Category: Market Action

Nothing happened today.

It was a mixed day for the Canadian preferred share market, with PerpetualDiscounts up 34bp, FixedResets off 3bp and DeemedRetractibles gaining 3bp. Volatility was low. Volume was average, with the highlights comprised entirely of FixedResets.

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	-0.2679 %	2,451.7
FixedFloater	4.74 %	4.34 %	32,471	17.70	1	-0.6442 %	3,581.7
Floater	2.97 %	3.06 %	52,875	19.59	4	-0.2679 %	2,647.2
OpRet	4.66 %	-0.03 %	86,267	0.22	3	-0.0259 %	2,683.1
SplitShare	4.82 %	4.25 %	59,920	4.33	5	0.1835 %	3,074.4
Interest-Bearing	0.00 %	0.00 %	0	0.00	0	-0.0259 %	2,453.4
Perpetual-Premium	5.63 %	-1.79 %	91,647	0.08	11	0.0322 %	2,352.3
Perpetual-Discount	5.45 %	5.50 %	126,675	14.54	26	0.3395 %	2,436.9
FixedReset	4.72 %	3.60 %	227,319	6.84	79	-0.0324 %	2,501.8
Deemed-Retractible	5.06 %	1.90 %	163,002	0.20	42	0.0347 %	2,466.2
FloatingReset	2.59 %	2.62 %	200,235	7.10	5	-0.1286 %	2,438.8

Performance Highlights
Issue	Index	Change	Notes
CU.PR.F	Perpetual-Discount	1.07 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-13 Maturity Price : 21.40 Evaluated at bid price : 21.73 Bid-YTW : 5.20 %
CU.PR.G	Perpetual-Discount	1.49 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-13 Maturity Price : 21.47 Evaluated at bid price : 21.75 Bid-YTW : 5.20 %

Volume Highlights
Issue	Index	Shares Traded	Notes
ENB.PF.A	FixedReset	496,550	New issue settled today. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-13 Maturity Price : 23.10 Evaluated at bid price : 24.95 Bid-YTW : 4.22 %
CIU.PR.C	FixedReset	342,100	RBC crossed 72,000 and two blocks of 135,000 each, both at 21.50. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-13 Maturity Price : 21.43 Evaluated at bid price : 21.43 Bid-YTW : 3.60 %
CM.PR.L	FixedReset	127,398	TD crossed blocks of 33,000 shares, 56,600 and 35,000, all at 25.37. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-30 Maturity Price : 25.00 Evaluated at bid price : 25.36 Bid-YTW : 1.21 %
BAM.PF.E	FixedReset	78,180	New issue settled today. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-13 Maturity Price : 22.97 Evaluated at bid price : 24.60 Bid-YTW : 4.22 %
FTS.PR.G	FixedReset	67,111	Nesbitt crossed blocks of 13,600 and 46,400, both at 24.51. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-13 Maturity Price : 23.02 Evaluated at bid price : 24.50 Bid-YTW : 3.77 %
FTS.PR.K	FixedReset	56,440	Nesbitt crossed 37,800 at 24.69. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-13 Maturity Price : 23.04 Evaluated at bid price : 24.65 Bid-YTW : 3.71 %
There were 34 other index-included issues trading in excess of 10,000 shares.

Wide Spread Highlights
Issue	Index	Quote Data and Yield Notes
PWF.PR.E	Perpetual-Discount	Quote: 24.70 – 24.99 Spot Rate : 0.2900 Average : 0.1762 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-13 Maturity Price : 24.46 Evaluated at bid price : 24.70 Bid-YTW : 5.64 %
TRP.PR.C	FixedReset	Quote: 22.28 – 22.55 Spot Rate : 0.2700 Average : 0.1760 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-13 Maturity Price : 21.78 Evaluated at bid price : 22.28 Bid-YTW : 3.68 %
CIU.PR.C	FixedReset	Quote: 21.43 – 21.88 Spot Rate : 0.4500 Average : 0.3640 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-13 Maturity Price : 21.43 Evaluated at bid price : 21.43 Bid-YTW : 3.60 %
ENB.PR.A	Perpetual-Premium	Quote: 25.25 – 25.50 Spot Rate : 0.2500 Average : 0.1758 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-12 Maturity Price : 25.00 Evaluated at bid price : 25.25 Bid-YTW : -4.39 %
ELF.PR.F	Perpetual-Discount	Quote: 23.36 – 23.60 Spot Rate : 0.2400 Average : 0.1842 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-13 Maturity Price : 23.10 Evaluated at bid price : 23.36 Bid-YTW : 5.76 %
IFC.PR.C	FixedReset	Quote: 25.30 – 25.50 Spot Rate : 0.2000 Average : 0.1460 YTW SCENARIO Maturity Type : Call Maturity Date : 2016-09-30 Maturity Price : 25.00 Evaluated at bid price : 25.30 Bid-YTW : 3.63 %

The robots are taking over:

When Minneapolis attorney William Greene faced the task of combing through 1.3 million electronic documents in a recent case, he turned to a so-called smart computer program. Three associates selected relevant documents from a smaller sample, “teaching” their reasoning to the computer. The software’s algorithms then sorted the remaining material by importance.

