Fantasy beats reality in both the US and China

<p>Kia ora,</p><p>Welcome to Wednesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news open and fair availability of information is subject to wild distortions in two of the world's largest economies.</p><p>Americans are at their mid-term polls in an election that seems to turn on vast amounts of self-interested billionaire money and admitted-Russian interference - and for some reason these influences seem to be working in battle-ground contests. It seems likely a grim result for proper democracy is about to be rewarded, and again in the face of the popular vote. Gerrymandering wins again.</p><p>These results, and the American CPI data for October which is due on Friday (NZT) are the next big market movers.</p><p><a href="https://www.federalreserve.gov/releases/g19/current/default.htm" target="_blank"><strong>Their rise in consumer credit</strong></a> was slightly less than anticipated in September, but the miss was minor and indicates a sensible expansion, not anything to be concerned about. For one thing, it rose less than inflation, so isn't revealing any consumer debt stress.</p><p>And <a href="https://www.redbookresearch.com/" target="_blank"><strong>American retail sales</strong></a> chugged on last week, up +7.6% from the same week a year ago on a same-store basis.</p><p>In China, they are <a href="https://www.cs.com.cn/xwzx/hg/202211/t20221108_6306660.html" target="_blank"><strong>celebrating</strong></a> reporters and news media "loyal to the party", so they too are under the influence of powerful forces. Different to the US, but still malign. It is difficult to then work out the true state of the Chinese economy.</p><p>In Taiwan, compared with the same month last year, <a href="https://eng.stat.gov.tw/point.asp?index=8" target="_blank"><strong>exports fell in October</strong></a>, but only marginally and by far less than was expected. And there