Economy’s running with a speed limiter: Economist

TORONTO — Hey, we’re just the messengers.

Eric Lascelles is an economist with TD Securities. His business card says “Chief Economist and Rates Strategist.”

He told the November lunch meeting of the Toronto Trucking Association that he really doesn’t expect the economy to return to something resembling normal until maybe 2012. A year later than the U.S.

And when he says back to normal in this case, he means “back to normal as conventionally defined, with appropriate levels of unemployment.”

“I don’t have a crystal ball,” he caveated, before adding “I will say it’s going to be a pretty rough ride over the next six months.”

His presentation was called “Uncertainty in Perspective” and in a very spirited presentation after the political sea change in the States, Lascelles said the GDP is currently growing at “stall speed’ and that “stagnation cannot be ruled out.”

Economists, he said, know that “economic recovery after financial crises tend to take twice as long.”

The good news – – and there was some — is that the banks will not repeat their credit craziness again.

And, he said “corporations are weirdly optimistic.”

Another good thing? Individuals aren’t carrying as much debt.

“Consumers spent too much before. Household deleveraging is already advanced.”

“It’s going to be a long ride,” he told the audience, “but at least we’re fixing some of the more serious problems.”

The list of roadblocks to recovery is long. Serious government debt, unprecedented political involvement and, he added, the fear of lawsuits. After the credit crises, banks and other financial institutions will be extremely litigation sensitive.

“Fear of lawsuits is putting a speed limiter on the recovery,” Lascelles said.

Look for a longer more in-depth analysis of his analysis in the next issue of Today’s Trucking.