The question of whether central banking and bank regulation functions should be separated or not is heating up again in the States:
Senator Christopher Dodd will propose creating a single U.S. regulator that would strip the Federal Reserve and Federal Deposit Insurance Corp. of bank- supervision authority, said a person familiar with the matter.
Dodd, chairman of the Senate Banking Committee, would eliminate the Office of the Comptroller of the Currency and the Office of Thrift Supervision and fold the Treasury Department units into the new bank regulator, according to the person, who spoke on condition of anonymity because the plan isn’t public. The Connecticut Democrat is scheduled to release a draft of his financial-regulation overhaul plan today in Washington.
Deutsche Bank sees a big increase in hedge fund assets coming:
Hedge fund assets may top the previous $2 trillion high by the end of next year as double-digit average returns lure investors, said Barry Bausano, Deutsche Bank AG’s global co-head of prime finance.
Hedge fund assets parked with Deutsche Bank have risen recently and global investors plan to allocate new capital next year, New York-based Bausano said during a visit to Hong Kong on Nov. 6. His division provides services and products ranging from securities lending to financing and derivatives to the industry.
As the banks retreat – and are forced away, like Citigroup / Philbro – from proprietary trading, I think it entirely reasonable to suppose that hedge funds will take their place. Naturally, there are all kinds of hedge funds, just as there are all kinds of investment manager: most of the principals will just be jumped-up stockbrokers, but some of them will know what they’re doing.
I am pleased to see Dealbreaker taking a stand against lousy programming practices, but I can’t help feeling that it’s more complex than they state. Surely writing wrappers around external APIs, formats and codes is standard?
Integrity. Character. Forthrightness. These are the regulatory buzzwords today. And Senator Dodd (STASI, Connecticut) will lead the way to Nirvana:
Securities and Exchange Commission employees would get $50,000 awards for snitching on each other, under Senate Banking Committee Chairman Christopher Dodd’s proposed legislation to overhaul financial regulation.
Ralph Cioffi and Matthew Tannin, whose hedge fund at Bear Stearns collapsed and presaged the onset of the credit crunch, are not guilty:
A jury of eight women and four men deliberated less than a day before reaching a verdict this afternoon. Cioffi, 53, the portfolio manager for the hedge funds, and Tannin, 48, their chief operating officer, went on trial Oct. 13 in federal court in Brooklyn, New York, on charges of conspiracy, securities and wire fraud. Each faced as many as 20 years in prison if convicted. When the verdicts were read, the two men didn’t visibly react. Their wives burst into tears.
…
Juror Aram Hong said e-mails sent by Cioffi and Tannin showed that the men were working “24-7” to save the funds in the months before they collapsed.“Just because you’re the captain of a ship and it gets hit doesn’t mean you should be blamed,” Hong said.
I have had no opinion on their guilt or innocence. There have been, and will be, convictions by the barrel related to the crisis; there’s always crime. But I also know that the US justice system is extraordinarily vindictive, that bursting into tears is ex-post de rigeur when things go wrong, that prosecutors are desperate for scalps to brandish during their next electoral campaign, and that the (shielded) regulators are desperate to divert attention from their own incompetence (who’s gone to jail for missing Madoff? Not criticized, not demoted, not fired … I want to know who has been charged with a criminal offense. Nobody? Golly, what a surprise). So I’m pleased by the verdict.
Another good strong day for preferreds, with PerpetualDiscounts gaining 19bp and FixedResets picking up 18bp. Volume recovered to good levels (GWO issues were a highlight), but I suspect that to get things really moving again we need more issuance.
| 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 | -0.3106 % | 1,482.6 |
| FixedFloater | 6.21 % | 4.31 % | 46,936 | 18.41 | 1 | 1.4493 % | 2,507.1 |
| Floater | 2.63 % | 3.10 % | 94,948 | 19.44 | 3 | -0.3106 % | 1,852.2 |
| OpRet | 4.80 % | -7.88 % | 119,068 | 0.09 | 14 | 0.1337 % | 2,308.4 |
| SplitShare | 6.34 % | 6.40 % | 383,562 | 3.90 | 2 | 0.0875 % | 2,087.2 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1337 % | 2,110.8 |
| Perpetual-Premium | 5.89 % | 5.82 % | 73,297 | 1.16 | 4 | -0.1287 % | 1,861.2 |
| Perpetual-Discount | 5.91 % | 5.95 % | 188,414 | 13.93 | 70 | 0.1894 % | 1,754.6 |
| FixedReset | 5.49 % | 4.06 % | 400,266 | 3.96 | 41 | 0.1849 % | 2,125.4 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| SLF.PR.C | Perpetual-Discount | -1.22 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-11-10 Maturity Price : 18.62 Evaluated at bid price : 18.62 Bid-YTW : 6.07 % |
| MFC.PR.C | Perpetual-Discount | 1.05 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-11-10 Maturity Price : 19.25 Evaluated at bid price : 19.25 Bid-YTW : 5.95 % |
| MFC.PR.A | OpRet | 1.10 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2010-07-19 Maturity Price : 26.25 Evaluated at bid price : 26.64 Bid-YTW : 2.56 % |
| GWO.PR.I | Perpetual-Discount | 1.10 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-11-10 Maturity Price : 19.26 Evaluated at bid price : 19.26 Bid-YTW : 5.93 % |
| BAM.PR.G | FixedFloater | 1.45 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-11-10 Maturity Price : 25.00 Evaluated at bid price : 17.50 Bid-YTW : 4.31 % |
| IAG.PR.C | FixedReset | 1.83 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-01-30 Maturity Price : 25.00 Evaluated at bid price : 27.85 Bid-YTW : 3.48 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| GWO.PR.J | FixedReset | 355,000 | TD crossed blocks of 135,000 and 100,000 shares at 27.10; RBC crossed 100,000 at the same price. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-01-30 Maturity Price : 25.00 Evaluated at bid price : 27.10 Bid-YTW : 4.02 % |
| GWO.PR.E | OpRet | 238,659 | TD crossed 25.80 at 206,200; then sold 19,500 to Nesbitt at 25.81. YTW SCENARIO Maturity Type : Call Maturity Date : 2009-12-10 Maturity Price : 25.50 Evaluated at bid price : 25.82 Bid-YTW : -4.28 % |
| GWO.PR.X | OpRet | 162,274 | Nesbitt crossed blocks of 25,000 and 120,000 shares, both at 26.05. YTW SCENARIO Maturity Type : Soft Maturity Maturity Date : 2013-09-29 Maturity Price : 25.00 Evaluated at bid price : 26.01 Bid-YTW : 3.85 % |
| MFC.PR.D | FixedReset | 141,609 | Nesbitt crossed 100,000 at 27.85, then 30,000 at the same price. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-19 Maturity Price : 25.00 Evaluated at bid price : 27.92 Bid-YTW : 4.12 % |
| TD.PR.E | FixedReset | 115,100 | RBC crossed three blocks, two of 25,000 and one of 15,000 shares, all at 27.25; Scotia crossed 11,300 at 27.25 then bought 22,900 from National at the same price. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-05-30 Maturity Price : 25.00 Evaluated at bid price : 27.30 Bid-YTW : 4.12 % |
| BNS.PR.X | FixedReset | 103,110 | RBC crossed 100,000 at 27.50. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-05-25 Maturity Price : 25.00 Evaluated at bid price : 27.47 Bid-YTW : 3.97 % |
| There were 39 other index-included issues trading in excess of 10,000 shares. | |||