You can read all the gory details for yourself but here are the highlights from Don Drummond and the gang of economists at TD Bank:
- Over the next 12 months, home prices will have bottomed, the cost of funds to financial institutions will have fallen, the worst in institutional failures will be in the rear view mirror, and the process of recapitalizing the financial system will be well underway …
- …but don’t expect a return to the status quo.
- Relative to the past decade, the cost of financing will remain higher and less credit will be available.
- A convincing and sustainable recovery in consumption and investment won’t materialize in the U.S. until 2010.
- The world economy will be in a mild recession in 2009 before bouncing back in 2010.
The Canadian economy will resemble the American, moving sideways on output with only a shallow recovery in late 2009.