Tortoise Race Benjamin Tal April 2012 2 0 1 1 GDP Grow th Show s - - PDF document

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Oct 16, 2023 287 likes •392 views

Tortoise Race Benjamin Tal April 2012 2 0 1 1 GDP Grow th Show s I m pact of Tightening 2011 GDP growth 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% EU Fiscal Tighteners* Other EU Nations * includes UK, Spain, Netherlands, Poland, Greece, Ireland,

SLIDE 1

April 2012 Benjamin Tal

Tortoise Race

2 0 1 1 GDP Grow th Show s I m pact of Tightening

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% EU Fiscal Tighteners* Other EU Nations 2011 GDP growth * includes UK, Spain, Netherlands, Poland, Greece, Ireland, Portugal, Slovakia, Bulgaria, and Malta, where 2011 fiscal drag is greater than 1% of GDP

Source: Eurostat, CIBC

SLIDE 2

On the Ground I ndicators Still Suggest “Soft Landing”

5 10 15 20 25 30 35 Jan- 07 Jul- 07 Jan- 08 Jul- 08 Jan- 09 Jul- 09 Jan- 10 Jul- 10 Jan- 11 Jul- 11 Jan- 12 Electricity Use (R ) Railway Freight Volum es (R ) y/ y % chg

BC Lum ber Exports to China

Source: BC Stats-Ministry of Labour, Citizens’ Services & Open Government, Statistics Canada

20 40 60 80 100 120 140 160 180 200 Jan-11 Apr-11 Jul-11 Oct-11 cubic m etres y/ y % chg 34- m onth low

SLIDE 3

Even a Soft Landing Could Jar Com m odity Markets

10 20 30 40 50 60 70 I ron Ore Copper Oil Coal 2000 2010 China's share of world dem and (% )

Deleveraging

Source: Federal Reserve Board, CIBC

60 70 80 90 100 110 120 130 140 88 90 92 94 96 98 00 02 04 06 08 10 % US Ho u se h o ld De b t Ou tsta n d in g to Disp o sa b le I n co m e Ra tio Getting closer… trendline

SLIDE 4

Credit Quality I m proving

Consum e r Loa n De linque ncy Ra te Ba ck to Nor m a l 1 2 3 4 5 6 07 08 09 10 11 % 605 606 607 608 609 610 611 612 613 614 615 07 08 09 10 11 Av e r a ge Cr e dit Scor e of Lowe st Scor e Qua r tile

Source: CIBC, Federal Reserve Board

US Manufacturing, Still Expanding

Source: Institute for Supply Managem ent, CIBC

30 35 40 45 50 55 60 65 70 07 08 09 10 11 12 Ex pansion Contr action

SLIDE 5

Our I ndicator of Corporate Strength Has Never Been Higher

Com posite I ndica tor of Cor por a te Ca na da 's* Str e ngth

0.0 0.5 1.0 1.5

90Q2 95Q2 00Q2 05Q2 10Q2 Com pone nts of Cor por a te Str e ngth I ndica tor Debt-to-Equity Ratio Cash to Credit Ratio Profit Margin Return on Equity Return on Capital Exports Diversification - Com m odities Exports Diversification - Countries Business Bankruptcy Rate Business Confidence

* non-financial corporate sector

Corporate Cash Piles Building

0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 90Q1 92Q3 95Q1 97Q3 00Q1 02Q3 05Q1 07Q3 10Q1 Corporate Cash Holdings as Proportion of Credit

SLIDE 6

CI BCW M Metropolitan Econom ic Activity I ndex

5 10 15 20 95Q1 99Q1 03Q1 07Q1 11Q1 Av er age of 25 CMAs Winnipeg

Population Grow th

2 0 1 1 Q1 - 2 0 1 2 Q1 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 Winnipeg C anada y / y % chg

SLIDE 7

Num ber of Households w ith Heavy Debt Load on the Rise

22 24 26 28 30 32 34 36 07 08 09 10 11

%

Heavy Borrow ers

% of Households w ith Debt 5 10 15 20 25 30 35 40 45 BC ALTA ONT Canada Winipeg MAN/ SASK ALTC QUE

% of Dollars 83.0 79.2 74.2 73.2 70.2 67.0 58.8 62.7

SLIDE 8

Heavy Borrow ers Accounted For All The I ncrease in Debt Since 2 0 0 7

He a v y Bo r r o w e r s' De b t Gr o w th Ra te ( 2 0 0 7 - 2 0 1 1 ) 5 10 15 20 25 Mor tgage Total Debt less Mortgage %

Heavy Borrowers are those with > = 1.6 debt to gross incom e ratio. Source: Canadian Financial Monitor, CIBC

Co n tr ib u tio n to Ch a n g e in T o ta l Ho u se h o ld De b t sin ce 2 0 0 7 101.4 %

1.4%

Heav y debt load Medium & Light debt Load |

Real Household Credit

0.0 2.0 4.0 6.0 8.0 10.0 12.0 92 94 96 98 00 02 04 06 08 10 y / y % chg Av g 4.3% Av g 7.8%

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SLIDE 9

I nflation-Adjusted Mortgage Outstanding

0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 90 93 96 99 02 05 08 11 y / y % chg