Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

Sharp Decline in Philly Fed Mfg. Index (by SB)

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Data released today (Thursday) shows a sharp decline in the
Philly Fed Manufacturing Index, as shown on the graph below.

Since
"changes in businesses' sentiment can be an early signal of future economic
activity such as spending, hiring, and investment," it's worth noting this
sharp reversal of the small rally of recent months…particularly as it relates
to the overall longer-term downtrend from the peak in March of 2011. As you can
see, this downtrend is much steeper than the one from 2004 leading to the big
decline in 2008/09…this may be forecasting a repeat of such a downturn in
manufacturing.

Declining Industrial Production in Europe (by SB)

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Data released today (Wednesday) shows that Industrial
Production in Europe continues to decline, with this latest month's data sharply
below that presented in July of 2008, as shown on the graph below.

As you can see, after
a minor rebound from the lows in 2009, production has been in decline from March
of 2010…mirroring the pattern leading up to the deeply depressed lows
throughout much of 2009. This is reflective of the unemployment and recessionary conditions currently prevalent
in Europe. The LTRO 1 & 2 cash injections by the ECB have not had a
(lasting) positive impact in this particular segment of Europe's economy.
European markets are currently down at the time of my writing this post.

Decline in China Money Supply and Loan Demand (by SB)

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Data released today (Monday) shows that Money Supply dipped in
October in China, as shown on the graph below.

"Early in the economic
cycle an increasing supply of money leads to additional spending and investment,
and later in the cycle expanding money supply leads to
inflation." Since it has been in an early cycle since the
beginning of 2012, this latest dip may or may not be a warning of further
weakness to come…one to consider monitoring over the next few months.

New
Loans also fell for October, as shown on the graph below. "Consumers and
businesses tend to seek credit when they are confident in their future financial
position and feel comfortable spending money." This data is
showing that loan demand has been on the decline since April of this
year.

So, although
there has been an expansion of money supply this year, loan demand has been
declining. Unless loan demand picks up and is sustained, how can there
be economic confidence and expansion in China?