Trading The Globe: Is Beijing Telling The Truth?

Thursday, 10 Sep 2009 | 5:46 PM ET

The latest economic data out of China is due to be released on Friday and once again it’s expected to show impressive results. By all accounts industrial output should be improving and retail sales should be strong.

Just two more signs that China is quickly returning to solid economic health.

And other data furnished by Beijing earlier in the week suggests much the same – China is booming -- while the US and Europe continue to struggle.

In fact that bullish data accounts for the run up in the FXI as you can see from this chart.

No news in those tidbits, except maybe they're not true.

Major investors are starting to question whether Beijing is telling the truth. "I think the story is getting harder and harder to believe," says widely followed billionaire investor and hedge fund manager Jim Chanos.

"And I'm not the only guy crying about the data coming out of China. You are seeing a lot more articles being written about it, a lot more skeptical voices being heard about just how accurate some of this data showing this Chinese miracle. And the fact of the matter is I don't think it’s very accurate at all."

Considering the data may be questionable, is there a better 'tell."

Zach Karabell says there is. In fact he tells the desk, "I wouldn’t pay attention to government statistics as a reason to invest in China, ever."

Instead he makes bets on China using numbers that can't easily be manipulated "such as the price of copper or GM’s auto sales in China. Those figures are real indicators of demand," he says.

What do you think? We want to know!

Trading the Globe
The Fast Money team asks whether China is telling the truth.
Chanos on China
James Chanos, president of Kynikos Associates, shares his thoughts on China.

To your left is the CNBC interview with Jim Chanos referenced above.

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Trader disclosure: On Sept. 10th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Najarian Owns (AAPL) & Short (AAPL) Calls; Najarian Owns (BAC) & Short (BAC) Calls: Najarian OWns (C) Calls: Najarian Owns (FCX), Owns (FCX) Put, Is Short (FCX) Calls; Najarian Owns (JPM) & Is Short (JPM) Calls; Najarian Owns (JOYG) & Short (JOYG) Calls; Najarian Owns (MS) And Is Short (MS) Call; Najarian Owns (MSFT) And Is Short (MSFT) Call; Najarian Owns (MOS) Call Spread; Najarian Owns (PALM) Calls; Najarian Owns (RIMM) Call Spread; Najarian Owns (TEVA); Najarian Owns (V) & Short (V) Calls; Najarian Owns (YHOO) Calls; J Najarian Owns (AAPL), (BAC), (C), (BX), (ESLR), (GS), (GLW), (HGSI), (NUE), (PDE), (SUN), (WFC); Seymour Owns (AA), (AAPL), (BAC), (BX), (DRY), (EEM); Seymour's Firm Is Short (FXI), (F), (RIG); Karabell Owns (AAPL), (BHP), (C), (FCX), (FXI), (IBM), (JPM), (MON), (NOK), (HON)

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