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Chart Of The Day: China Industrial (Lack Of) Production

Tyler Durden's picture


It appears China's growth trajectory just dead-cat-bounced and is now resuming its downward trend. With Industrial Production at its lowest since March 2009 (though we are sure we will be told - "yeah, but it's still growing at 9.2% YoY"); perhaps it is better to look at this chart with no 'government-sponsored' y-axis since the bottom line is - it's bad and getting worse (and the PBoC remains 'stuck').

China Industrial Production has resumed its rapid drop-off...

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Wed, 09/05/2012 - 09:37 | 2764181 Abraxas
Abraxas's picture

Another bubble is ready to deflate.

Wed, 09/05/2012 - 09:40 | 2764187 Oh regional Indian
Oh regional Indian's picture

If I study what is happening in India, whose bubble has inflated in a rather weird manner so far, I think India is the next great profit opportunity. China will be deflated into India.

Because if inefficiency generates arbitrage, then India is King. 


Roo Pee, FTW!


Wed, 09/05/2012 - 09:47 | 2764210 Popo
Popo's picture

India is a disaster.   Check your facts, not your emotions.

Wed, 09/05/2012 - 09:50 | 2764223 Oh regional Indian
Oh regional Indian's picture

I live here Popo, I can see where these tremendous inefficiences can be eliminated.

I'm saying for India only way is up. It is th epits.


Wed, 09/05/2012 - 09:53 | 2764232 Leopold B. Scotch
Leopold B. Scotch's picture

The only way is up for India?  Why right now vs. all the changes in the past 100 years?

Wed, 09/05/2012 - 09:55 | 2764241 Popo
Popo's picture

And I'm saying that the belief that things can't get any worse is based on your own normalcy bias and not facts.

Things can, and likely will, get significantly worse for India over the near to medium term.     The decline of western consumption is going to ravage the Indian economy at the exact time that water issues, food issues and health issues are devouring her from the inside.   The only way to go is not up.   Up is merely one possibility -- and unfortunately it is the less likely one.

Wed, 09/05/2012 - 09:55 | 2764242 silviov1
silviov1's picture

but it is still a long long way to proper growth, the bubble will probably burst before, and when it does, we can as some more 20y to reach that kind of growth

Wed, 09/05/2012 - 10:02 | 2764258 Winston Churchill
Winston Churchill's picture


When it comes to India,one maxim always comes to my mind.

Start at the bottom and work your way down.

Corruption and ineficiency are cultural and systemic.

Hope I'm wrong,but

Wed, 09/05/2012 - 11:41 | 2764597 Oh regional Indian
Oh regional Indian's picture

My point exactly. Lot's of low hanging fruit to make things move better here. When the money-master's eye is firmly here, and it will be.... things will change...fast. Watch...


Wed, 09/05/2012 - 13:00 | 2764884 Sisyphus
Sisyphus's picture

You trying to be MDB or what?

Wed, 09/05/2012 - 14:53 | 2765404 Popo
Popo's picture

You clearly don't get it.  Those who do are fleeing India and the bottom is going to drop out.   India will likely devolve into civil strife and violence within the next year or two.

Yes, things in fact are going to change.  And fast.  And if you're long, you're about to get your face ripped off.   Watch yourself ORI.   India's future is bleak.

This just out from Mish today:  http://globaleconomicanalysis.blogspot.com/2012/09/property-always-good-...



Wed, 09/05/2012 - 11:19 | 2764518 DUNTHAT
DUNTHAT's picture

Never argue with demographics.

50% of India is 25 years old or less.

That's 500 million people wanting more of everything!

Wed, 09/05/2012 - 09:49 | 2764218 magpie
magpie's picture

You might be exaggerating a bit, but India could really use some new infrastructure, compared say to Spain.

Wed, 09/05/2012 - 09:53 | 2764231 Oh regional Indian
Oh regional Indian's picture

"some" is understating it Magpie.


Wed, 09/05/2012 - 09:40 | 2764189 101 years and c...
101 years and counting's picture

not exactly sure how $5 gas in the US, 12 EUR gas in europe and record food prices can fix these problems....since this is what would result in more money printing.

btw, if germany cant sell 5B EUR in bonds, how the hell they going to sell 190B EUR in bonds to contribute to the ESM?  And france needs 150B EUR and Italy needs 125B EUR and Spain needs 90B EUR, etc....

