ICCC and CIBC leadership with Benjamin Tal

Benjamin Tal, Deputy Chief Economist at CIBC World Markets held an audience of over 350 enthralled and riveted for over 90 minutes discussing the future of the world economy and its impact on investment decisions. His presentation – Navigating through the clouds – was jointly organized by the Indo-Canada Chamber of Commerce (ICCC) and the CIBC at the Mississauga Convention Centre Thursday May 19. The program got an unprecedented and overwhelming response.

Tal is responsible for analyzing economic developments and their implications for North American fixed income, equity, foreign exchange and commodities markets. He also acts in an advisory capacity to bank officers on issues related to wealth management, household/corporate credit and risk.

Benjamin Tal, a veteran observer of the global economy, began his presentation by stating that the new normal globally is a recessionary trend. Citing the example of Japanese economy that has not registered any significant growth, Tal observed that globally all major economies are becoming like the Japanese economy.

He said the global economic cycles are going to be shorter and the peaks are not going to be as high as before. In the enveloping scenario, it is the market that is leading the US Federal Reserve, rather than the other way round. The US Federal Reserve is inarguably the most important economic regulator, and it is not in a position through its monetary policy to fix the situation.

Tal explained – in great details – the impact of low oil prices, the recession in China, the collapse and marginal revival of the Eurozone, the revival of the US economy, and the unsettling rise in the real estate market in Vancouver and Toronto.

Well-known for his ground-breaking published research on topics such as labour market dynamics, real estate, credit markets, international trade and business economic conditions, Mr. Tal not only contributes to the conversation but also frequently sets the agenda.

He has close to 20 years of experience in the private sector advising clients, industry leaders, corporate boards, trade associations and governments on economic and financial issues.

On oil prices, the celebrity economist explained lower oil prices would benefit the consuming economies, and the impact of that benefit would be evident in 2017. About China, Tal said that its recessionary trend is a cause of major disquiet among the OECD economies, and it will have a severely adverse impact on major economies. About the Eurozone, Tal noted that the condition is much better than what it was earlier, although it is not completely out of the woods, considering that the banks that lend money to the government are being bailed out by the government.

The strong revival of the US economy is the most exciting development in the global economic situation because the rise in manufacturing in the US will lead to more spending domestically. The US Federal Reserve is unlikely to raise the interest rates in any significant manner because that would likely impair growth.

About the Canadian economy, Tal observed that over the last several years the sole purpose of policy moulders and decision-makers has been to keep the value of dollar deflated to keep it economical. This has certainly helped keep the economy competitive, but there are other systemic issues that are hampering desirable growth.

Canadian economy is showing the rare malaise of record levels of debt and record levels of cash. Speaking on the continuously rising real estate prices in Vancouver and Toronto, Tal said that he did not share the view that the real estate price situation in Canada was similar to the subprime crisis that brought down the US economy in 2008. He also said that the rise in condo construction had brought affordability to the market; and the rising prices, especially in Vancouver, could not solely be attributed to foreign investors because many investors had presence in both Canada and China.

In conclusion he said that interest rates would not be rising significantly in the near term, and that for the next six months the market would be volatile. In the near term, investors should focus on investing in high quality equity. And, considering that 2017 is going to be economically better globally, investors should invest in high value stocks in and after 2017.                      

National and global media regularly seek him out for his insight and analysis on economic issues that impact financial markets, consumers, corporations and public policy. He is also a frequent lecturer in the economic programs of various Canadian universities.

Mr. Tal is a member of the Economic Committee of The Canadian Chamber of Commerce, The Economic Development Committee of the Toronto Board of Trade. He is also a member of board of Governors of Junior Achievement of Central Ontario, and a board member of the Toronto Financial Services Alliance.The enthusiastic response the presentation received from CIBC patrons and ICCC members was a clear indication that entrepreneurs and professionals are keen to understand broad economic trends to safeguard their interests and benefit, to the extent possible, from the changing economic scenario.

Earlier, speaking on the occasion, Sanjay Makkar, President, ICCC, emphasized that Benjamin Tal is well known for his nuanced and often contrarian views on the global economy that had proved to be prescient subsequently even though initially they had seemed uncommon.                       

Venki Raman, District Vice President, CIBC; Jonathan Dent, Regional Head and Senior Vice President at CIBC; and Jagdish Bajaj, Vice President, ICCC, were among the other speakers.