The “Emperor’s New Clothes” by Hans Christian Andersen tells of a pair of dishonest weavers who sell the Emperor a new suit of clothes, saying that is invisible to those who are unfit for their positions, incompetent, or stupid. When the Emperor parades before his subjects in his new clothes, no one is brave enough to tell him that he is naked – until a child says, “But he isn’t wearing anything at all!”
A similar denouement seems to be underway in China, where a government once believed to be economically all-powerful is failing to reverse a rapid slowdown. Investors around the world seem to be finally seeing the fundamentals laid bare this morning, after a Chinese manufacturing survey was released showing that activity contracted for a third month, and closely-correlated South Korea reported that exports had fallen 15.8 percent on a year-over-year basis. This caps a long series of disappointing economic data releases, and comes despite a raft of stimulus measures launched over the last year. In short, China’s economic emperors appear to be missing their clothes.
Read the rest of the article Markets await US Jobs report