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Do You Believe In Chinese Miracles? GDP, Industrial Production Beat; Retail Sales Miss

Tyler Durden's picture




 

Whocouldanode? Chinese GDP managed (thanks to record-breaking credit creation and QE-lite) to beat expectations of +7.2% and come in at +7.3% (still its slowest growth since April 2009). Notably this was the biggest decoupling from Bloomberg's high-frequency economic data forecast (i.e. real data) since May 2010. Despite weakness in Cement and Steel output, Industrial Production also managed to beat and actually improve (another miracle). Retail Sales missed expectations, rose only 11.6% YoY - its weakest since Feb 2006. Initial kneejerk is a lift in USDJPY, AUDJPY, TSY yields, and S&P and NKY futures... but that has now faded...

 

Chinese GDP beat, falls to slowest since April 2009, and decouples from Bloomberg's "real data" estimate by themost since May 2010...

 

Industrial production rose and beat - breaking any historical correlation with Steel and Cement industries...

 

For the 5th month of the last 6, Retail Sales missed and dropped to the slowest growth since feb 2006...

 

The initial reaction - USDJPY jerked higher, S&P Futs followed along with TSY yields...

 

But that has now faded...

 

*  *  *

And here is JPMorgan's CIO Michael Cembalest explaining why it's not sustainable (absent moar inflationary credit impulses - and the concomittant hangover),

China is slowing, mostly due to a gradual, steady decline in private sector activity. One example: the decline in fixed asset investment (e.g., business capital spending) at private sector firms relative to firms that are state-controlled. Premier Li Keqiang’s reforms are aimed at making it easier for entrepreneurs to start private sector firms, but in the current climate, private sector investment growth continues to fall.

 

 

The Chinese central bank injected some liquidity into the domestic banking system recently, but it was only for 3 months and not meant to address the more structural issue of declining private sector demand. While export growth and job creation still look pretty good, the overall picture is one of an economy growing at 7%, and that’s with the contribution from government spending. Government spending is set to slow in the second half of the year; the authorities continue to reduce the size of the shadow banking system which extends credit; and the overheated housing market is still in decline as well when looking at national home sales and a 70-city home price average.

We expect continued weakness in Chinese data for the rest of 2014 and into next year as well.

Source: JPMorgan

*  *  *

And we know just how bad that nagover can be (unless the drip of liquidity - and not reforms) is left wide open...

 

 

Charts: Bloomberg

h/t @M_McDonough

 

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Mon, 10/20/2014 - 22:25 | 5357812 Diggintunnels
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There's a sucker born every minute.

Mon, 10/20/2014 - 22:48 | 5357862 summerof71
summerof71's picture

You sex tang, sex tang...

Mon, 10/20/2014 - 23:13 | 5357936 TruthInSunshine
TruthInSunshine's picture

Goalposted numbers so fake that they're hilarious.

China, as such as is the case with so many emerging and developed economies, has now managed to pretend its way to nominal economic growth (as its exports have collapsed) via a truly epic feast of debt releveraging (it's so bad in China at the local/regional banks that even the central command can't get the corruption and malfeasance of regional/local banks under control).

6 years of massive releveraging of debt all around the globe, and even with population growth and the return of EZ credit , real consumption has fallen and continues to fall with every additional quantitative QEeefing by the Central Banks.

Looking at objective data, one would be a fool not to believe that the entire last 6 years had the true goal of re-liquifying a truly dead/zombie banking system at the total and complete expense, on almost a unit by unit of credit/debt basis, of the real economy.

The next crash will be akin to a massive earthquake when the existing buildings/structures are still severely damaged from the 2008 quake.

Tue, 10/21/2014 - 02:02 | 5358265 knukles
knukles's picture

If you all thought Enron fiddled numbers, then ya' gotta love and rely upon (fully) Official Chinese Metrics.
All made up shit from the Ministry of Sophist Statistics

Tue, 10/21/2014 - 02:15 | 5358274 TeethVillage88s
TeethVillage88s's picture

George Nory is interviewing Craig Smith about Operation Choke Point Right now on the Radio.

Coast to Coast AM http://www.craigrsmith.com/ http://www.coasttocoastam.com/

Pretty good layout. Fascism to close down coin dealers and those gun shops.

Tue, 10/21/2014 - 04:38 | 5358380 new game
new game's picture

the last stand or bend over for perma ass shuck...

