UBS is cutting way back on investment banking:
UBS AG (UBSN), Switzerland’s largest bank, will cut as many as 10,000 jobs companywide as the trading business shrinks, a person with knowledge of the plan said.
The bank had about 63,250 employees as of June 30, according to its most recent financial report, which means the staff cut could equal 16 percent. UBS already announced it is reducing risk-weighted assets at the investment bank by more than half from September 2011 levels, mostly in fixed income.
The plan will lead to a further reduction of as much as 100 billion Swiss francs ($107 billion) of risk-weighted assets, the person said. Much of the fixed-income operations will be put in a new unit that will hold non-core assets, and [investment-bank co-head Carsten] Kengeter will probably give up his current role to head the new unit, the person said.
There are threats of turmoil in Italy:
Former Italian prime minister Silvio Berlusconi said his party, the biggest in parliament, may end support for Premier Mario Monti’s government because its policies are deepening the country’s recession.
The People of Liberty party needs to consider that “with a no-confidence vote by us, we would determine a situation that would be interpreted in a certain way by the financial markets and would cause early elections,” Berlusconi, 76, told reporters yesterday near Milan. “We will consider these facts and decide whether to immediately withdraw our support of the government.”
…
“It’s impossible to say what is in Berlusconi’s head now, but if he decides to end his support to Monti, early elections become almost inevitable,” said Roberto D’Alimonte, a professor of politics at Rome’s LUISS University. “Berlusconi would lose the elections anyway, but would likely get more votes thanks to an anti-austerity platform and that would increase his party’s bargaining power in the next parliament.”
…
Monti is still implementing some of the steps aimed at containing debt and keeping the deficit under 3 percent of gross domestic product this year. Industrial output unexpectedly rose in August, signalling the recession may be easing and consumer confidence gained this month as the government announced tax cuts for the lowest earners to offset the effect of an increase on the value-added levy in 2012.
Government micro-management of the mortgage market is getting popular:
The monetary policy committee, led by Governor Stanley Fischer, cut the rate by a quarter-point to 2 percent, the Jerusalem-based bank said on its website today. None of the 24 economists surveyed by Bloomberg predicted the decision.
…
The Bank of Israel also released, together with the rate decision, new draft directives aimed at cooling the mortgage market, which are expected to go into effect on Nov. 1. The directives limit mortgages to 70 percent of the value of the home, with the exception of new home buyers, who will be permitted to borrow up to 75 percent.
I will admit that I was inclined to be rather contemptuous of today’s shut-down of the NYSE – until I saw this picture from Manhattan:
Click for Big
This has had an effect on power supply:
Con Edison shut down power to parts of downtown Manhattan, including Wall Street and the nation’s financial nerve center, as the storm surge, boosted by high tide, sent saltwater pouring into its underground power network.
…
About 250,000 customers in Manhattan were without power as of 9 p.m. on Oct. 29 local time after flooding in substations caused outages from the lower tip of the island to East 39th Street, the utility said in a statement. It may need to cut power in additional areas of downtown, as well as in parts of Brooklyn, Queens and the Bronx due to record tides and surge from Sandy,the utility said in a separate statement last night.
It was a day of very little price movement for the Canadian preferred share market, with PerpetualPremiums gaining 1bp, FixedResets down 3bp and DeemedRetractibles off 1bp. There was no volatility of note. Volume was low.
| 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 | -0.0400 % | 2,467.7 |
| FixedFloater | 4.19 % | 3.52 % | 36,308 | 18.31 | 1 | -0.2198 % | 3,844.9 |
| Floater | 2.80 % | 3.00 % | 57,035 | 19.72 | 4 | -0.0400 % | 2,664.5 |
| OpRet | 4.61 % | 0.53 % | 42,088 | 0.63 | 4 | 0.5252 % | 2,578.6 |
| SplitShare | 5.39 % | 4.81 % | 67,019 | 4.48 | 3 | 0.1050 % | 2,844.7 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.5252 % | 2,357.9 |
| Perpetual-Premium | 5.28 % | 1.32 % | 80,536 | 0.22 | 27 | 0.0086 % | 2,310.1 |
| Perpetual-Discount | 5.02 % | 4.93 % | 42,252 | 15.45 | 4 | -0.1128 % | 2,579.2 |
| FixedReset | 4.97 % | 3.04 % | 210,548 | 3.95 | 73 | -0.0265 % | 2,445.5 |
| Deemed-Retractible | 4.95 % | 3.58 % | 131,392 | 2.02 | 47 | -0.0067 % | 2,381.8 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| No individual gains or losses exceeding 1%! | |||
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| TD.PR.O | Deemed-Retractible | 63,190 | TD bought 19,400 from CIBC at 25.41. Nesbitt crossed 25,000 at the same price. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-10-31 Maturity Price : 25.00 Evaluated at bid price : 25.46 Bid-YTW : 3.90 % |
| TD.PR.G | FixedReset | 61,641 | National crossed 50,000 at 26.59. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-30 Maturity Price : 25.00 Evaluated at bid price : 26.60 Bid-YTW : 1.88 % |
| MFC.PR.F | FixedReset | 60,163 | RBC crossed 46,300 at 24.00. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.91 Bid-YTW : 4.00 % |
| BNS.PR.R | FixedReset | 54,042 | RBC crossed 50,000 at 25.54. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.53 Bid-YTW : 3.22 % |
| MFC.PR.H | FixedReset | 52,508 | RBC crossed 49,900 at 26.00. YTW SCENARIO Maturity Type : Call Maturity Date : 2017-03-19 Maturity Price : 25.00 Evaluated at bid price : 26.00 Bid-YTW : 3.75 % |
| FTS.PR.H | FixedReset | 50,350 | RBC crossed 50,000 at 25.60. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-10-29 Maturity Price : 23.64 Evaluated at bid price : 25.55 Bid-YTW : 2.77 % |
| There were 20 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| IAG.PR.A | Deemed-Retractible | Quote: 24.25 – 25.00 Spot Rate : 0.7500 Average : 0.4319 YTW SCENARIO |
| IAG.PR.E | Deemed-Retractible | Quote: 26.37 – 26.86 Spot Rate : 0.4900 Average : 0.2716 YTW SCENARIO |
| CM.PR.E | Perpetual-Premium | Quote: 25.44 – 25.72 Spot Rate : 0.2800 Average : 0.1706 YTW SCENARIO |
| MFC.PR.A | OpRet | Quote: 25.76 – 26.13 Spot Rate : 0.3700 Average : 0.2616 YTW SCENARIO |
| POW.PR.C | Perpetual-Premium | Quote: 25.41 – 25.68 Spot Rate : 0.2700 Average : 0.1784 YTW SCENARIO |
| HSB.PR.E | FixedReset | Quote: 26.74 – 26.95 Spot Rate : 0.2100 Average : 0.1405 YTW SCENARIO |