All those clueless hacks who warned us for years not to trust China's economic numbers, yet were so gullible to believe any coronavirus pandemic "data" released by Beijing are going to look pretty stupid right about now.
Hubei just released its latest round of coronavirus outbreak figures, and in a clear confirmation of the 'conspiracy theory' that China had altered the way it was reporting Covid-19 deaths and cases - clearly in order to suggest that things were improving and you should go back to work, while ideally buying stocks, the province at the epicenter of the Coronavirus pandemic just came clean and the numbers are stunning.
The number of cases exploded by 14,840, resulting in a total of 48,206 cases, including 13,332 clinically diagnose cases:
And just like that we are back on the quadratic growth path in new cases, as one would expect from an exponentially spreading viral pandemic.
This also means that JPM, which earlier today was delighted by how far the infected case load is from its "pessimistic" forecast...
... will have to dramatically change its narrative.
So what happened?
Recall that on Monday we published "This Is How China Is Rigging The Number Of Coronavirus Infections" (just two days after pointing out that "There Is Something Very Strange In The Latest Chinese Official Coronavirus Numbers") in which we explained that China on Feb 7 moved the goalposts by changing the definition of the term "infection" and that "going forward patients who tested positive for the virus but have no symptoms will no longer be regarded as confirmed."
Well, it appears that a few days later, China changed its mind and has reverted to the original definition of "infection" while also including "clinical diagonisis" to determine if a new infection had take place. This is how Hubei explained the change:.
With the deepening of understanding of new coronavirus pneumonia and the accumulation of experience in diagnosis and treatment, in view of the characteristics of the epidemic in Hubei Province, the General Office of the National Health and Health Commission and the Office of the State Administration of Traditional Chinese Medicine issued the "Diagnosis and Treatment Plan for New Coronavirus Infected Pneumonia (Trial (Version) "adds" clinical diagnosis "to the case diagnosis classification in Hubei Province, so that patients can receive standardized treatment according to confirmed cases as early as possible to further improve the success rate of treatment.
According to the plan, Hubei Province has recently conducted investigations on suspected cases and revised the diagnosis results, and newly diagnosed patients were diagnosed according to the new diagnosis classification. In order to be consistent with the classification of case diagnosis issued by other provinces across the country, starting today, Hubei Province will include the number of clinically diagnosed cases into the number of confirmed cases for publication.
Of course, the real reason for the original change as noted above was to give the impression that China was succeeding in containing the infection, which helped boost stocks - both in China and globally - sharply higher, and in the case of the S&P, to new all time highs.
As for the catastrophic revision, it may also explain why on Tuesday morning, China's CCTV reported that Hubei province removed its two top health officials, namely health commission head Liu Yingzi and party chief Zhang Jin from their posts. Almost as if, in retrospect, they were caught hiding something...
And while China can now claim it wants to be more transparent (which is odd for a nation that is still refusing to admit the US CDC on the ground) and wants a more comprehensive definition of "infection" because it is suddenly so concerned about all those people it ordered to go back to work on Monday (with new cases now emerging in people's workplaces forcing an immediate quarantine of all workers and co-workers), it somehow also changed the definition of "death", because at the same time as the explosion in new cases, which clearly indicates that the pandemic is now clearly out of control, the number of reported deaths in Hubei alone spiked by 242 to 1,310 (we are still waiting for the official number of deaths across all of China which will likely add quite a few more cases to the Hubei total).
What is absolutely terrifying about the chart above is that, of the 242 new deaths, more than double the previous day's total, is that according to the Hubei government, 135 are from the new "clinically diagnosed" category. This means that for weeks China was likely assigning coronavirus deaths to pneumonia (as we warned it was doing on Jan 25 in "This Is How China Is Hiding The True Number Of Coronavirus Deaths"), which also means that the real number of Coronavirus deaths is likely in the thousands.
For those curious what the now completely discredited fake coronavirus data, reported by China until today with the sole intent of boosting risk assets was, here is the full breakdown. Naturally none of these numbers matter anymore following today's sudden burst of Chinese truthiness.
In kneejerk reaction to the shocking surge in both new cases and deaths, Dow futures immediately plunged...
As did oil...
As is the yuan...
But at least gold is sharply higher:
Who could have seen that coming? The stock market wanted so badly to believe the Chinese data... bonds and commodities knew better. The clearest indication that all Chinese data was fake, however, came from Global Times Editor on Chief who earlier today tweeted that "New infection cases outside of Hubei have dropped for 8 consecutive days. It is now time for the US and other countries to actively consider resuming flights to China."
New infection cases outside of Hubei have dropped for 8 consecutive days. In Beijing with more than 21 million population, the daily new case of infection is around 10 recently. It is now time for the US and other countries to actively consider resuming flights to China.— Hu Xijin 胡锡进 (@HuXijin_GT) February 12, 2020
Ok you pathological liar.
Finally, we now look forward to what explanation China's global tourism impressario, WHO Director Tedros Adhanom best known as the "WHO Candidate Accused of Covering Up Epidemics", will come up with now after spending the past two weeks praising China's response and claiming there is no risk of a global pandemic, while criticizing the US for daring to halt flights to China.