Thursday, October 20, 2011

China Spin

It's incredible how the same set of data can be spun in completely different ways, depending on the writer's bias.

A few days ago, China's Canadian lumber imports for September were released. Lumber is a key input in the construction industry, and so this number is often used to gauge the relative strength of China's economy.

But apparently, whether you believe China is in the midst of a deflating housing bubble, or whether you think China is on a sustainable growth path, the data proved you right. This is a good example of confirmation bias, a human tendency that causes us to only see things in new information that agree with our preconceived notions.

Here are a couple of example articles on the subject that appear to see the data through a preconceived lens: the bullish bias, and the bearish bias.

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