It has been the best of times and the worst of times. That was the main message coming from speakers at the 2012 CFA Society Toronto’s Annual Forecast Dinner, held in Toronto on 2 October. The theme of the discussion, “May We Live in Less Interesting Times,” was of course a spin on the well-known proverb often applied to tough times, which can produce both good and bad outcomes. Offering their prognostications for the year ahead were three speakers: Warren Jestin, Scotiabank’s Senior Vice-President and Chief Economist;  Paul Mortimer-Lee, Global Head of Market Economics at BNP Paribas; and Ezra Levant, TV news anchor, well-known conservative pundit, and best-selling author.

All agreed we have experienced a lot of the bad side of events, with turbulence in global markets, politics, and the world economy. That has made for an especially troubling investment environment over both the long and short term, where market and economic turmoil continue to be the order of the day. So where do speakers believe the global economy is headed in the year ahead?

Warren Jestin started the evening with his prognosis that economic growth will be tepid and uneven, with the global investment environment dominated by political risk. The world economy is undergoing fundamental changes, noted Jestin, drawing on his years of experience and financial market expertise. He identified political risks everywhere and highlighted problems in the U.S. as long-term issues that the upcoming election will not solve. He was especially pessimistic about events in Europe.

At the same time, emerging markets will experience less robust growth but will still continue as a driver of global growth. Here at home, Jestin asserted his view that Canada will grow in the 2% to 2.5% range (similar to that of the U.S.). For investors, bonds are unattractive, with rising yields a key risk. “Investors will continue to invest in safety, security and liquidity…,” Jestin concluded.

Paul Mortimer-lee also focused on political risk in markets, particularly in Europe. His perception of global markets was marked by both humour and insight as he highlighted the deep cultural differences between countries in Europe and discussed how cultural and behavioural biases are not commonly considered when discussing the European crisis. He made a strong case for the European Economic Community and the euro and expressed his confidence that Europe will ultimately muddle through. He did think Canada risked having too soft a monetary policy for too long as a result of problems in the rest of the world. It was a significant longer-term risk that supported a more cautious regulatory stance in Canadian credit markets.

Delivering the final forecast of the night, Ezra levant both entertained and enlightened, focusing on the Canadian oil sands and the U.S. elections (which he believes will be won by the republicans). Levant made  a compelling argument for the oil sands and also joked that the world’s energy issues won’t be solved by Star Trek’s mythical “Dilithium Crystals” or Avatar’s “Unobtanium.” Instead, he promoted development based on the values of environmental responsibility, peace, the ethical treatment of workers, and the promotion of human rights. Through his persuasive and cogent arguments, he dispelled many of the myths, hype, and biases surrounding oil sands development.

Ezra’s talk was a wonderful way to end the speeches and a terrific segue to the dessert reception. Everyone had fun, guests were entertained, and all came away better educated and better equipped to face the future. We hope to see you next year at the 2013 Forecast Dinner.