How Scary Is It?By Avery Shenfeld, Chief Economist & Managing Director

November 2011

| 2

Canadian Growth ResumesAfter Disruptions in Autos and Energy

98

99

100

101

102

103

104

105

106

107

108

Jun-09 Oct-09 Feb-10 Jun-10 Oct-10 Feb-11 Jun-11

Canada US

Monthly GDP Index Nearly 3% Q3

| 3

Food Inflation Could Also Easein Lagged Response to Commodity Trend

50

7090

110

130

150170

190

210

05 06 07 08 09 10 11185

195

205

215

225

235

World Commodity Price Index: Food (L)US CPI: Food (R)

1982-84=1002005=100

Source: Bureau of Labour Statistics, Statistics Canada, CIBC

| 4

Europe’s Economies Look Recession Bound

25

30

35

40

45

50

55

60

65Ja

n-0

7

Jul-

07

Jan-0

8

Jul-

08

Jan-0

9

Jul-

09

Jan-1

0

Jul-

10

Jan-1

1

Jul-

11

ItalyFranceGermany

Expansion/Contraction Threshold

| 5

Bond Indigestion: From Moussaka to Lasagna

0

50

100

150

200

250

300

350

400

450

500

France Germany Spain UnitedKingdom

Exposure to Greece Exposure to Italy

foreign claims/exposures of reporting banks (US$, bns)

0

100

200

300

400

50010-year Italian bond spreads, bps

| 6

EFSF: Who Will Guarantee the Guarantors? (L)French Ratings Risk in Further Expansion (R)

27%

20%

23%30%

Italy, Spain

GermanyFrance

Rest of Europe

Share of EFSF € 780bn guarantee commitments

0

2

4

6

8

10

Fr EFSFGuarantee

Commitment

French Deficit(2012)

% of French GDPExpanded EFSF

Original EFSF

| 7

Eurozone Banks Cutting Back on LendingDue to Capital Shortages

0%

5%

10%

15%

Q4 2010 Q1 2011 Q2 2011 Q3 2011

net % of banks reporting increases in capital or liquidity positions as a contributor to net tightening of credit standards

| 8

Obama Seeks to Delay Fiscal Tightening

0

100

200

300

400

500

600

Prev. Stimulus American JobsAct

Other

Infrastructure

State and LocalTransfers

Employer PayrollTax C ut

Expensing ofInvestments

UnemploymentInsurancePayroll Tax Holidayfor Employees

US$, bns

1.8% of GDP

Expiring in 2012

3.5% of GDP*

*Of which 3% is for 2012

| 9

US Consumers: Where’s the Deleveraging?

6

8

10

12

14

16

18

Jan-07 Jan-10

US light vehicle sales (SAAR-mn units)

8-mon. high"Cash for Clunkers"

Sep-110

1

2

3

4

5

6

7

8

9

Jan-06 Jan-09

US personal savings rate (%)

Sep-11

| 10

Gasoline and Food Inflation Should Easein Response to Commodity Trend

50

70

90

110

130

150

170

190

210

05 06 07 08 09 10 11185

195

205

215

225

235

World Commodity Price Index: Food (L) US CPI: Food (R)

1982-84=1002005=100

Source: Bureau of Labour Statistics, Statistics Canada, CIBC

| 11

Slack Keeps Fed On Hold Through 2013;Fed Extending Term to Anchor Long Rates

-8

-6

-4

-2

0

2

4

6

-24 -18 -12 -6 0 6 12

Months from Employment Trough

1948 1953 1958 2007-

% decline in non-farm payrolls from peak

2008-11 recession /recovery

| 12

A Twist Not Worth Shouting About

28%*

Negative or near-negative equity

Positive Equity

0

100

200

300

400

500

600

Au

g-1

1

Au

g-0

9

Au

g-0

7

Au

g-0

5

Au

g-0

3

0

20

40

60

80

100

120

140

Mortgage Applications for Home Purchase (R)US Pending Home Sales (L)

indexes

| 13

Global Growth DisappointmentsA Challenge to Pace of Equities Rally

3.0

3.5

4.0

4.5

5.0

5.5

2010A 2011F 2012F

Actual/CIBC Forecast IMF Forecast (June '11)

World GDP, % chg (at purchasing power parity)

US 1.7China 9.3EZ 1.6Jpn -0.2

US 1.9*China 8.3EZ 0.4Jpn 2.5

Source: IMF, CIBC*Assumes US extends payroll tax cut and extended jobless benefits

| 14

Emerging Markets Now the Drivers For Commodities Rallies

0%

20%

40%

60%

Petr

ole

um

Refined

Copper

Coal

Pri

mary

Nic

kel

1990's

Today

BIC (Brazil, India, C hina) Share of Total C onsumption

Note: latest coal data as of 2009; petroleum data as of 2010; nickel and copper data as

of 2011 Q2, copper data excludes Brazil

Source: EIA, CRU, WBMS

| 15

Higher Prices Restrained Oil Demand

US Vehicles Miles Driven

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

Aug-10

Nov-10

Feb-11

May-11

Aug-11

y/y % chg

-20

0

20

40

60

80

100

120

140

Feb-2009

Oct-2009

Jun-2010

Feb-2011

China's Auto Sales

y/y % chg

| 16

The Continental Divide

Employment/Population Ratio

5556575859606162636465

01 03 05 07 09 11

Canada US

%

Output Gap

-10

-8

-6

-4

-2

0

2

4

01 03 05 07 09 11

Canada US

%

| 17

Canada Sees 2.1% Growth in 2012 But it Will Take Low Rates to Get There

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

Q1-07 Q1-08 Q1-09 Q1-10 Q1-11 Q1-120.0

1.0

2.0

3.0

4.0

5.0

Real GDP Growth (L) Overnight Interest Rate (R)

