A few glimmers of hope are sparking on the horizon. Ford Motor Company actually showed a profit last quarter. Small business failure rates are beginning to lessen, here and abroad. Bank loans to large companies and the GDP are up.

At the same time, third quarter 2009 shows foreclosures climbing five percent (23 percent over a year ago). That’s a record of one foreclosure per every 136 American houses. And October 21 witnessed the country’s 101st bank closing.

While we are not still stalled in the gloom of 2008, recovery remains definitely a ways off. Exactly how long and what shape the upturn will take is the subject of the Mercer County Regional Chamber of Commerce’s luncheon on Thursday, November 12, at 11:30 a.m. at the Rose Garden in Trenton. Craig Alexander, deputy chief economist for TD Bank, will discuss “Prognostications for the Economy’s Future, 2010 and Beyond.” Cost: $60. Visit www.mercerchamber.org.

From his base in Toronto, Canada, Alexander has witnessed and accurately measured our continental and global economy’s undulations for the past two decades. He gained his math and statistical skills from his electrical engineer father who to this day claims not to understand his son’s somewhat airy profession.

Seeking education near his hometown, Alexander attended the University of Western Ontario, earning his bachelor’s in 1991, followed by his master’s in business statistics from the University of Toronto.

Following a few short jobs, Alexander undertook the construction of the platform and compiling the figures of Canada’s national statistics data, in use to this day. He then joined TD Bank at its Toronto headquarters where for three years he developed its international economic strategy.

Alexander then joined a brokerage firm, which introduced him to the other side of the commercial table. Alexander returned to TD as deputy chief economist, where he works to develop North American and U.S. macro-economic models that guide decision makers at all levels.

“Overall, the national governments have taken the right action to bootstrap us out of this recession,” says Alexander. “Using the limited tools they did have available, and the hindsight they did not, they have pumped money into the right places, and we can see some small signs already of its working.”

Recession recap. Alexander strenuously reminds American-centric audiences that this recession was not a harvest of solely American seeds. The markets of Japan, Argentina, and Europe did not tumble because an Iowa suburbanite could not pay his mortgage.

“It was the same process in every growing nation,” says Alexander. “Securitization of mortgages took home loans away from the hands, (and the due diligence) of bank lenders. In turn, lenders, dazzled by seemingly limitless sales, made credit too available, and risk was mispriced. It was a global phenomenon.” American homebuyers did, however, receive one over-the-edge nudge from a government that vigorously pushed single home ownership, seeing it as a sure route to economic growth.

The inherent recessional link of financial illiteracy, Alexander fears, is one aspect that is not being addressed. Too many homebuyers had no inkling of the connection between a four- percentage-point balloon in their mortgage, and their ability to meet monthly payments. Without some strong education, the bubble can grow again, with equal or worse results.

Recovery profiles. Today we are experiencing a two to three-percent growth in the North American economy. “Don’t be dismissive of this,” says Alexander. “Everyone is frustrated with the gradual progress, but if nine months ago we could have told people they would see this kind of growth — or any growth — they would have cheered.”

Economic optimists are presenting the popular “V” profile as a recovery model. A quick slide down by these basically healthy global economies will see an equally quick climb up, they predict. On the more pessimistic side, the “W” profile agrees with the quick recovery ascent, but since not enough improvement and control has come to our financial institutions, we are inevitably headed for a second dip.

“I think the chances of either of these models coming true is at best one in five,” states Alexander. “There just is not any kind of economic revolutionary recovery upthrust to miraculously sweep us back up on top.”

At the same time, governmental forces have stabilized currency and opened the lending pipelines again. When the credit baton is once more passed from government hands, back to the shaky grasp of banks, Alexander predicts a temporary wobble and perhaps a dip. But overall, look for a slow, steady curving arc back up toward economic health in the U.S. and globally.

People leading pols. “There is going to have to be some very smart rebalancing of financing, and rebalancing of monetary policies,” says Alexander. The major challenge will come in bringing lending rates off the basement floor. Interest rates must rise, to a more resilient, economically effective four percent by 2011.

“This raise is tricky for the Fed,” admits Alexander. Bring rates up too fast, and buying will slow, and the economy will stumble. Raise them too slowly and inflation is inevitable.

Meanwhile the United States faces a situation similar to Canada’s in the mid 1990s, when the national debt rose to nearly equal its GDP. Canada’s entire production power was not raising her beyond her debt. Throughout the northern provinces then, as throughout the states now, has come the call for fiscal conservatism.

The trouble is, elected legislators fear cutting sacred projects that will lose them supporters. “Politicians are basically followers,” says Alexander. “If the people can show that they accept necessary belt tightening, the politicians will make financially healthy decisions.”

Since most voters are historically more than willing to cut only other peoples’ services, while saving their own, Alexander’s call for individual leadership might seem a bit idealistic. However, it is nice to hear at least one expert voice claiming that in the end the economy does belong to the people and they have the power to shape it, rather than be its victims.

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