Tue, 10/21/2014 - 02:36 | 5358293 CASTBOUND
CASTBOUND's picture

my neighbor's half-sister makes $63 /hour on the internet . She has been out of work for 10 months but last month her pay was $16551 just working on the internet for a few hours. More Info... www.job-reports.com

Tue, 10/21/2014 - 10:42 | 5359185 ersatz007
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my 4th cousin thrice removed on my father's side makes balloons at childrens' parties. 

Mon, 10/20/2014 - 22:27 | 5357816 frankTHE COIN
frankTHE COIN's picture

Confucius says that these are Bernie Made Off with the money numbers.
Only Bernie could produce such consistent, steady numbers.

Mon, 10/20/2014 - 22:27 | 5357817 Think Like A Crook
Think Like A Crook's picture

Wonder why they didn't report bogus bullshit inflated cement and industrial production output and retail sales?  I mean as long as your making shit up, why not go for the gusto?

Mon, 10/20/2014 - 22:32 | 5357827 i_call_you_my_base
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Everyone knows China's numbers are bullshit. No one cares.

Mon, 10/20/2014 - 22:35 | 5357836 in4mayshun
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Sum Ting Wong

Mon, 10/20/2014 - 22:40 | 5357850 TomGa
TomGa's picture

How's that electricity consumption doing?

Mon, 10/20/2014 - 22:58 | 5357895 ebworthen
ebworthen's picture

Considering fudged statistics that GDP is crap.

Mon, 10/20/2014 - 23:02 | 5357900 MollyHacker
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How's that silver consumption.

Mon, 10/20/2014 - 23:19 | 5357963 walküre
walküre's picture

Paging Dr. Copper .... Cat sales should be up

BDI Baltic Dry .. tick tock tick tock

http://www.dryships.com/ has crashed

http://www.bloomberg.com/quote/BDIY:IND Y/Y -53%

 

***************

China 7.3% growth is COMPLETE AND UTTER BULLSHIT!!!!!

Mon, 10/20/2014 - 23:41 | 5358033 tarabel
tarabel's picture

 

 

Now we know why the new Ebola Fuhrer hasn't started his new job yet. Been putting the finishing touches on his Statistics gig in China and doing some last minute shopping for fake iPhones. 

Tue, 10/21/2014 - 00:10 | 5358104 Jim in MN
Jim in MN's picture

It's almost heart-wrenching watching the Chinese Communist Party try desperately to create 1920s middle class America.  Almost...........

Tue, 10/21/2014 - 08:20 | 5358618 tumblemore
tumblemore's picture

they copied the banking mafia's banking model (counterfeiting and debt-pushing) thinking it must be good because USUK were so successful for so long not realizing USUK were successful *despite* the banking mafia (cos inventing new stuff like a m****f**** for 600 years straight)

 

 

Tue, 10/21/2014 - 00:17 | 5358114 Dragon HAwk
Dragon HAwk's picture

these are Bernie Made Off with the money numbers.

  ( comment of the day God I love it.. )

Tue, 10/21/2014 - 00:51 | 5358173 TheCosmicTaco
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Horseshit Chicom assclown pseudobabble.

Tell the truth you lying skunks.

 

China is fuuuuuuuuuuuuuuuuucccccckkkkkked.

 

Tue, 10/21/2014 - 01:08 | 5358205 WTFRLY
WTFRLY's picture

US Citizen, Press TV reporter dead in car crash near Syria 2 days after Turkey calls her a spy http://wtfrly.com/2014/10/20/us-citizen-press-tv-reporter-dead-in-car-cr...

Tue, 10/21/2014 - 06:53 | 5358457 SoDamnMad
SoDamnMad's picture

Snow plows and cement trucks need to be taken away from the (insert what you want here).  Nailguns are probably covered by the 2nd Amendment.

Tue, 10/21/2014 - 03:43 | 5358343 RagnarDanneskjold
RagnarDanneskjold's picture

The investment numbers don't look good; growth is running about 4% below the reported numbers. The cum numbers only look good because of high growth rates early in the year. 

Real Estate, Fixed Asset Investment Slows Sharply Again
Tue, 10/21/2014 - 04:40 | 5358383 new game
new game's picture

some one has shit on his cock...

Tue, 10/21/2014 - 06:49 | 5358449 Last of the Mid...
Last of the Middle Class's picture

Thank God industrial production numbers are back up. Got to have plenty of cheap chinese shit at wally world this christmas or it just isn't the same. I feel so much better now that the recovery is in full swing. Shiiitttttt!!!!!!

Tue, 10/21/2014 - 07:46 | 5358536 Son of Loki
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Beijing’s Crushing of Democracy in Hong Kong Sends Chills Through Taiwan

 

http://www.newsweek.com/2014/10/31/beijings-crushing-democracy-hong-kong...

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