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The Economic Outlook

The Economic Outlook. Alistair Bentley Economist October 2011. TWO SPEED GLOBAL GROWTH. GLOBAL FINANCIAL RISK ELEVATED. EUROPE IN FISCAL CRISIS. EMERGING MARKETS COOLING BUT REMAIN STRONG. A U.S. RECESSION UNLIKE ANY IN RECENT MEMORY. A BALANCE SHEET RECESSION & RECOVERY.

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The Economic Outlook

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  1. The Economic Outlook Alistair Bentley Economist October 2011

  2. TWO SPEED GLOBAL GROWTH

  3. GLOBAL FINANCIAL RISK ELEVATED

  4. EUROPE IN FISCAL CRISIS

  5. EMERGING MARKETS COOLING BUT REMAIN STRONG

  6. A U.S. RECESSION UNLIKE ANY IN RECENT MEMORY

  7. A BALANCE SHEET RECESSION & RECOVERY

  8. LOTS OF PENT UP DEMAND

  9. RECOVERY STILL VERY FRAGILE

  10. JOB GROWTH IS KEY…

  11. …BUT RUNNING UP AGAINST STRUCTURAL ISSUES

  12. ITS BEEN A TOUGH RIDE FOR SOUTH ATLANTIC JOB MARKET

  13. HOUSING MARKET REMAINS AMAJOR HEADWIND

  14. PRICE EXCESSES ARE BEING UNWOUND

  15. BUT THERE IS STILL TOO MUCH SUPPLY

  16. DELINQUENCIES RATES ARE FALLING

  17. MORE DELINQUENT MORTGAGES ARE BECOMING CURRENT

  18. MORTGAGE MODIFICATIONS OFTEN RE-DEFAULT

  19. FORECLOSURE COMPLETIONS RUNNING BEHIND STARTS

  20. SO, FORECLOSURES REMAIN ELEVATED

  21. RENTAL MARKET ABSORBING HOUSING DEMAND

  22. SOUTH CAROLINA HOME PRICES

  23. U.S. POLITICAL DIVISION INJECTS MORE UNCERTAINTY INTO OUTLOOK

  24. BIG CUTS AT STATE & LOCAL LEVEL

  25. MAJOR LONG-RUN FISCAL CHALLENGES

  26. THE FED’S DUAL MANDATE: LOW INFLATION VS FULL EMPLOYMENT

  27. SIZE AND MAKE UP OF FED’S BALANCE SHEET

  28. FEDERAL RESERVE ON HOLD UNTIL MID-2013, LONG-TERM YIELDS TO REMAIN LOW

  29. FINAL THOUGHTS • U.S. economy likely to struggle to break through to capacity absorbing growth. • Headwinds to economic growth include: housing, credit, structural unemployment, and government restraint. • As the headwinds ebb and flow, it will create volatility in economic performance. • The financial implications are continued low interest rates for the foreseeable future, and a relatively weak U.S. dollar.

  30. TD Economics www.td.com/economics This reportis provided by TD Economicsfor customers of TD Bank Group. It is for information purposes only and may not be appropriate for other purposes. The report does not provide material information about the business and affairs of TD Bank Group and the members of TD Economics are not spokespersons for TD Bank Group with respect to its business and affairs. The information contained in this report has been drawn from sources believed to be reliable, but is not guaranteed to be accurate or complete. The report contains economic analysis and views, including about future economic and financial markets performance. These are based on certain assumptions and other factors, and are subject to inherent risks and uncertainties. The actual outcome may be materially different. The Toronto-Dominion Bank and its affiliates and related entities that comprise TD Bank Group are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered.

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