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China Manufacturing Contracts As New Export Orders See Biggest 2 Month Drop Since Dec2008

Tyler Durden's picture




 

Suddenly this morning's RRR cut doesn't feel quite so much like China doing Europe a favor. Chinese Manufacturing PMI printed at a lower-than-expectations 49, signaling its first contraction (<50) since Feb 2009. As if it was really ever so, as clearly concerns were growing since we had the Flash PMIs earlier in the month. Across the board, sub-indices were weak with New Orders and New Export Orders falling significantly as the latter remains below 50 and Inventories rose significantly. Notably New Export Orders have now fallen the most over two months since Dec 2008.

The overall index fell below 50 for the first time since Feb 2009.

And New Orders and New Export Orders continue to slide.

But the two-month drop in New Export Orders is very significant - as bad as entering the previous dramatic downturn.

Charts: Bloomberg

UPDATE: HSBC China Manufacturing PMI prints at 47.7, deteriorating at fastest rate (and lowest level) in 32 Months

 

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Wed, 11/30/2011 - 21:48 | 1933470 JSchroe
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buy the f*cking dip...Bernanke will fix everything.

Wed, 11/30/2011 - 21:54 | 1933481 Mike2756
Mike2756's picture

Reality sinking in already? All they got was a lousy 3 day rally. It's kind of looking like the end of July again.

Thu, 12/01/2011 - 02:55 | 1934111 max2205
max2205's picture

Well that was good for a 7% pop on the China market....rally is speading world wide...lol (or not?!)

Thu, 12/01/2011 - 07:37 | 1934326 Popo
Popo's picture

Question.... what's the quickest way for China to get rid of a couple hundred million surplus laborers?

Because I have a feeling, that's their next move.

Thu, 12/01/2011 - 11:28 | 1934906 MachoMan
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export them to the african colonies...  to produce food, among other things.

Wed, 11/30/2011 - 21:51 | 1933474 StockInsanity
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Someone needs to order more Chinese Food

Sandusky's favorite, Sum Yung Boi

Wed, 11/30/2011 - 22:20 | 1933557 SHEEPFUKKER
SHEEPFUKKER's picture

Cum on sum yung guy

Thu, 12/01/2011 - 00:24 | 1933880 pragmatic hobo
pragmatic hobo's picture

hmmm ... I thought it was BANG DA BOI ... but what do I know about Chinese food anyway?

Wed, 11/30/2011 - 21:52 | 1933478 adr
adr's picture

no, no, no. AMERICAN MANUFACTURING WILL SAVE US!!!!!! Next month the Chicago PMI hits 9000. Hell it goes to one million!!!! When the stats are fantasy who cares.

Wed, 11/30/2011 - 22:21 | 1933559 SHEEPFUKKER
SHEEPFUKKER's picture

It feels like playing fantasy football. 

Wed, 11/30/2011 - 21:55 | 1933482 ziggy59
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Lower than expectations?? That can't be right.. who the heck is in charge of that press release?

Wed, 11/30/2011 - 22:30 | 1933579 SHEEPFUKKER
SHEEPFUKKER's picture

My expectations for this global economy are pretty low.  It would be pretty hard to not beat them. 

Thu, 12/01/2011 - 00:26 | 1933882 pragmatic hobo
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you know what this means ... Chinese central bank will now start to ease ... probably too late to stem the tide but it will be good for some kicks. Got copper?

Wed, 11/30/2011 - 21:56 | 1933484 DormRoom
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I've talked to some Chinese exchange students.  They say you need to own an apartment, if you want a girl to marry you.  So since there's a lot more males to females in China, thus huge male competition over wombs, real estate has become a huge dating issue.  I f you want to bone, you need to own an apartment.

Wed, 11/30/2011 - 21:57 | 1933496 midgetrannyporn
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Bang Dae Ho

Thu, 12/01/2011 - 00:21 | 1933872 trav7777
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i hear an iphone 4s can get the pussy over there

Thu, 12/01/2011 - 00:28 | 1933890 ucsbcanuck
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Dang! Now I know why that kid sold his kidney for an iPad! Pussy! 

