Perspective Perspective Benj amin Tal December 2015 CONFIDENTIAL - - PDF document

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Dec 13, 2023 433 likes •535 views

11/27/2015 Perspective Perspective Benj amin Tal December 2015 CONFIDENTIAL BoCs Cut Did Little to Accelerate Household Borrowing Household Credit - Household Credit Average m/ m % Growth 0.50 m/ m % chg, 0.45 % 3-mo moving avg

SLIDE 1

11/27/2015 1

December 2015

CONFIDENTIAL

Perspective Perspective

Benj amin Tal BoC’s Cut Did Little to Accelerate Household Borrowing

CONFIDENTIAL - 1 - S

urce: Bank of Canada, CIBC

0.20 0.25 0.30 0.35 0.40 0.45 0.50 13 14 15

m/ m % chg, 3-mo moving avg BoC eases policy

Household Credit

0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45 Avg Jan-Jun 2014 Avg Jan-Jun 2015 Household Credit - Average m/ m % Growth

SLIDE 2

11/27/2015 2

We Are Not So Special

CONFIDENTIAL - 2 - S

urce: Bloomberg, CIBC
60%
50%
40%
30%
20%
10%

0% 10% 20% USD/ CHF USD/ CNY USD/ HKD USD/ JPY USD/ NZD USD/ AUD USD/ EUR USD/ CAD USD/ S EK USD/ MXN USD/ NOK USD/ INR USD/ BRL Change in FX Rate vs. US$ Since Jan 2008

Canadian Manufacturing Labour Pay Now Lower

CONFIDENTIAL - 3 - S

urce: BLS

, S t at ist ics Canada, CIBC

15 20 25 30 35 40 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15E USA Cda (in US$) Hourly Compensation in Mfg (US$/ hr)

SLIDE 3

11/27/2015 3

Canadian Manufacturing: Inventory/Shipments Ratio

CONFIDENTIAL - 4 - S

urce: S

t at ist ics Canada, CIBC

Average C$ Sensitivity

0.0 0.5 1.0 1.5 Leat her/ Allied Prod. Misc.

Bev. & Tobacco

Chemical Elect Eq/ Appliance Furniture Printing & S upport Paper Food Plastics/ Rubber Nonmetallic Mineral Wood ALL Fabricated Metal Textile Prod. Machinery Textile Mills

Transport. Eq.

Petroleum/ Coal Computer/ Electronic Primary Metal Clot hing 36.6 48.6

Share of Services

CONFIDENTIAL

urce: S

t at ist ics Canada, CIBC

10 20 30 40 50 60 70 80 90 in Employment in GDP in Exports

SLIDE 4

11/27/2015 4

Share of Services Exports in Gross Exports

CONFIDENTIAL

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 2000 2005 2008 2009 2010 2011 Direct Service Exports (StatCan) Value Added S ervice Exports (OECD)

urce: S

t at ist ics Canada, Conference Board of Canada, OECD(TIVA), CIBC

Value-Added Services in Gross Exports (TPP Members)

CONFIDENTIAL

urce: OECD(TIVA), CIBC

0% 20% 40% 60% 80% Brunei Chile Vietnam Mexico Malaysia Canada Australia Japan U.S. New Zealand Singapore Year: 2011

SLIDE 5

11/27/2015 5

CONFIDENTIAL

8 -
Perception
Data
Sub-prime/Alt A
Overbuilding
Interest Rate Sensitivity
Fraud

Cumulative Increase in House Prices by House Value

CONFIDENTIAL

urce: Brookfield, CIBC

60% 65% 70% 75% 80% 85% 90% 95% 0.51.52.53.54.55.56.57.58.59.5 S emi Decile Toronto (Detached, past decade)

less expensive more expensive

0% 50% 100% 150% 200% 250% 0.51.52.53.54.55.56.57.58.59.5 S emi Decile Vancouver (Detached, past decade)

less expensive more expensive

foreign investment?

SLIDE 6

11/27/2015 6

Ratio of Housing Starts to Household Formation

CONFIDENTIAL

10 -

urce: S

t at ist ics Canada, Conference Board, US Census Bureau, CIBC

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 CAN: Avg last 10 yrs US : Avg 10 yrs leading to the recession

Completed and Unabsorbed Apartments

CONFIDENTIAL

11 -

urce: CMHC, CIBC

500 1000 1500 2000 2500 3000 92 94 96 98 00 02 04 06 08 10 12 14

GTA

units

SLIDE 7

11/27/2015 7

Standing Inventory

CONFIDENTIAL

12 -

urce: RealNet , CIBC

500 1,000 1,500 2,000 2,500 Jan-05 Sep-05 May-06 Jan-07 Sep-07 May-08 Jan-09 Sep-09 May-10 Jan-11 Sep-11 May-12 Jan-13 Sep-13 May-14 Jan-15

Completed and Unabsorbed Apartments by Developers – An Uneven Distribution

CONFIDENTIAL

13 -

urce: RealNet , CIBC

50 100 150 200 250 300 Unsold units by Developers 31.9% 68.1% 4 Developers

Rest

SLIDE 8

11/27/2015 8

Private Lending Mortgage Originations as a Share of Total Originations (Ontario)

CONFIDENTIAL

14 -

urce: Teranet , CIBC

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 Based on number of mortgages Based on dollar outstanding %