There is some long overdue musing that CMHC might be privatized:
Ottawa has made a series of quiet changes to bolster the oversight of CMHC in recent years: adding to its board of directors the deputy minister of finance and the deputy minister of human resources and skills development, as well as putting the Crown corporation under the official eye of the country’s banking regulator.
“This is all about financial stability, because [CMHC is] a very important part of the market and of the financial stability picture in Canada, and it’s kind of been off on its own track,” Mr. Flaherty said.
Ultimately, he would like to see the government get out of the mortgage insurance business. “The history of CMHC has to do with providing adequate housing for veterans after the Second World War, and it’s become something rather grander,” he said.
“I think in the next five or ten years the government needs to look at getting out of some businesses that we’re in that we don’t need to be in.”
There’s a good opportunity for hedge funds and brokers:
The Volcker rule could cut profit at the biggest U.S. banks twice as much as earlier estimates if regulators take a strict stance on limiting proprietary trading, Standard & Poor’s said.
“We currently estimate that the Volcker rule could reduce combined pretax earnings for the eight largest U.S. banks by up to $10 billion annually, up from our initial $4 billion estimate two years ago,” S&P said today in a statement announcing a new report on the issue.
…
“The implementation of the Volcker rule could have favorable implications for the credit profiles of some of the largest U.S. banks, such as reducing trading portfolio risk,” S&P said. “This risk mitigation could lessen revenue and earnings volatility, which we would view favorably.”
What-Debt?’s seeming intention to fight the next election on muscleheaded nationalism is causing some concern:
The federal government’s surprise move to block the $6-billion takeover of Progress Energy Resources Corp. is adding to growing concerns about a “Canadian discount” that weighs on share prices and frustrates companies’ ability to raise capital and do deals.
Investors reacted swiftly on Monday to the rejection of the bid for Progress by Malaysia’s Petronas . Progress shares dropped more than 9 per cent, while other energy shares sank sharply.
The government’s decision immediately reminded investors of previous high-profile deals in Canada that fell apart amid government or regulatory scrutiny, and has created uncertainty about the bid for Calgary’s Nexen Inc. by China’s CNOOC Ltd. The Conservative government created waves two years ago when it blocked BHP Billiton’s $38.6-billion (U.S.) attempt to acquire Potash Corp. of Saskatchewan. And just last week, the federal telecommunications regulator rejected BCE Inc.’s bid to acquire Astral Media Inc. in a shocking decision.
There are rumours that the oligarchy will extend its control over the Canadian economy:
Royal Bank of Canada is on the verge of buying Ally Financial’s Canadian arm.
The sale is part of a global restructuring that Ally first announced in May. Early in the auction process General Motors Co. described itself as the “natural buyer”, as Ally was previously owned by GM and was once known as General Motors Acceptance Corp.
However, GM said it would only go so far to bring the assets back under its belt, and despite its attempts, RBC is now the lead bidder, according to someone familiar with the auction. Talks are now in advanced stages.
There are also opportunities for private equity:
KKR & Co. (KKR), TPG Capital and Goldman Sachs Capital Partners (GS), which took the former TXU Corp. private five years ago in the largest leveraged buyout in history, have paid themselves $528.3 million in fees, even as the electricity provider teeters toward a near-term bankruptcy or restructuring.
The payments consist of a $300 million charge for advising on the buyout, annual management fees totaling $171 million and as much as $57.3 million for consulting on debt deals, the Dallas-based company now called Energy Future Holdings Corp. said in regulatory filings. The private-equity firms’ fees are as much as 25 times greater than average, based on data from law firm Dechert LLP and researcher Preqin Ltd.
…
The fees from Energy Future may allow KKR, TPG and Goldman Sachs to extract cash without infringing on the Delaware Limited Liability Company Act, which limits distributions from a firm if all its liabilities exceed the fair value of its assets, according to Chapter 18 of the law.
The Globe and Mail’s education series has climbed on the most asinine bandwagon
yet – molly-coddling university students:
For Grade 12 students preparing university or college applications, getting into the right school is the only goal. Few 17-year-olds have thought much about how they will manage the demands of postsecondary courses, or about dropout rates that show one in seven students won’t finish their studies.
But what if schools could pinpoint which students were most likely to run into trouble and offer them extra support before their experiences turned sour?
At the University of Ottawa, researcher Ross Finnie has been experimenting with a custom-tailored, low-cost statistical model that can identify the students most likely to abandon their studies and offer them help as soon as possible.
