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China HSBC Flash PMI Declines, Economy Now In Contraction For 10 Of Past 11 Months

Tyler Durden's picture




 

The Chinese Schrodinger conundrum, in which two different distinct PMI indicators continue to paint opposite pictures of the economy, as explained first here, continues. Moments ago, the HSBC Flash PMI posted a decline from 49.3 in April to 48.7. This is the 7th consecutive month in which the economy is in a contraction according to HSBC, and 10th of the last 11. Needless to say, this is only half of the story, and we expect that the official Chinese PMI index will post another increase well into expansionary territory as the random number generator known as China_Economy.xls spews fresh gibberish every time F9 is hit. In the meantime, the spin has already begun, worse is better, and futures are higher simply because the expectation is that another perfectly futile RRR hike (which does virtually nothing for real cash circulating in the economy) will follow suit. Of course, if the number had come in over 50, the spin would be that China's economy has entered into a virtuous loop as goalseeking the narrative to comply with the central planners' market intervention continues.

From HSBC:

And comparing HSBC with official data (with the divergence growing):

and for all those coal aficionados looking for the big rip on the back of China's resurgence, some bad news: this Flash PMI print infers zero growth in China's Electricity Production YoY which we crudely assume means zero growth in coal demand...

 

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Wed, 05/23/2012 - 22:53 | 2457603 Everyman
Everyman's picture

EDZ goes up now?

Wed, 05/23/2012 - 22:57 | 2457614 CURWAR2012
CURWAR2012's picture

you mean keeps going up.... 3x leverage baby

Thu, 05/24/2012 - 01:23 | 2457940 Harlequin001
Harlequin001's picture

Bullish...

Wed, 05/23/2012 - 22:59 | 2457618 Eireann go Brach
Eireann go Brach's picture

Who flung dung at Mr Chung!

Wed, 05/23/2012 - 22:54 | 2457605 Cursive
Cursive's picture

Is this the slowest motion economic crash of all time?

Wed, 05/23/2012 - 23:08 | 2457632 ACP
ACP's picture

It's an all-out brawl between the Japanese and US Central banks as to who gets the record.

I think China will get the record for the least efficient use of money used for market manipulation.

As for Germany, after taking it in the pucker in two consecutive world wars, they learned the proper way to conquer nations.

Thu, 05/24/2012 - 02:12 | 2458024 MayerRothschild
MayerRothschild's picture

There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt.

Wed, 05/23/2012 - 22:55 | 2457607 Caviar Emptor
Caviar Emptor's picture

Yes, prices move up as economies move down. It's pretty simple really. And it's spreading! 

Wed, 05/23/2012 - 22:56 | 2457610 Yen Cross
Yen Cross's picture

 The world is addicted to " HOPIUM"  aka Central banking co-dependancy!     Go long the printing presses!

   The [ DXY] broke historic highs, and " snake OIL" , is cheap again. All is well for the Holiday.   /Heavy sarc...

Wed, 05/23/2012 - 23:01 | 2457617 techstrategy
techstrategy's picture

Hopefully retail will continue to scale out so the machines can fight one another... The MOMO scam, most notably performed by CMG which has outperformed the market after having criminal investigations announced is priceless.  nothing screams GTFO of the market like having 55PE company that guided for mid single digit comp store sales and now under criminal investigation outperform the market during May's downturn...

Wed, 05/23/2012 - 23:00 | 2457620 Conman
Conman's picture

Bad news is good news and no news is good news and fake news is the best news.

Check, selling everythign and putting into the ES. thank you central bankers.

Wed, 05/23/2012 - 23:01 | 2457629 Tsar Pointless
Tsar Pointless's picture

Heads - the rich and otherwise well-connected win. Tails - the rest of us useless eaters lose.

Silence, peasants! Pointless comments are being made on this Internet site!

Wed, 05/23/2012 - 23:02 | 2457631 pleseus
pleseus's picture

Bullish!  Buy Stocks.  US will decouple from a sinking Europe and China.

Wed, 05/23/2012 - 23:04 | 2457635 A Lunatic
A Lunatic's picture

Isn't a global economy a bitch?

Wed, 05/23/2012 - 23:06 | 2457643 Freebird
Freebird's picture

It's called biflation

Wed, 05/23/2012 - 23:08 | 2457649 BlackholeDivestment
Wed, 05/23/2012 - 23:09 | 2457655 centre.europe
centre.europe's picture

if us markets are manipulated then what about the communist ones 

from each according to his abilities - to everyone according to his needs

Wed, 05/23/2012 - 23:13 | 2457669 Trimmed Hedge
Trimmed Hedge's picture

Them there chartz are a bit confusing..

