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Goldilocks Is Back - China PMI Rises To 50.5, Modest Beat Of Expectations, Shy Of Whisper Number
China's goal-seeked economy performed admirably in January, and its Manufacturing PMI came absolutely golidlocks at 50.5, an increase from 50.3, previously, just modestly beating Wall Street expectations of a slight contraction of 40.6, yet a less than earlier whisper numbers which put it at 52. As such, thereis absolutely no indication if the PBoC will further tighten or ease in the next month, just as the PBoC likes it, because while many have been demanding easing in the last several weeks, and especially the housing market, the reality is that hot pockets of inflation still remain. Furthermore, the last thing China needs is to proceed with full on easing just as Bernanke goes ahead and launches QE x which will export more hot money, and thus inflation, to China than anywhere else, with the possible exception of gold.
And here are some observations from Bloomberg's Michael McDonough:
- Headline PMI remained above 50 for two consecutive months; another 50-plus reading in Feb. would be very positive sign,
- Underlying data still weak with new export orders falling to 46.9 from 48.6, while new orders rose to 50.4
- Typically if this were true bottom, all forward-looking sub-components would rise above 50 in a month prior or the same month as headline index
- Building domestic pressure coupled with foreign risks should continue to weigh on the Chinese economy, including the PMI going forward, forcing policy makers to cut RRR and eventually policy rates once they are convinced threat of inflation has been squelched
PMI charted:
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A whisper number in China?
BWAHAHHAAAA! A FAKE number squared!
Not so fast.
Jan. 31, 2012, 9:51 p.m. EST
China HSBC PMI shows more contraction in January
By MarketWatchHONG KONG (MarketWatch) -- Chinese manufacturing activity remained stuck in contraction in January, according to HSBC's Purchasing Managers' Index released Wednesday, putting the survey results at odds with an official Chinese gauge released earlier in the day. The HSBC survey's final print on China's PMI came in at 48.8, unchanged from a preliminary reading released last month and a little ahead of HSBC's December measure at 48.7. But the PMI reading was still below the threshold of 50, which separates expansion and contraction. The data also differed from a China Federation of Logistics & Purchasing survey, which earlier Wednesday put the country's PMI reading for January at 50.5, rising from December's 50.3 and surprising analysts who had estimated the official gauge to drop to 49.5
http://www.marketwatch.com/story/story?Guid=ee787024-c87d-4456-9ed6-cfe2e2e94290&link=MW_home_latest_news
HSBC data focuses too much on small to medium size businesses. Not reliable.
Actually it makes perfect sense. Of all the times in the year, it is pre-holiday season that Chinese become net consumers. So of course, all those fake coins and fake plastic dragons....small and medium businesses.
Come march, perhaps a global thud into the reality of collapse.
ori
/are-we-all-so-fast-asleep/
China’s very mysterious data
By Ambrose Evans-PritchardHYPERLINK "http://blogs.telegraph.co.uk/finance/category/economics/"EconomicsLast updated: January 26th, 2012
A quick observation.
I could not help noticing that China’s imports from Japan fell 16.2pc in December. Imports from Taiwan fell 6.2pc.
The Shanghai Container Freight Index fell 1.4pc to a record low of 919.44 in November, after sliding relentlessly for several months. It has picked up slightly since.
The Baltic Dry Index measuring freight rates for ores, grains, and bulk goods, has fallen 44pc over the last year. Kasper Moller from Maersk in Beijing said weak Chinese demand for iron ore was the key culprit.
Cautionary warning. The BDI index also reflects the shipping glut, so it is not a pure indicator.
However, rail, road, river and air freight volume for the whole of China fell to 31780m tons in November (latest data), from 32340m tons in October. Not a big fall, but still negative. (National Bureau of Statistics of China.)
Chinese electricity use was flat in over the Autumn, with a sharp fall in the (year-on-year) growth rates from 8.9pc in September, to 8pc in October, and 7.7pc in December.
Residential investment has been contracting on a monthly basis, and of course property prices are now falling in all but two of China’s 70 largest cities.
So how did China pull off an economic growth rate of 8.9pc in the fourth quarter?
Beats me.
I strongly suspect that the trade and power data reveal the true state of China’s economy.
There clearly was a pick up in early January but I stick to my view that China has inflated its credit bubble beyond the limits of safety – an increase of 100pc of GDP in five years, or twice US credit growth from 2002-2007 – and that Beijing cannot continue to gain much traction with this sort of artificial stimulus.
Indeed, the extra boost to GDP from each extra yuan of credit has collapsed, according to Fitch Ratings.
A final point. There is a widespread misunderstanding that China’s households can easily come to the rescue by cranking up spending because they have the world’s highest savings rate, and consumption is just 36pc of GDP.