Wed, 09/05/2012 - 10:00 | 2764253 Al Huxley
Al Huxley's picture

They'll lend it to each other.  That way they can run deficits to eternity without ever printing up any new money.  As long as the system is sufficiently complex, and has enough 3 and 4 letter acronyms it's not a ponzi, and everybody wins.

Wed, 09/05/2012 - 19:46 | 2766336 StychoKiller
StychoKiller's picture

Sooner or later, the cat will be belled.

Wed, 09/05/2012 - 16:12 | 2765666 _ConanTheLibert...
_ConanTheLibertarian_'s picture

gas is 7.5 Euros per gallon, not 12.

Wed, 09/05/2012 - 09:41 | 2764194 Jason T
Jason T's picture

they went from building 1.2 million cars in 2001 to 9 million by 2008.  then to 13.79 million in 2009 destroying US auto production.. and then to 18 million cars in 2010.  They are    now platueing ..

frankly, if they can hold 18 million cars a year, I would think that is just fine.

gasoline consumption is expected to be up 12% this year Vs down 4% in the US.

no growth in Chinese production level is still strong growth in total stock is how I see it.  

Wed, 09/05/2012 - 09:43 | 2764198 LongSoupLine
LongSoupLine's picture

Wow, imagine what the unfudged chart looks like...holy shit.

Wed, 09/05/2012 - 09:44 | 2764200 oldfruit1
oldfruit1's picture

whats the Y axis represent ?

Wed, 09/05/2012 - 09:51 | 2764219 Popo
Popo's picture

It represents Year-over-Year growth.   And by the way, 9.20% is still *incredibly* good.  

This article is sort of crap because it extrapolates current rate of change into an assumed future rate of change -- but the chart shows enough medium-term volatility to moot that thesis.    At 9.20% year-over-year growth, China is still kicking insane amounts of ass.

Is growth slowing?  Yes.  

Does this chart look scary?   Not in the least.

Wed, 09/05/2012 - 09:54 | 2764237 Dr. Engali
Dr. Engali's picture

That is true if you believe all the numbers coming from the ministry of truth.

Wed, 09/05/2012 - 10:46 | 2764371 Cognitive Dissonance
Cognitive Dissonance's picture

I always believe everything the ministry of truth tells me to believe.

BTW Mrs Cog has informed me that there will NOT be any more butt plug jokes. I blame you for that rather vivid image YOU painted of fetid green corpses exploding last evening. :)

<Sorry honey. No more beginning.......now.>

Wed, 09/05/2012 - 09:45 | 2764203 Dr. Engali
Dr. Engali's picture

Time to start beefing up the military industrial complex.

Wed, 09/05/2012 - 09:49 | 2764216 A82EBA
A82EBA's picture

lol ours or theirs?

Wed, 09/05/2012 - 09:52 | 2764226 Dr. Engali
Dr. Engali's picture

Theirs...we have no problem feeding the complex here.

Wed, 09/05/2012 - 10:49 | 2764380 Cognitive Dissonance
Cognitive Dissonance's picture

It appears that the American complex will sell all its capability and knowhow to China (and anyone else for that matter) in order to kick the Ponzi can down the road a little bit further.

The rotten core complex feasting upon itself. The proverbial last meal.

Wed, 09/05/2012 - 11:10 | 2764472 Mitzibitzi
Mitzibitzi's picture

There's also the issue of rolling revenue for the corporations. Simplistically, you have to make sure both sides in a conflict (whether military or otherwise) are at least vaguely well equipped to fight it, cos if side A doesn't have the capability to break some of side B's toys, and vice versa, you can't sell both of them new toys next week. A long drawn out war of attrition is almost always more profitable than a quick victory. Except maybe in the realm of hostile takeovers, where you've usually borrowed the money (at a ruinous rate, generally) to do the job from some third party and so want to get it done quick so you can sell off your new 'acquisitions' and pay off the loan before the interest starts getting too steep - see Libya.

Wed, 09/05/2012 - 13:01 | 2764887 Herd Redirectio...
Herd Redirection Committee's picture

You don't go to war until you control both sides sufficiently.  That is what the history of the 20th century has taught us.

Wed, 09/05/2012 - 09:46 | 2764209 dwdollar
dwdollar's picture

You mean the robots aren't going to save us?