Thu, 12/01/2011 - 01:59 | 1934021 DeadFred
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Probably cheaper to rent.

Thu, 12/01/2011 - 11:31 | 1934919 MachoMan
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It's not really any different anywhere...  and I also fail to see how anyone participating in such a regime can claim to see the situation as anything other than prostitution.

Wed, 11/30/2011 - 21:55 | 1933489 CrashisOptimistic
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If they're not getting orders, then what is being bought with all this supposed Christmas shopping?

Wed, 11/30/2011 - 22:02 | 1933515 Schmuck Raker
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Transient Self-Gratification?

Wed, 11/30/2011 - 21:57 | 1933497 jcaz
jcaz's picture

Wow, you mean that China WASN"T trying to help out the rest of the world with their rate cut?

Shocker.......

Wed, 11/30/2011 - 21:59 | 1933506 oogs66
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US and Europe aren't going to export themselves out of the problem, they will just stop importing.  What will China do then?

Wed, 11/30/2011 - 22:08 | 1933528 slewie the pi-rat
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print?

Wed, 11/30/2011 - 22:41 | 1933609 Teamtc321
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U.S. and Europe should tax China import's just as they do other's import's.  

Wed, 11/30/2011 - 22:11 | 1933537 lizzy36
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As a reminder in 2008 China's response to the "slowdown" (cough depression/revolution) was a stimulus equivalent to 20% of GDP (in the US that would have meant around a $4T stimulus).

Odd given this print that China doesn't have "want" to rescue the EU.

Wed, 11/30/2011 - 22:27 | 1933575 chump666
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...and credit expansion that would make your eyes bleed. 

Wed, 11/30/2011 - 22:25 | 1933569 chump666
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China is crashing into a stagflation hell spiral.  Frightening

Wed, 11/30/2011 - 22:32 | 1933585 ZeroPower
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Soft landing camp will increasingly have to start resorting to "IMPOSSIBRU!!!!"

Wed, 11/30/2011 - 23:47 | 1933789 TheFourthStooge-ing
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The soft landing camp will soon be shitting BRICs.

 

Thu, 12/01/2011 - 02:07 | 1934027 DeadFred
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Every country can get a temporary reprieve from domestic dissent by creating a strong foreign threat. China has a great deal of motive now to create a patriotic rallying event, most commonly this translates to a war. Sadly for the US this is not a card you get to play over and over and over again. We already had our 9/11 moment.

Wed, 11/30/2011 - 22:33 | 1933587 firstdivision
firstdivision's picture

So that's why the 10 year fell at 8.

Wed, 11/30/2011 - 22:35 | 1933591 lizzy36
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HSBC China November Final PMI 47.7 Vs October 51.0; Final PMI Down Vs Preliminary 48.0 [Dow Jones]

Wed, 11/30/2011 - 22:36 | 1933594 TheLooza
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HOW YOU PAY!

Wed, 11/30/2011 - 22:58 | 1933646 Mike2756
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http://www.gfmag.com/latestnews/latest-news-old.html?newsid=1.2092566E7

 

Hmmm...

"Thankfully, easing price pressures should provide some comfort to central bank officials and may open the scope for easing if activity tumbles more than expected in the coming months," Man said. 
Input prices continued to rise in November, but output prices fell for the first time in four months, HSBC said. 

Wed, 11/30/2011 - 22:58 | 1933652 Georgesblog
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There's a novel thought. China's production economy has to take desperate measures to crank the factories back up. They have to do that by competing with their currency. It wasn't so long ago that they wouldn't float their currency against other currencies. Now, they have to bend to keep civil unrest at bay. People without paychecks can't buy things.

 http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/

Wed, 11/30/2011 - 23:08 | 1933678 chump666
chump666's picture

ZH post a chart of Chinese real deposit rates which are negative!  China is about to go into a world of hurt.  They print more...FUBAR x10

Wed, 11/30/2011 - 23:11 | 1933684 Caviar Emptor
Caviar Emptor's picture

Does the real economy really matter? Is the actual business of America business? (Or anywhere else in the world for that matter?) Do such things as sales, profits, demand, supply or competition mean a thing? 