Prof Michael Pettis from Beijing University puts that one to rest. The Chinese do not have a much higher personal savings rate than other East Asians. The reason why consumption is so low is that wages are low, the worker share of GDP is low, and the whole economy is massively deformed and tilted towards excess investment.
This is deeply structural. It cannot be changed with a flick of the fingers, and contains the seeds of its own destruction.
China is a marvellous country. I wish them the best. But they have not found the secret formula for perpetual uber-growth.
No such formula exists.
http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100014380/china%E2%80%99s-very-mysterious-data/
china is practically based on rip-offs.
first worthless trinkets, then watches and handbags, then truffles (per 60 minutes), now $1000+ bottles of bordeaux conveniently relabeled "chateux margo".
but the most satisfying aspect is how their entire culture will collapse eventually.
4-2-1 bitchez !!!
death to us treasuries
I am long 30 year US treasuries and 3X short the S&P with 96% of my assets. Come and get me!
SO your cash position and/or gold investment is only 4%? Wow. Why not do yourself a favor and go all in gold. Way more fun.
My favorite part was QE x ........
No gold. Not against it. Definitely cool looking, heavy, has been an important part of monetary history, etc. But, it doesn't have a yield, so I have no idea what it will do long-term. Best of luck though. Gold bugs are fine by me.
Silver on the other hand is a commodity which I am not afraid to short when it goes parabolic. Reasonably plentiful and high prices always have led to a glut.
J. Pierpoint? Is that you?
What's te yield on your 3x inverse?
Ah! Great question. You caught me. SPXU is a NEGATIVE yield as it decays. Full disclosure: the vast bulk of my assets are in US treasuries. The SPXU position is far smaller, but growing. I have been as high as 66% SPXU.
We have a long way till we get to that point. Bulls need to run! Print!!!
And the yield in USTs?
On the 30 year, when I purchased, 4.7%.
For the love of god man get out of SPXU. You will only make money if the index goes down without substantial volatility. That is exceptionally unlikely. Just get a futures account and sell the ES if you must.
If the S&P 500 can close @ 1400, for three consecutive weeks in a row, I'll close my SPXU position. Until then, on every big price spike, I'm doubling my position.
Best to all,
The Monkey
Thus here is the fudge, just like the Jan 1st fudge, that could be argued set off the Jan 2012 meltup. Point is with the CNY a crap currency the Chinese will keep buying USDs (on a inflation hedge). With neg real rates on their deposits, they 1. either buy more property (which is now crashing) 2. Equities (which have crashed). So its USDs. Just like India. Both countries are heading towards a full blown meltdown.
China will buy Gold tho but probably not enough, USA vs. China in a currency war showdown
Going to be really interesting. The Chinese will weaken the Yuan, the US will flip and try and weaken USD against ALL of Asia. Asia will flip and weakening their currencies against the US. All the while 99% Asian companies/private business are going to hedge on USDs (inflation) and get squeezed to hell. A mess.
Governments should stay the F*ck out of the markets.
Yeah its a real bitch but for the people that understand these things Gold & Silver is the best choice you can make. Its like having a CD when they actually paid interest
I agree.
it's not gold but OIL that's the problem. the entirety of the "scam of the century" is based on big oil getting the cheap goo the China "so they can make more worthless widgets than you can possibly imagine for all of planet earth." sure...go ahead..."buy gold"! if the price of oil soars to $250 a barrel over the next few weeks...or worse "it just stops coming"...look out below! now that the totally insane idea of building pipeline to "anywhere but Canada and America" has been shelved...throw in Iran, Libya off line, Iraq in revolution...i sense sweaty palms. BRING IT!
China is going to be coming back with a vengeance.
Want proof?
Check out the huge volume in U.S. Steel today.
http://stockcharts.com/h-sc/ui?s=X&p=D&yr=0&mn=9&dy=0&id=p83805199739
How the fuck stupid are you anyway?
A huge volume day in USX... & that's it... The evolution of mankind has jumped the tracks...
You know... Sometimes you're funny... Other times you just seem bored & idiotic...
You know?... I pass underneath some railroad tracks EVERY SINGLE FUCKING DAY... There's about a 1 in 5 chance that I see a freightload of coal being moved to some steel producers... I haven't seen ONE cargo load of coal in the past two months... So the Chinese must be making fucking steel out of the asses of bitchez in LULULEMON leotards...
It will sell off tomorrow.
Anything can happen short-term. But, China is going to hard land, whether it's this year or 2015 is anyone's guess.
china is not landing hard. they havent even taken off yet. can you comprehend 1.3 billion people? thats four of the good ol usas combined. their middle class will be more populous than our entire country within a few years!! do yourself a favor and open a renminbi denominated bank account because the chinese currency will be worth much more than any other currency on the world stage in about 10 years time....