As a once and future employer, I don’t want to hire little babies who need help and support. This is the real world. I want graduates who have prospered in an environment where nobody is getting paid to be nice to them.
It was a good day for the Canadian preferred share market, with PerpetualPremiums gaining 10bp, FixedResets winning 16bp and DeemedRetractibles up 13bp. Volatility was minor. Volume was very heavy.
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
|||||||
| Index | Mean Current Yield (at bid) |
Median YTW |
Median Average Trading Value |
Median Mod Dur (YTW) |
Issues | Day’s Perf. | Index Value |
| Ratchet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1320 % | 2,471.9 |
| FixedFloater | 4.15 % | 3.48 % | 35,414 | 18.38 | 1 | 2.0527 % | 3,873.7 |
| Floater | 2.97 % | 2.99 % | 67,089 | 19.76 | 3 | 0.1320 % | 2,669.0 |
| OpRet | 4.61 % | 2.44 % | 56,832 | 0.65 | 4 | 0.3146 % | 2,577.3 |
| SplitShare | 5.39 % | 4.72 % | 68,511 | 4.49 | 3 | -0.0655 % | 2,844.4 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.3146 % | 2,356.7 |
| Perpetual-Premium | 5.28 % | 0.40 % | 83,906 | 0.24 | 27 | 0.1041 % | 2,309.0 |
| Perpetual-Discount | 5.01 % | 4.89 % | 43,615 | 15.47 | 4 | 0.1027 % | 2,580.6 |
| FixedReset | 4.97 % | 3.01 % | 197,172 | 3.82 | 73 | 0.1583 % | 2,445.2 |
| Deemed-Retractible | 4.93 % | 3.43 % | 132,094 | 1.15 | 47 | 0.1305 % | 2,383.8 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| BAM.PR.G | FixedFloater | 2.05 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-10-22 Maturity Price : 23.19 Evaluated at bid price : 22.87 Bid-YTW : 3.48 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| GWO.PR.G | Deemed-Retractible | 214,848 | Deleted from TXPR. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-12-31 Maturity Price : 25.00 Evaluated at bid price : 25.26 Bid-YTW : 4.60 % |
| FTS.PR.H | FixedReset | 156,108 | Added to TXPR. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-10-22 Maturity Price : 23.65 Evaluated at bid price : 25.62 Bid-YTW : 2.76 % |
| CM.PR.P | Deemed-Retractible | 152,245 | Called for redemption. YTW SCENARIO Maturity Type : Call Maturity Date : 2012-11-28 Maturity Price : 25.00 Evaluated at bid price : 24.99 Bid-YTW : 4.75 % |
| MFC.PR.D | FixedReset | 117,878 | RBC crossed 113,100 at 26.95. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-06-19 Maturity Price : 25.00 Evaluated at bid price : 26.89 Bid-YTW : 2.33 % |
| CU.PR.C | FixedReset | 116,089 | National crossed 100,000 at 26.10. YTW SCENARIO Maturity Type : Call Maturity Date : 2017-06-01 Maturity Price : 25.00 Evaluated at bid price : 26.00 Bid-YTW : 3.21 % |
| RY.PR.D | Deemed-Retractible | 111,343 | Deleted from TXPR. YTW SCENARIO Maturity Type : Call Maturity Date : 2016-02-24 Maturity Price : 25.00 Evaluated at bid price : 25.92 Bid-YTW : 3.57 % |
| There were 54 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| MFC.PR.H | FixedReset | Quote: 26.00 – 26.49 Spot Rate : 0.4900 Average : 0.3114 YTW SCENARIO |
| BAM.PR.J | OpRet | Quote: 26.77 – 27.18 Spot Rate : 0.4100 Average : 0.2984 YTW SCENARIO |
| HSB.PR.D | Deemed-Retractible | Quote: 25.42 – 25.69 Spot Rate : 0.2700 Average : 0.1628 YTW SCENARIO |
| HSE.PR.A | FixedReset | Quote: 25.89 – 26.16 Spot Rate : 0.2700 Average : 0.1713 YTW SCENARIO |
| PWF.PR.F | Perpetual-Premium | Quote: 25.19 – 25.46 Spot Rate : 0.2700 Average : 0.1824 YTW SCENARIO |
| GWO.PR.L | Deemed-Retractible | Quote: 26.35 – 26.69 Spot Rate : 0.3400 Average : 0.2645 YTW SCENARIO |