Wed, 09/05/2012 - 09:50 | 2764221 Jim B
Jim B's picture


Wed, 09/05/2012 - 09:52 | 2764229 debtor of last ...
debtor of last resort's picture

Let China export drop to zero. Their internal market is big enough, I don't wonna see "Made in China" anymore, it's f**king channel stuffing!

Wed, 09/05/2012 - 09:53 | 2764233 Hype Alert
Hype Alert's picture

Baltic Dry has resumed it's decline and AAPL has popped the 20% of the QQQ's.

Wed, 09/05/2012 - 10:04 | 2764261 adr
adr's picture

2009 and 2010 saw massive levels of overproduction for a world economy still stuck in a recession. This product showed up and was counted as assets allowing US corporations to fake growth.

The problem is two years worth of goods can't generate real profit unless it is sold. If the goods aren't sold there is no money to finance new production. This is what you are seeing now.

The printfest pulled a few years worth of production forward, the problem is that none of the money went out to consumers so they could buy the products. Demand has collapsed and there is a massive overhang of inventory, that so far hasn't shown up in earnings reports.

You can only push inventory around a few times before there is nowehere else for it to go. When you book items as sold, eventually the money has to show up to balance the account. I wonder what happens to stocks when the money all these corporations claimed to have made, is found out to not really be there?

Wed, 09/05/2012 - 10:20 | 2764306 ParkAveFlasher
ParkAveFlasher's picture

What a terrible question.  +100

Wed, 09/05/2012 - 10:12 | 2764285 Mrmojorisin515
Mrmojorisin515's picture

all i want to know is when all these charts resemble housing, good ole flat line

Wed, 09/05/2012 - 10:14 | 2764287 vertexa
vertexa's picture

No wonder China stock market is making new low EVERYDAY

Wed, 09/05/2012 - 10:27 | 2764303 BlackholeDivestment
BlackholeDivestment's picture

Breaker Breaker, and I mean Breaker!

           This is Jack Burton on the Porkchop Express PIIGS  http://www.youtube.com/watch?v=Z5IwK28tVwE 

...and the Great Wal Mart of China Syndrome http://www.youtube.com/watch?v=AKQKE0JfXtA


 Thar she blows!!! I'm ''puting'' the peddling down for a Commie Red Ferrari crash full of broken and dead Ho Ho's  http://finance.yahoo.com/news/playboy-death-wrinkle-chinas-power-141158131.html 

Oh Ho Ho, shoulda been hum'n in a Hummer, woulda been even more ironic if the Ho Ho was screaming Yahoo out the Windows while sexting a byte from the Apple IPhone. http://www.youtube.com/watch?v=y2UqKysJz6M 

Jack off... 


Wed, 09/05/2012 - 12:14 | 2764709 Shizzmoney
Shizzmoney's picture

I get tendinitis in my right elbow at the very THOUGHT of the China bubble bursting.

Oh, pity the poor corporations!  And their faux profit off of slave labor!  ANd just wait on the way they will react to a China revolt, hard landing - they'll blame everything but themselves in thinking they could rely on workers of a Communist State to produce for the world, just to save a few bucks in the name of "The Market".

China, WILL, go the way of Venezuela of the 1960s.  Likethe US, their way of governance is unstainable, no matter how much they put the foot down.  They can't contain their population, and they know it. 

Wed, 09/05/2012 - 13:59 | 2765161 Snakeeyes
Wed, 09/05/2012 - 15:24 | 2765519 Venerability
Venerability's picture

Once again: What do any of you fellas - or Gordon Chang - believe you are accomplishing with the incessant China Bashing, other than making the Chinese more and more angry?

Unlike Western governments, the Chinese government can still do pretty much whatever they please - and while infinitely patient, they are not above being very heavy-handed when they feel they have to be.

I think China has many and varied kinds of stimulus they will have no qualms about springing on the world very suddenly when least expected - taking out all sorts of over- greedy Short positions held by those who must seem like Enemy Institutions to many Chinese insiders now: Euro Shorts? Aussie Shorts? Iron Ore Shorts? Shipping Shorts? Rail Shorts? Auto Shorts? Or maybe upset the Rare Earth Shorts again? That's an easy one.

In fact, the best kind of trading from the Long side the next several years may hinge on figuring out what and where the Chinese are going to stimulate next.

Thu, 09/06/2012 - 01:34 | 2767097 agagshoes
agagshoes's picture

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