Everybody has an opinion. That's all anyone has to offer really, just an opinion. After studying a lot of data, I think China is heading for a hard landing. There is nothing new that you are telling me, but, thank you for chiming in. One never knows for sure!
common sense trumps data
fascinating...and glad you noticed btw. They missed by a mile...and the stock price soared. State sponsered real estate bubbles don't work in the USA...and they won't work in China either. Still..."that's a lot of money"...and it goes a long way towards explaining why in spite of all these MASSIVE CONTINENTAL SCALE economic collapses the price of copper, oil and ESPECIALLY steel (which is pretty much in perpetual glut and has been for decades) refuse to go down. It doesn't hurt that the bulk of automobile mfg is state owned. As has been reported here the glut of vehicles is truly extraordinary. Eventually the "world will catch up to their own glut" as well...and start giving a whole new meaning to the term "moving the metal."
No soup for the Aussies. Shitty #'s all around. The cyn #'s that bearly(barely) beat a dead cat bounce. South Korea had shitty #'s earlier, along with the shitty usd #'s. It's SHITSVILLE Folks.
I don't trust those slope heads any ways. I'll bet the true number is in the mid 49's. If they raise the (RRR ) further, it will cause the YUAN to strengthen.
Ahhh Goldilocks was so 1990s. Now it's morphed into biflation blues. The economy is BOTH too hot and too cold at the same time. Hot pockets of inflation side by side with fear of deflationary collapse.
That would be a fair assessment.
What about a nice cute story instead?
http://www.thelocal.se/38798/20120130/
Swedish cannibal finds vampire love behind barsAfter meeting at a high security ward and chatting on the internet, “the Skara Cannibal” and the “Vampire Woman”, two infamous Swedish murderers, have found love and are hoping to get married.
If you clowns think China is going to slow down and enter a huge recession...
Then your "precious" gold will get slaughtered as well.
I'm bullish on both gold and stocks at the moment.
I think the Shanghai just went through a correction, similar to the Dow's corrections in its early bull years.
You cannot underestimate the gambling fever of the Chinese.
Just wait until they shuffle from the Pai Gow tables to the stock casino.
It will be hands down the biggest stock market bubble of all time.
The biggest bubble in history was your parent's expectations when you were born. That was the peak of the bubble. It's been downhill from there.
It will be hands down the biggest stock market bubble of all time.
and on a long enough timeline... it will all become WORTHLESS... Just like your posts...
What if yuan runs to gold instead of stocks/real estate?
China and India are already running to xau. Whats your point?
And let's say it coninues, and yuan/rupee ignores stocks, real estate, and the cash keeps flowing to gold....and keeps flowing....
There is only so much gold my friend. Assets that have tangible value will be purchased. I see your doomsday point though.
( xag , ammo, appl, nflx, m-16's, food , hndy-wyps... ect) AmI right?
And water proof matches and lulu.
Easy there " Over Kill". No one is suggesting a China recession. Have fun trading those "gold painted wooden nickels" , in Macau.
P.S. I didn't junk you.
I think it's time you got a grip of yourself and let go of what you are holding in your right hand. Seriously though, do you think a casino mentality can rebound and underwrite an economy?
Robo, you may get a bad rap, but as far as I'm concerned you're added value. I'm on the opposite side of the trade, but get a kick out of your posts.
Entertainment value, that's the phrase you're looking for. And I agree. Sort of like MDB. I'm sometimes awestruck by the poker-faced sarcasm.
Robo - I neither junk nor dismiss you. You're not stupid.
Just wrong.
If China slows down and the world enters deflation due to its growth engine stalling out, then there will be more currency printing: gold positive.
If China does not slow down and the world economy chugs along: gold postive for a while at least. The turn will come when real interest rates in a globally substantial currency go positive. Not happening any time soon even best case.
Worst story for gold that has happened recently is its circulation as the repo collateral of last resort: put in play by financial institutions, it gets sold into the market and the price is temporarily driven down. Creates entry points for the wise and gut checks for the weak.
Lewy and robo at the special ( economic olympics) . Sponsered by Howard Cosells ghost! I can't wait to see robotard trying to justify 5$ a roll toilet paper as " bed Sheets!" LMAO!
The trade no one is talking about is EUR/JPY....
....yikes!
Everyone is talking about eur/jpy. Enter at your own risk. Personally I like the aud/jpy leg with tight stops, Intervention from ( BoJ).
It's a great short if you have the stomach for it. Just keep a reverse close buy when your stop gets hit.
The move really tells the story of the two areas as to what happens in the first stages of a bankrupt State and what happens in the end stages.
