Relevant:
- Tail Wags Dog Theory Blows Up
- China Manufacturing "Expands" at Faster Pace; China Manufacturing "Contracts" 6th Consecutive Month; Confused by Conflicting Headlines?
- China Caixin manufacturing PMI contracts in April
- China PMI in Contraction; IMF Wants Further China Tightening to Combat Inflation
- U.S. Dollar Collapse Could Occur at Any Time
2008-09-02 — blogspot.com
Gustav was not as severe as expected and China is contracting. Those are pretty strong reasons to expect crude to be dropping today. In this case, the long term implications of China slowing are far more important than news on Gustav. China is now in recession using the Purchasing Managers' Index as a guide instead of GDP.
It is a very critical question whether China's contraction is "real." Remember this data is for the July-August period. So how much of it is just the Olympics shutdown? I do think there will be some deceleration, as I'm not convinced the increase in China's domestic consumption is real (as opposed to simply a sign of inflation). Time will certainly tell.
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