China’s Great ‘Commodities for Cash’ Scheme

by Ralph Benko, Daily Reckoning.com:

The big news yesterday was the Chinese trade data, which blew expectations out of the water. The Aussie dollar surged, as did opinions over whether the data was ‘real’ or not. Being a China bear, our first reaction is to pooh-pooh the data. After all, it’s widely acknowledged you need to take much of the official data releases with a grain of salt and a shot of tequila.

But retreating to confirmation bias isn’t good analysis, so we looked around to try and find out the real story behind the data. We’ll get to the bottom of that in a moment; it’s an interesting story!

First though, let’s take a look at CBA boss Ian Narev’s self-serving comments after the announcement of the bank’s record half-yearly profit. Self-serving comments by CEOs are nothing new, but when it comes from a banker it’s worth examining, because the view they have of their organisations is just as inflated as the profits they are making.

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