The move is really simple. Do you want to short a currency at historic lows, or a currency at semi historic highs? The aud is a "risk barometer. It's correlation has diverged greatly from the eur. We take a 5% correction in the spx , and that translates into a status quo in the euro. I am willing to bet the gain, would be 5% in the aud/usd short. Especially after the RBA meetings next week.
Just a thought?
It might be Romney/Newt in November. A black eye to the Tea Party but with a consolation prize
Romney/Daniels. Mitch isn't running for governor again, and as a VP there won't be as much scrutiny on his college drug arrest or his wife leaving him, running off with another guy, then coming back.
Romney/Rubio....
Fixed.
$
Tyler Durden, how about a peice on Gingrich's Bohemian Grove activities?
i before e, except after c.
Teach a man to fish, and he eats for a lifetime...or at least until the radiation from Fukushima bioamplifies through the ocean foodchain.
That was well received. Muchas Gracias.
+1, good form YC
SURPRISE!!!!
China lies also!
Ain't it somethin?
China owns the copyright on " Lying Rugs". Remember the early CPI release that f..ked traders a few weeks ago?
Debt now at 15.3 trillion.
http://www.treasurydirect.gov/NP/BPDLogin?application=np
15,295,052,578,718.01
Awesome. Wonder what the debt/GDP will be after Q1 when GDP contracts.
Here is a good one for Aussie traders, and bank funding costs. If the link is shortened, google " will Australia's banks feel the squeeze /WSJ. Next we can go into emerging funds/and bond flows.
2nd worst market (shanghai is the 1st) in the region is the ASX200.
I think Asia is in trouble, Japan could be a problem in 2012. China is a problem. Very messy, Korea posts a trade deficit etc etc etc
hedge funds will start to short australia
Feel the cheese
http://www.abc.net.au/news/2012-01-30/fitch-threatens-to-downgrade-aussi...
Next will be Aussie bonds. Then finally we can short the AUD, payback.
And HSBC says the number is 48.8...mildly growing or mildly contracting. You pick'm.
Anyone see Steve Bridges impersonation of Obama? Very funny comment - as Obama he says (picture Obama speaking) "we need to stop borrowing from the Chinese - because an hour later we feel the need to borrow more."
Does anybody think that US government data is better? Hah, hah!
Read this.
http://www.nypost.com/p/news/business/dial_if_this_story_makes_your_eyes_mUsVVoUaMuMRt4AK2DlXxJ
The government office employees did the calculations while masturbating.
This is a bank PDF file. Enjoy http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?I...
hahahaha two PMI's, HSBC is probably more on the money. Shanghai tanks as does Australian markets.
Follow the money. 2012 reality is about to kick in.
Nasty.
HSBC is less faked. If they actually show the real number (a disaster), the communists will close store.
True, since HSBC is all over Asia, HK etc.
kinda right
http://www.nakedcapitalism.com/2012/01/satyajit-das-top-secret-the-chine...’s-briefing-paper-on-australias-economy-part-i.html
KINDA? Have you ever used a stop loss?
OK correction, ABSAFUCKINLUTELY! But I do think a China panic will draw one last gasp for Aussie RE as Chinese investors chase hard assets abroad. Beyond that, -50% slash job.
You are missing the point. I understand your frustration though. Australia has no intention of letting China absorb their Real Estate. The aud is undervalued enough as it is. Remember that commodites are priced in usd, and aud is pegged to spx. Thanks for taking the time for discussion. I appreciate that.
I must of missed your point completely if that's what you meant.
Australia has no intention of letting China absorb their Real Estate. Australians will whore their RE market out like anyone else. There's no protection from the Chinese or Indians or anyone for that matter.
AUD is certainly not undervalued. It's overbought and about to hit some massive resistance. Don't expect it to make an all time high.
I know the AUD is a commodity currency but how is it pegged to SPX? I have never heard or realized that before. Please provide support.
political freedom is coming to China, because of the work of western Christian organizations. When it comes there is going to be a huge influx of people out of the Three-Self [false] Church and into house churches. This will put pressure on the N Korean regime.
political freedom is coming to China, because of the work of western Christian organizations. When it comes there is going to be a huge influx of people out of the Three-Self [false] Church and into house churches. This will put pressure on the N Korean regime.
You've never lived in communism, I have. Just stop dreaming, sir.
Nobody gives up power without blood. Not to mention chinese culture.
Trying to control a country and a nation thru the implant of disguised christian indoctrination like the dark age colonization???
Wanna try to repeat the past pathetic and disgusting history??? :-|
what a wishful thinking!!
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Tragedy And Hope: A History Of The World In Our Time (pdf, 5.4mb)