months and first beat in 7 months

 

and then there's real estate...

  • *CHINA JAN.-JUNE HOME SALES VALUE FALLS 9.2% Y/Y
  • *CHINA JAN.-JUNE HOME SALES AREA FALLS 7.8% Y/Y
  • *CHINA JAN.-JUNE NEW PROPERTY CONSTRUCTION FALLS 16.4% Y/Y

and retail sales missed...

 

Smells like a massive inventory build to us...

  • *CHINA UNLIKELY TO CUT INTEREST RATES THIS YEAR: SEC. JOURNAL

*  *  *

The question is - where will the hot money inflation-prone printing of the PBOC flood now that CCTV has exposed the US-real-estate channel?

*  *  *

The market's reaction to all this 'great' news... +4 pips in USDJPY! But it appears someone knew that good news was bad news 15 minutes before the rest of the world...

Just as in the rest of the world.. good news is bad (less easy money) news...

"The GDP data were within expectations today,” said Xu Shengjun, an analyst at Jianghai Securities in Shanghai. “If the data was very bad, at least there’s some hope that the government may roll out more stimulus measures. Now we are not reacting much because it’s the status quo. Small caps are too expensive so they are still falling.”

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JPM Hater001's picture

Everything is fine...that is the illusion

 

pods's picture

I bet you get a better correlation of their GDP to the particulate counts.

pods

 

Escrava Isaura's picture

Thank goodness! Now we can all go sleep in peace.... China self fixed it

Dr. Engali's picture

'Market reaction' ... Lol. Markets are so 20th century. Central planning is the future. The smart people running the central banks of the world know what's best for the rest of us proles.

NoDebt's picture

Yep.  Start liking it.

Never One Roach's picture

All those truckers in Australia making more then those heart surgeons better start saving every penny. When the Chinese economy slows, Australian miners, transport, etc may feel the pinch.

thestarl's picture

Already happening and not only in energy coal.Met coal prices and demand down and redundancies on the increase.

nmewn's picture

The Fog of Statists.

frankTHE COIN's picture

...While Observing Thru Beer Goggles.

SilverIsMoney's picture

Nothing will change until the people do something about this... everywhere.

Escrava Isaura's picture

Do something about? Let me see when I heard it last:

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning" - Henry Ford – “New York World” newspaper, 1920

yogibear's picture

Yeah, and the PIIGS are recovering until they aren't.

What plate of the central banksters starting to wobble?

It's Portugal, thought that was fixed...

Back From the Brink, Portugal Still Has a Long Way to Go

http://www.nytimes.com/2014/07/15/business/international/back-from-the-b...

Bailouts to infinity in Eurotrash land. In the mean time the 99% are getting crushed.

Son of Loki's picture

"I did not have sexual relations with that woman."

frankTHE COIN's picture

Correct. The Arkansas Massage Technique is often confused that way.

AdvancingTime's picture

 I'm instantly reminded of the infamous response Bill Clinton gave to a question during an interview, "it all depends on your definition of is. "Welcome to the world of spin media. More on this subject in the article below.

http://brucewilds.blogspot.com/2012/12/what-is-definition-of-is.html

NoDebt's picture

"it is self-evident that re-flating the next chosen bubble, or attempting to socialize losses, is not sustainable in the long-run,"

What the hell IS sustainable in the "long run"?  All this unsustainability seems to be pretty damned sustainable since it's been happening since I understood what money was.  (OK, that was only like 40 years ago, so what's my opinion count for?) 

Electromagnetic storage of data on hard drives is pretty damned unsustainable, too, (just ask Lois Lerner and everyone she's interacted with the last 10 years) but our world runs on it.  Every freaking day.

Al Huxley's picture

I KNEW that if they talked about the problems long enough that it would fix things!

Escrava Isaura's picture

Huxley,

Talk where? To whom?

The last time I tried at the bar, they almost threw me out. The situation is hopeless, if you think people can, or will wake up.

A life time of brainwashing and indoctrination.

Internet forums like Zero Hedge… this is as good as it gets.  

AdvancingTime's picture

The debate continues as to how stable china really is. Much of the recent growth in China after 2008 came from a massive 6.6 trillion dollar stimulus program that expanded credit and poured massive amounts of money into the system. This money encouraged expansion and construction with little regard as to real demand or need. Like a plane on autopilot China continued in the direction it had been on.

Now China finds itself in a credit trap. For years the people of China have had the habit of saving much of what they earn but the low interest rates paid at banks has not rewarded savers. With few investment options much of this money has drifted towards housing and driven housing prices sky high. The economic efficiency of credit is beginning to collapse in China and the unwinding of China’s giant credit spree could be very painful. More in the article below.

http://brucewilds.blogspot.com/2014/03/china-and-great-credit-trap.html

craus's picture

AdvancingTime your still peddling repackaged news.
I don't blame you this market is rigged and tough to make dough.

orangegeek's picture

In 2008, the Shanghai index was about 6100.

 

Today, the Shanghai index is about 2000.

 

There's confidence in communists for you.  LMAO!!!!!!