GDP growth (s.a.a.r.) %Forecast

| 18

Consumers Reduced Debt AppetiteSlows Retail Sales: Low Rates Needed for Longer

-6%

-2%

2%

6%

10%

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

-12%

-8%

-4%

0%

4%

8%

12%

16%

20%

Real Retail Consumption (L) Consumer Credit (R)

y/y chg y/y

| 19

Debt Service Costs Unthreatening If Overnight Rates Contained to 2% in 2013

5

6

7

8

9

10

11

Q4-89

Q4-91

Q4-93

Q4-95

Q4-97

Q4-99

Q4-01

Q4-03

Q4-05

Q4-07

Q4-09

Q4-11

Q4-13

% of personal disposable income

| 20

Outlook for Investment Spending Still Favourable

Source: Bank of Canada Business Outlook Survey

-40

-30

-20

-10

0

10

20

30

4098:Q

3

99:Q

2

00:Q

1

00:Q

4

01:Q

3

02:Q

2

03:Q

1

03:Q

4

04:Q

3

05:Q

2

06:Q

1

06:Q

4

07:Q

3

08:Q

2

09:Q

1

09:Q

4

10:Q

3

11:Q

2

Equipment Spending Plans, Balance of Opinion (%-pts)

| 21

Housing Easing But Not Crashing

190 191193

80

100

120

140

160

180

200

220

240

260

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

F20

12F

'000 units, SAAR

| 22

Commodities Drive C$; C$ Strengthens later in 2012, Also Helped by BoC Hikes

60

70

80

90

100

110

120

Apr-10 Aug-10 Dec-10 Apr-11 Aug-1192

96

100

104

108

Crude Oil (WTI) Canadian Dollar

US$/bbl US¢/C$

Arrows denote BoC rate hikes

| 23

Bond Yields Drift Higher; Remain Low By Historical Standards

1

2

3

4

5

6

Dec00 Dec04 Dec08 Dec12

Canada

US10-yr bond yields (%)

Forecast

| 24

Fiscal Credentials: Canada’s Earlier Hard Work Paid Dividends

128101

79 75 7255

35

0

50

100

150

200

250

JPN ITA FRA UK US GER CAN

Gross

Net

General Government Debt, % (2011)

0

25

50

75

100

125

150

175

1990 95 00 05 10 15

CAN US UK FRA GER JPN ITA

General Government Net Debt, % of GDPFcst

| 25

West is Best in 2012

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

BC Alta Sask Man Ont Qué NB NS PEI N&L

2011 2012

Real GDP Growth, Y/Y % Chg

| 26

Ontario’s Slower Path Back to Balance

-25

-20

-15

-10

-5

0

5

10

15

FY88 91 94 97 00 03 06 09 12 15

Ontario Sum of Remaining Provinces

$billionsForecasts

2013/14

Fiscal Year Years to Go

BC 2013/14 3Alta 2013/14 3Sask1 NA NAMan 2014/15 4Ont 2017/18 7Qué 2013/14 3NB 2014/15 4NS 2013/14 3PEI 2013/14 3N&L2 NA NAFederal 2014/15 4Based on 2010 Budgets1. General Revenue Fund in surplus2. Budget balanced in 2010/11

Return to Budget Balance

| 27

Demand for Liquidity Sees Non-Ontario Names Underperform on Relative Basis

-10

-5

0

5

10

15

20

25

30

35

Jul-07 Apr-08 Jan-09 Oct-09 Jul-10 Apr-11

British Columbia Québec Manitoba New Brunswick

30-Year N.I. Roll to Ontario, bps

| 28

TSX Forward PE Low by Historical Standards,Matching US

8

9

10

11

12

13

14

15

16

17

Jan-07 May-10

TSX Composite S&P 500

Valuation gap closed

| 29

Analysts However Cutting 2012 Earnings Expectations

0

1

2

3

4

5

6

7

8

9

Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11

last observation

Oct-11

2.1

Normal = 1.5:1

Ratio of Downgrades to Upgrades

| 30

Equity Markets to See Below-Consensus Earnings

Source: Thomson Reuters, CIBC

-40

-30

-20

-10

0

10

20

30

40

Dec-08

Apr-09

Aug-09

Dec-09

Apr-10

Aug-10

Dec-10

Apr-11

Aug-11

Predicted by CIBC Earnings Indicator Bottom up Consensus

TSX 12-mo fwd earnings, % chg from year ago

+13%

+17%

| 31

Quality Dividend Stocks Should Outperform

80

85

90

95

100

105

5-Apr 3-May 31-May 28-Jun 26-Jul 23-Aug 20-Sep 18-OctHigh Quality Dividend Stocks* TSX Composite

Total Return, April 5=100

*S&P/TSX Canadian Dividend Aristocrats

+

-11%

-1%