Thursday, October 14, 2010

China September Trade Weakens Across the Board; No One Cares

I am being a tad tongue in cheek when I say all economic data is to be immediately ignored since nothing matters in a world of global liquidity tsunami but even I am taken aback on how NONE of the data matters.  This morning PPI came in hot on the headline number (that includes food and energy) - 0.4%.  That is 4.8% annualized.  Food alone rose 1.2%... in 1 month; feel free to annualize that.  I wrote about what Bernanke is going to do to food prices a month ago - I am just shocked the input prices have reacted like this already - corn up some 17% in 3 days... nice!

Yesterday on the earnings front, two of the bellweathers of the market that reported earnings (INTC, JPM) actually fell post report, but the market did not care one iota.  On the economic front, the one country on Earth every other country is looking for to help them create an economic miracle showed a sharp slowdown in both exports (representing DEMAND from other countries) and imports (representing EXPORTS from other countries).  Yet not only was it barely mentioned in the financial media, no market on Earth cares because fiat currency is flooding into every crevice.  Even better, the Chinese market did not care ... in fact the market has gone boom boom since it came back from holiday.

It truly is extraordinary times and something we're going to remember when we look back in a decade or two.  Although I expect we'll have many more extraordinary times with the lab experiments our global central banksters are running on us.   We are running a faith based market (buy on faith of money printing) in a ponzi economy - jaw dropping in all its awesomeness.

(again, if you read the rest of this post - remember to forget it immediately, as it means nothing)

Via AP:
  • China's September trade surplus stayed high at $16.9 billion. Export and import growth both weakened, hurt by slower global demand and a moderation in the rapid expansion of China's economy, the world's second-largest.
  • Export growth fell to 25.1% from August's 34.4% as Europe's financial crisis helped to cool global demand. Import growth also fell to 24.1% from August's 35.2%, a negative sign for economies that look to relatively robust China to drive sales of their goods.
  • "We'll probably continue to see more slowdown in trade because the global recovery is facing difficulties," said Citigroup economist Ken Peng. Demand for steel and some other materials is falling sharply as the government reins in a building boom triggered by its stimulus spending.

These are still extraordinary numbers (if they are completely accurate) taken within a vacuum.  But in the context of what has recently been reported it's a substantial slowdown.  Every country wants to export their way to recovery but even China who buys almost anything that moves has seen a sharp drop month over month, in what they are importing.  And as the world's factory, China's exports obviously reflect demand in Europe / U.S.  Maybe it's just a short term blip... but at this point all data is irrelevant I guess.  

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