Tis the Season for predictions
Obviously the most common thing for people to do at this time of year is make New Years resolutions. However the other popular thing to do is to make predictions for the year ahead. Some economists have just done this recently, i will collect their thoughts and the most relevant ones here:
The general consensus is that the Canadian Dollar will remain around par all year. The Us economy will slow further, and the markets will be equally as disruptive as they were in the summer of 2007, although they definately agree that there seems to be a light at the end of the tunnel.
- Ernie Ankrim, chief investment strategist at Russell Investments, agrees that markets will be disruptive, but he seems to think this will subside in the second half of the year. Additionally he goes on to suggest that early 2008 will continue to have turmoil in the markets due to the sub-prime mess not finishing until mid year. He believes strongly though that again by the second half of the year more transparency will be the norm in the markets that will finally bring liquidity to the structured markets. this will be cause for much celebration in the markets. it will be our job to ensure if the liquidity returns to normal that we push the lenders to lower their psreads and bring lower costs to the consumer. More on that as the year develops.
- Ben Joyce, director portfolio Strategy, BMO Capital markets suggests that the continued uncertainty and difficulties of the fall-out from the sub -prime mess will not push the North American markets into a recession. As we have been saying Ben says that the problems in liquidity in the market are an issue of confidence, NOT a fundamental prelude to a bear market or a recession. Ben goes on to say that he expects the Bank of Canada to continue to cut rates throughout the year. This is good news of course.
