Bernanke gave himself a little pat on the back:
“The combination of financial healing, greater balance in the housing market, less fiscal restraint, and, of course, continued monetary policy accommodation bodes well for U.S. economic growth in coming quarters,” Bernanke said today in remarks prepared for a speech in Philadelphia. “Of course, if the experience of the past few years teaches us anything, it is that we should be cautious in our forecasts.”
…
He said the decision to taper bond purchases “did not indicate any diminution of its commitment to maintain a highly accommodative monetary policy for as long as needed.”Bernanke cited payroll employment rising by 7.5 million since 2010 and the economy growing in 16 of the 17 quarters after the recession ended as evidence the Fed’s policies, which also included providing more information on the likely future path of interest rates, have succeeded.
“The economy has made considerable progress since the recovery officially began some four and a half years ago,” the 60-year-old former Princeton University professor said to the annual meeting of the American Economic Association. His tenure ends Jan. 31.
“When the economy was in free fall in late 2008 and early 2009, such improvement was far from certain, as indicated at the time by stock prices that were nearly 60 percent below current levels and very wide credit spreads,” Bernanke said.
Could it be that even Spain and Italy are on the mend?
Spain’s government bonds advanced, pushing 10-year yields to the lowest since May 2010, as a report showing unemployment fell the most in six months in December added to signs the region’s economy is gaining momentum.
The extra yield investors demand to hold Spanish 10-year debt instead of similar-maturity German bonds shrank below 2 percentage points for the first time since May 2011. Spanish unemployment fell 107,570 last month, the biggest decline since June, the Ministry of Labor said. Italy’s bonds also rallied, with 10-year yields dropping to the lowest since May. Germany’s benchmark 10-year bund yield was about three basis points from the highest level since September.
But bank crises take a long time to heal:
It takes eight years on average for economies to regain the level of income lost in a banking crisis, and the U.S. and Germany are alone among 12 in having already done so since the 2008 turmoil, according to Harvard University professors Carmen Reinhart and Kenneth Rogoff.
Their study of 100 banking crises over two centuries, scheduled to be presented today at the conference of the American Economic Association in Philadelphia, found part of the costs of banking difficulties relate to how long it takes economies to recover.
Of the 12 economies examined since 2008, the per-capita gross domestic product of Greece, Italy, Netherlands, Portugal and Spain kept contracting through 2013, according to a draft of the paper. Other than the U.S. or Germany, the rest either didn’t grow or didn’t grow enough to attain their previous income peaks.
In 43 percent of the historical cases studied, economies double-dipped back into recession. The paper covered 63 crises in advanced economies and 37 in larger emerging markets.
The recent rally in the Canadian preferred share continued, with PerpetualDiscounts up 13bp, FixedResets gaining 12bp and DeemedRetractibles winning 30bp. The Performance Highlights table is heavily skewed towards winners, with insurance DeemedRetractibles notable among the winners. Volume picked up a little from its seasonal depths, but remains very low; but as a change of pace, two SplitShare issues made the list.
We can now look forward to next week: I’ll bet a dime that at least one new issue is announced, and a full nickel that there’s at least two.
