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Pop and Fizzle

Pop and Fizzle. Benjamin Tal, Senior Economist. A Lost Decade. US Housing – Far From Normal. Negative Equity in US Housing Market. Credit Availability Still Looks Tight. Number of Failed Financial Institutions (US). US Labour Market: Still Long Way to Full Employment.

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Pop and Fizzle

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  1. Pop and Fizzle Benjamin Tal, Senior Economist

  2. A Lost Decade

  3. US Housing – Far From Normal

  4. Negative Equity in US Housing Market

  5. Credit Availability Still Looks Tight

  6. Number of Failed Financial Institutions (US)

  7. US Labour Market: Still Long Way to Full Employment

  8. Mega Bust in US Business Spending Source: BEA, CIBC

  9. Without Stimulus Actual Impact of Fiscal Stimulus in 2009-Q3 Source: CBO, CIBC

  10. Contribution of US Stimulus Package to US GDP Growth (%-pts)

  11. FED Financing US Budget Deficit

  12. Massive Fiscal Stimulus Worldwide in 2009/10 Source: IMF

  13. Monthly New Yuan Loans by Chinese Banks Source: The People’s Bank of China

  14. Commodities Rally May Overshoot

  15. C$ Overvalued Relative to Commodities

  16. Strong Rebound in Domestic Demand

  17. The Job Market is Improving Source: Statistics Canada, CIBC

  18. Canadian House Prices Starting to Overshoot Source: CREA, IMF, CIBC

  19. Housing: An Important Economic Driver Source: CREA, Statistics Canada, Bank of Canada, CIBC

  20. Replacement Investment Provides Only Temporary Boost Source: Statistics Canada, CIBC

  21. Canadian Economy:In Like a Lion, Out Like a Lamb

  22. Bank of Canada Has Hiked Prematurely in Past

  23. Credit Continued To Expand During the Recession Source: Statistics Canada, CIBC

  24. Average Annual Change in Consumer Bankruptcies Source: Statistics Canada, CIBC

  25. Mortgage Arrears Influenced Mostly by Unemployment, Not by Interest Rates Source: Statistics Canada, CIBC

  26. Number of Households 12.5 million Mortgage No-Mortgage Rent 39.9% 28.9% 31.2% LVR* <80% LVR* >80% DSR** <40% DSR** >40% 27.8% 12.1% DSR** <40% DSR** >40% * Loan-to-value ratio ** Debt-service ratio 9.3% 2.8% 30.1% 1.1% Few Canadians at Risk on Mortgage Burden... So Far Source: CMHC, Ipsos Reid’s CFM, Statistics Canada, CIBC

  27. Low Income Canadians Rely Less on VRM Source: Ipsos Reid’s CFM, CIBC

  28. Money Market Fund Source: IFIC, CIBC

  29. 10-Year Lagged Cyclically Adjusted TSX PE Ratio

  30. Dividend Stocks Have Done Well, Long Term (right) and Recently (left) Source: S&P, CIBC

  31. Value of $100 Invested in TSX Comp. in 1975

  32. Indicated Dividend Yield (%) Telecommunication Services 5.5 Utilities 5.1 Real Estate 5.0 Media 4.7 Diversified Financials 4.2 Health Care Equipment & Services 4.0 Banks 4.0 Insurance 3.8 Eight Highest Yielding TSX Industry Groups Source: Bloomberg, CIBC

  33. Question & Answer This material was prepared for investment professionals only and is not for public distribution. It is for informational purposes only and is not intended to convey investment, legal, or tax advice. The material and/or its contents may not be reproduced without the express written consent of Renaissance Investments.

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