Could someone sum up? Thnx

Wed, 05/23/2012 - 23:21 | 2457690 Yen Cross
Yen Cross's picture

Which one?They all have different  scales of ( different trades). I'll gladly help you.

Thu, 05/24/2012 - 00:28 | 2457841 slewie the pi-rat
slewie the pi-rat's picture

a trimmed hedge always seems to have a scale all its own, Y/C

howya been?

it seems the china data = garbage in?

then, the ability arises to somehow "infer" zero growth in electricProduction and ditto for coal use

so that should keep preices down!  L0L!!!

 

Wed, 05/23/2012 - 23:35 | 2457725 pcrotty41@hotma...
pcrotty41@hotmail.com's picture

So I guess power outages in China are a thing of the past since zero hedge says electricity consumption is flat!  Yeah!  I can't wait to sit in the factories this summer and have no power outages!  Yeah!

Wed, 05/23/2012 - 23:44 | 2457754 Yen Cross
Yen Cross's picture

China can't take delivery on all the " Natural Resources", sitting on ships in harbors. power blackouts are the last thing China/PBOC is worried about.  All that EXCESS/ coal-oil-iron, is rusting on ships in their ports!

Thu, 05/24/2012 - 00:00 | 2457792 deflator
deflator's picture

I am sure the brain trust at the Hudson Institute/Mises.org(Washington D.C. thinktanks) people have a simple explaination for this...

 but as usual they are wrong...

Thu, 05/24/2012 - 00:29 | 2457844 Yen Cross
Yen Cross's picture

That was a fantastic comment.! +1

Wed, 05/23/2012 - 23:38 | 2457736 chump666
chump666's picture

Awesome, commodity prices tumble and housing bubbles in Australia and Canada still inflated due to goverment printing (bond/MBS purchases).

Next bailout: Australia and Canada IMF style

Wed, 05/23/2012 - 23:40 | 2457741 Yen Cross
Yen Cross's picture

 The [aud and cad], have debt /Surpluses in their budgets 666.

Wed, 05/23/2012 - 23:50 | 2457771 chump666
chump666's picture

They will have to hit austerity very quickly, if China takes out the commodity prices and these two countries are still inflating the housing bubble via their bond demand/rmbs purchases.

Sh*t will hit...

Hey Yen, you see the crappy short squeeze out of Asia and the mass of USD buying? 

Thu, 05/24/2012 - 00:19 | 2457822 Yen Cross
Yen Cross's picture

 I posted my thoughts, pre- China(flash -PMI) on the thread Tyler had up  15 minutes before. I looked at that chart Tyler put up yesterday.

 Italian/Bund- eur/usd divergence. I think the eur/usd is going to squeeze 300 pips.

   China can get really creative with 3 Trillion (YUAN) in FX reserves.  Thanks for asking 666.

Thu, 05/24/2012 - 07:51 | 2458313 Apostate2
Apostate2's picture

HSI closed at 18666. A bit spooky.

But then I am humming let's face the music and dance. 

Thu, 05/24/2012 - 01:53 | 2457992 q99x2
q99x2's picture

Time to fire up Austin's coal generators.

Thu, 05/24/2012 - 02:56 | 2458060 Floodmaster
Floodmaster's picture

<-Ben market (spy)

<-Bear market (SH)

Thu, 05/24/2012 - 03:34 | 2458091 _ConanTheLibert...
_ConanTheLibertarian_'s picture

 China_Economy.xls

LOL

Thu, 05/24/2012 - 03:37 | 2458095 _ConanTheLibert...
_ConanTheLibertarian_'s picture

 I have been in FXP since the start of the year. It went down but I held on. Now it's back at 30 again. (brag)I knew I was right.(/brag)

Thu, 05/24/2012 - 07:06 | 2458267 firstdivision
firstdivision's picture

Germany's PMI did well...for more easing that is.

Thu, 05/24/2012 - 09:46 | 2458570 silverdragon
silverdragon's picture

Nonesense data.

China is intentionally slowing down its economy to reduce inflation.

The real question is when will China take its foot off the break? There is no rush though, commodity prices dropping, reducing inflation etc

Gotta tidy things up before everything gets handed over to the next guy.

 

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