Posts Tagged ‘benjamin tal’
What Double Dip Recession?
As a follow up to my previous post on my take-aways from CIBC economist Benjamin Tal's state of the economy speech a couple of weeks ago I am going to talk about the overall economy and what we have in store. Is there going to be a "Double Dip" Recession??? The short answer is no. None of the economic indicators point toward a double dip recession. The Canadian economy is actually growing ....albeit slightly at 1% a year. The US economy has started to slide since Obama's stimulus program came to an end last summer. In the past a recession was always preceded by short term interest rates increasing above long term rates. Again, that is not currently the case. We currently have short term rates below longer term interest rates. ....but what about employment? Well in Canada we have seen ...
Benjamin Tal Economic Outlook – Pt. 1
I had the pleasure of attending a discussion held by Benjamin Tal last week where he discussed his views on the North American economy and the impact it is going to have on our housing and mortgage markets. There are some significant differences between the economies in Canada and the US......some are surprising and some are expected. There is no shortage of news and commentary in the media these days, but Mr Tal does a good job of interpreting the data and telling you how it will affect your world. My next few posts will be spent analyzing Mr Tal's thoughts and providing some commentary on the future of our housing and mortgage markets. The first thing we need to understand is the amount of debt Canadians and Americans carry. Surprisingly (atleast I found it surprising) American's are experiencing their highest saving rate in 20 years. The amount of debt compared to income is actually falling for the first time in history. Canadians will actually have a higher debt to income ratio than the US within 6 months. Obviously the economic events of ...
Ottawa Considers Tighter Mortgage Regulations
It appears the powers that be in Ottawa read the newspaper. The media has been reporting for the last couple of months that Canada is in the midst of a real estate bubble and after what happened in the US, "Real Estate Bubble" is now a dirty word. Of course if you listen to the experts such as CIBC's Benjamin Tal you will get a more realistic view of what is actually happening. In short the Government's stimulus package is actually working. The lower interest rates we have been enjoying have increased home sales in Canada and in turn help boost the economy. Well, the Conservative Government is now worried that Canadians are piling on too much debt while interest rates are low and will ultimately get into trouble when interest rates increase. Is their fear valid? Maybe, but I personally find most of my clients ar not stretching themselves thin and are keeping a healthy cushion to allow for an increase in rates. The Finance Minister said in an interview with CTV that they are considering increasing the minimum downpayment from 5% to something greater....maybe 10%. As well they would get rid of 35 year mortgages. CIBC's Chief Economist Benjamin Tal ...
8 Economic Insights from Benjamin Tal
CIBC's chief economist, Benjamin Tal spoke at a Mortgage industry event last week. He is always an interesting speaker and provides insight on not only the Canadian economy, but how the ripple effect of world economies will impact us. I have summarized Benjamin's key points below. The recession is over, but we will pay for what the US Fed is doing. Interest rates will rise and deficits will drag on Canada's economy The next wave of US mortgage resets will peak in 2011, but fortunately these mortgages mostly sit on lender's balance sheets and have not been securitized. This will help limit the global impact. We will see consumers spend and borrow less over the next five years. Part of this is due to fear and part is due to lending criteria becoming more strict The bank of Canada will have no choice, but to wait for the US to start raising their interest rates. If Canada were to increase rates earlier it would cause our dollar to appreciate and put our already fragile recovery in jeopardy We do not have the evidence to support we are in a housing bubble. The fact that people are taking advantage of low interest rates shows the government's ...
Benjamin Tal Economic Outlook
I was lucky enough to be able to attend a talk held by Benjamin Tal, CIBC's head economist. As would be expected from an economist his talk was laced with statistics, bar graphs and acronyms. Unlike most economists he is actually quite interesting to listen. He was able to get the audience laughing at several points during the presentation and the hour flew by. I have taken a few of the more relevant points he made and listed them below. If you are interested in reading more about Benjamin Tal feel free to Google him and you will find countless articles that he is quoted in. The first point he made was he expected the Canadian Real Estate market to continue to decline for 5-7 more months and possible fall another 7 to 10% in value. Of course this is an average and will not hold true across all markets. Of course no one has a crystal ball, but it is encouraging to hear an "expert" discuss the light at the end of the tunnel and be reassured that we are not going to be in a free fall for the next 2 years. At the end of the discussion one of ...