| 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 | 0.4465 % | 2,562.4 |
| FixedFloater | 4.48 % | 3.77 % | 34,924 | 17.76 | 1 | 0.7601 % | 3,747.5 |
| Floater | 2.92 % | 2.93 % | 61,065 | 19.94 | 3 | 0.4465 % | 2,766.7 |
| OpRet | 4.64 % | 2.11 % | 80,747 | 0.40 | 3 | -0.0515 % | 2,661.9 |
| SplitShare | 4.85 % | 4.73 % | 68,595 | 4.45 | 5 | -0.0240 % | 3,022.5 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0515 % | 2,434.0 |
| Perpetual-Premium | 5.63 % | 5.43 % | 128,523 | 4.33 | 13 | 0.0889 % | 2,313.2 |
| Perpetual-Discount | 5.63 % | 5.69 % | 181,793 | 14.38 | 25 | 0.1325 % | 2,349.1 |
| FixedReset | 4.96 % | 3.49 % | 214,299 | 3.41 | 82 | 0.1239 % | 2,475.9 |
| Deemed-Retractible | 5.13 % | 4.15 % | 177,618 | 1.79 | 42 | 0.3042 % | 2,407.8 |
| FloatingReset | 2.62 % | 2.35 % | 245,624 | 4.35 | 5 | 0.2359 % | 2,469.4 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| GWO.PR.P | Deemed-Retractible | -1.28 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.97 Bid-YTW : 5.96 % |
| CU.PR.D | Perpetual-Discount | -1.24 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-01-03 Maturity Price : 22.63 Evaluated at bid price : 23.03 Bid-YTW : 5.36 % |
| CU.PR.E | Perpetual-Discount | -1.16 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-01-03 Maturity Price : 22.60 Evaluated at bid price : 22.99 Bid-YTW : 5.37 % |
| PWF.PR.S | Perpetual-Discount | 1.04 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-01-03 Maturity Price : 21.90 Evaluated at bid price : 22.25 Bid-YTW : 5.47 % |
| GWO.PR.Q | Deemed-Retractible | 1.05 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.15 Bid-YTW : 6.12 % |
| BAM.PR.X | FixedReset | 1.14 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-01-03 Maturity Price : 21.33 Evaluated at bid price : 21.33 Bid-YTW : 4.61 % |
| SLF.PR.D | Deemed-Retractible | 1.34 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.23 Bid-YTW : 6.41 % |
| SLF.PR.C | Deemed-Retractible | 1.43 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.21 Bid-YTW : 6.42 % |
| FTS.PR.F | Perpetual-Discount | 1.48 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-01-03 Maturity Price : 22.28 Evaluated at bid price : 22.56 Bid-YTW : 5.48 % |
| GWO.PR.N | FixedReset | 1.52 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.40 Bid-YTW : 5.07 % |
| BAM.PF.B | FixedReset | 1.56 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2019-03-31 Maturity Price : 25.00 Evaluated at bid price : 24.76 Bid-YTW : 4.44 % |
| SLF.PR.B | Deemed-Retractible | 1.59 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.40 Bid-YTW : 6.15 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| TRP.PR.D | FixedReset | 84,463 | RBC crossed blocks of 50,000 and 20,000, both at 25.20. YTW SCENARIO Maturity Type : Call Maturity Date : 2019-04-30 Maturity Price : 25.00 Evaluated at bid price : 25.15 Bid-YTW : 3.83 % |
| TD.PR.T | FloatingReset | 83,111 | Nesbit crossed 67,500 at 25.17. YTW SCENARIO Maturity Type : Call Maturity Date : 2018-07-31 Maturity Price : 25.00 Evaluated at bid price : 25.15 Bid-YTW : 2.35 % |
| NA.PR.O | FixedReset | 41,183 | Called for redemption. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-02-15 Maturity Price : 25.00 Evaluated at bid price : 25.38 Bid-YTW : 1.19 % |
| BNA.PR.C | SplitShare | 40,300 | RBC crossed blocks of 20,000 and 15,600, both at 24.26. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2019-01-10 Maturity Price : 25.00 Evaluated at bid price : 24.27 Bid-YTW : 5.12 % |
| CGI.PR.D | SplitShare | 28,300 | TD crossed 18,900 at 25.09. YTW SCENARIO Maturity Type : Soft Maturity Maturity Date : 2023-06-14 Maturity Price : 25.00 Evaluated at bid price : 25.00 Bid-YTW : 3.79 % |
| BNS.PR.R | FixedReset | 26,280 | Will reset at 3.83%. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-02-25 Maturity Price : 25.00 Evaluated at bid price : 25.12 Bid-YTW : -1.04 % |
| There were 13 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| GWO.PR.P | Deemed-Retractible | Quote: 23.97 – 24.53 Spot Rate : 0.5600 Average : 0.3715 YTW SCENARIO |
| BNS.PR.N | Deemed-Retractible | Quote: 25.72 – 26.10 Spot Rate : 0.3800 Average : 0.2284 YTW SCENARIO |
| RY.PR.X | FixedReset | Quote: 25.76 – 26.00 Spot Rate : 0.2400 Average : 0.1503 YTW SCENARIO |
| GWO.PR.I | Deemed-Retractible | Quote: 21.50 – 21.82 Spot Rate : 0.3200 Average : 0.2327 YTW SCENARIO |
| ENB.PR.H | FixedReset | Quote: 22.57 – 22.93 Spot Rate : 0.3600 Average : 0.2732 YTW SCENARIO |
| SLF.PR.A | Deemed-Retractible | Quote: 22.03 – 22.32 Spot Rate : 0.2900 Average : 0.2039 YTW SCENARIO |