When an economy becomes sufficiently contrived and controlled the answer is NO. Politics will trump innovation, monetary policy will trump supply/demand and well-connected cronies will always starve out any 'competition'. The next steps in the evolution are inevitable: you'll be told what to buy, at what price and who to work for and for how much 

Thu, 12/01/2011 - 00:19 | 1933863 Teamtc321
Teamtc321's picture

"Does the real economy really matter? Is the actual business of America business? (Or anywhere else in the world for that matter?) Do such things as sales, profits, demand, supply or competition mean a thing?" 

 

Only if you are a small business owner. The one with your own nut's on the line. They are flipping this bs system off, it's like trying to crawl through mudd 4' deep.

 

And they in the house wonder how to get un-employment down and wage growth up, lol.   

Wed, 11/30/2011 - 23:18 | 1933697 Everybodys All ...
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Does this prompt the Chinese to some contrived conflict? Time will tell.

Wed, 11/30/2011 - 23:29 | 1933731 Randall Cabot
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Confucius say: Contraction bullish, buy stocks!

http://finance.yahoo.com/q?s=%5ESSEC

Wed, 11/30/2011 - 23:36 | 1933750 MFL8240
MFL8240's picture

Lets make sure I get this.  China which sells most of its shit to the US is not producing as much because consumption in the US is down, yet the US reported to the sheep today that the PMI was up.  ahahahahahahahahah!  Clown show!!

Wed, 11/30/2011 - 23:39 | 1933760 RobotTrader
Wed, 11/30/2011 - 23:56 | 1933811 SAME AS IT EVER WAS
SAME AS IT EVER WAS's picture

No fucking shit sherlock, this is a give me-no brainer rally, but how can anyone with even a grain of rationality trust it.

Thu, 12/01/2011 - 00:22 | 1933876 Teamtc321
Teamtc321's picture

You can't imo, trader's all over feel like it is there first time in the ocean with 10' seas. Just a matter of time till you get smashed into a rock. 

Wed, 11/30/2011 - 23:49 | 1933794 SAME AS IT EVER WAS
SAME AS IT EVER WAS's picture

China needs to now take lessons from the U.S. on how to really fudge...Err, Uhhh, present economic data.

Thu, 12/01/2011 - 00:09 | 1933844 LookingWithAmazement
LookingWithAmazement's picture

China can and will recover by lowering requirements. Bye bye "crisis".

Thu, 12/01/2011 - 02:00 | 1934022 Caviar Emptor
Caviar Emptor's picture

We don't need no stinkin' manufacturing!

Thu, 12/01/2011 - 02:21 | 1934046 navy62802
navy62802's picture

When you can just print money in order to manufacture profits, why should we worry about a slow-down in productive capacity? Right? Riiiight ...

Thu, 12/01/2011 - 04:24 | 1934201 Belarusian Bull
Belarusian Bull's picture

China actually has more advantages in this systemic collapse than most of the countries.

1)It can produce most of the stuff for itself.

2)Being a very poor country, sagnificant drop in living standards won't impact it's stability very much.

3)Any inner resistance will be suppressed  by China's zerg army.

China's regime greatest advantage is that they don't really have to reckon with the people at all.

Thu, 12/01/2011 - 08:28 | 1934406 Element
Element's picture

But can they buy oil, coal, and uranium if they're broke, and currency nearly worthless? They can say its pegged to the dollar, and therefore dollar equivalent value, but what if people don't want it in exchange for raw materials? The only way full systemic collapse works for them is if commodity-currencies are in the toilet as well and industrial commodities crash spectacularly, and that should follow any second global trade collapse.

And they do have to deal with their people, they have warned and admitted recently that any economic collapse in China would lead to extreme outcomes that the rest of the world really should do everything possible to avoid. Beijing came right out and said that earlier this year, and used it as an excuse to not unpeg or raise the exhange rate.

Thu, 12/01/2011 - 08:12 | 1934370 Element
Element's picture

Wow, I've been ignoring China for a few months, too many doom stories in 2010 and early 2011, and it all got old fast.

I shouldn't be surprised by this but I am.

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