Title: GAME PLAN 2006
1GAME PLAN2006 2007
Benjamin Tal, Senior EconomistEconomics
StrategyJune 2006
2Monetary Policy 101
Chairman, US Federal Reserves
May 2000
3Canadian Winters Are Getting Warmer
4Housing Starts in a Past Warm Winter(The 1987
Example)
Source CMHC, CIBCWM
5Sea Temperature Anomalies Indicate Severe 2006
Hurricane Season
6Hurricane Season Severity Rising with Sea
Temperatures
7Insurance Industrys Capacity To
AbsorbWeather-Related Cost Is Declining
8Energy Debt Service A Record Income Bite
9The US Housing Market Is Slowing
10The UK Experience
11The concepts of output gaps for economists or
capacity constraints ... are rendered nonexistent
.... The concepts that we have for so long used
to determine the course of monetary policy are
being challenged by globalization. Richard
Fisher, President, Federal Reserves Bank of
Dallas January 13, 2006
The Banks conventional measure of output gap
suggests that the economy is operating at its
production capacity. Bank of Canadas Monetary
Policy Report October 2005
12Lowering The Speed Limit
Speed Limit
New Speed Limit
13Yield Curve Near Inversion
14US Curve Inversions Led Recessions
?
15Bank of Canada Rate
16Energy Players To Outperform
17CIBCWM Metropolitan Economic Activity Index
(2006Q1)
18The Credit Cycle Is Turning
19The Mortgage Market
20Rising Interest in Interest-Only Mortgages(US)
21The Sub-Prime Mortgage Market(US)
22Banks Net Product MarginSub-Prime Market (US)
23Mortgage Arrears
24The Relationship Between Mortgage Rate Spread
and VRM Ratio
25Savings Variable vs. Fixed
26Average Mortgage vs. House Price
27The Rise of Personal Lines of Credit
28Lines of Credit Substituting For Direct Loans
29THE END