“We were able to get the information we needed after reviewing only 2.3 percent of the documents,” said Greene, a Minneapolis-based partner at law firm Stinson Leonard Street LLP.
…
The advances, coupled with mobile robots wired with this intelligence, make it likely that occupations employing almost half of today’s U.S. workers, ranging from loan officers to cab drivers and real estate agents, become possible to automate in the next decade or two, according to a study done at the University of Oxford in the U.K.

“These transitions have happened before,” said Carl Benedikt Frey, co-author of the study and a research fellow at the Oxford Martin Programme on the Impacts of Future Technology. “What’s different this time is that technological change is happening even faster, and it may affect a greater variety of jobs.”

This is exacerbated by the good old WASP work ethic:

About a dozen years ago, one of his biggest competitors started using undocumented Mexican laborers. At the time, the landscaper’s firm suffered high turnover and low productivity, and finding employees to do the actual landscaping — his company’s bread and butter — was difficult.

“We’ve never had anyone come in here looking for work,” he told me, on condition that I withhold his name. He found many of the Americans he has hired over the years to be unreliable and unwilling to work hard. Sometimes they quit; other times he has fired them.

Gradually, he started hiring Mexican laborers. All of them were able to provide Social Security numbers, though he understood they were bogus. “We have to have paperwork on these guys,” he said. “We just don’t have to have it be legitimate.”

In not entirely unrelated news, Fischer is indicating continued expansionary monetary policy:

Stanley Fischer, the nominee to be Federal Reserve vice chairman, said the world’s largest economy still needs the central bank’s unprecedented accommodation as joblessness remains elevated.

“At 6.7 percent, the unemployment rate remains too high,” Fischer, a former Bank of Israel governor and Citigroup Inc. vice chairman, said in remarks prepared for his confirmation hearing tomorrow before the Senate Banking Committee.

“Achievement of both maximum employment and price stability requires the continuation of an expansionary monetary policy — even though the degree of expansion is being gradually and cautiously cut back as the Fed reduces its monthly purchases” of securities, said Fischer, 70.

I’m told I’m not employing enough regulators, but that will change soon enough:

Under NI 31-103, OBSI’s membership will more than double to almost 1600 firms in the financial industry, including:

• •Investment Industry Regulatory Organization of Canada (IIROC) member firms
• •Mutual Fund Dealers Association of Canada (MFDA) member firms
• •Mutual fund companies
• •Exempt market dealers
• •Portfolio managers
• •Scholarship plan dealers
• •Forex trading services
• •Domestic and foreign-owned banks
• •Credit unions
• •Federal trust and loan companies and other deposit-taking organizations

Fabulous Fab has been fined for selling investments to dumb people:

Ex-Goldman Sachs Group Inc. (GS) vice president Fabrice Tourre, found liable for his part in a failed $1 billion investment, was ordered to pay more than $825,000 in the U.S. Securities and Exchange Commission case.

U.S. District Judge Katherine Forrest in Manhattan ruled today that Tourre must pay $650,000 in civil penalties and give up $175,463 of his 2007 bonus, plus interest. He can’t seek reimbursement of the penalties from Goldman Sachs, the judge ruled.

Tourre, 35, was found liable Aug. 1 after a jury trial at which the SEC claimed he intentionally misled investors in a subprime-mortgage vehicle called Abacus 2007-AC1. Tourre lied about the role played by billionaire John Paulson’s Paulson & Co. hedge fund, which helped choose the securities underlying Abacus then made a billion-dollar bet it would fail, the agency said.

… and the SEC weenies are high-fiving each other for their role in making the world a safer place for grossly incompetent professionals:

“We’re pleased that the judge’s decision imposes the disgorgement amount we recommended as well as other significant penalties for providing false marketing materials to investors. The ruling reflects the SEC’s intent of pursuing meaningful sanctions to punish individuals responsible for misconduct and deter others from violating the federal securities laws.”

Assiduous Readers will remember that the Feds are cancelling five hundred years of bankruptcy law by forcing banks to issue bail-in bonds, as discussed on November 14, 2013; following Lap-Dog Carney’s parroting of the official line without any research whatsoever. So what will be the effect of this? Logically, bail-in bonds will be riskier than banks’ current senior debt; therefore they should be more expensive to issue; therefore the banks will issue less of them and rely more on large-scale deposit notes, which have a shorter term. What will be the effect of all this? Teodora Paligorova and João Santos have written a paper titled Rollover Risk and the Maturity Transformation Function of Banks:

This paper shows that banks that rely heavily on short-term funding engage less in maturity transformation in an attempt to decrease their exposure to rollover risk. These banks shorten both the maturity of their portfolio of loans as well as the maturity of newly issued loans. We find that the loan yield curve becomes steeper with banks’ increasing use of short-term funding. The loan maturity shortening is driven by banks and affects borrowers’ financing choices – they turn to the bond market for long-term funding. To the extent that borrowers do not manage to compensate for the undesirable shortening of loan maturities by going to the bond market, they may become more exposed to rollover risk due to banks. This potential synchronization of banks’ and borrowers’ rollover risk can be a source of financial instability once short-term funding suddenly disappears.
…
Our results also help to explain the downward trend in the average maturity of outstanding bank loans over the past two decades, documented by Mian and Santos
(2011). [Footnote reads: While average maturity is close to four years in 1988, it declines to just over two-and-a-half-years in 2010.

The paper focusses on money-market instruments as ‘short-term funding’, but the implications are there. It would be really nice to see some research focussed on bail-in bonds as a major change in the structure of bank financing and the implications of this for lending and financial stability, but I don’t think the BoC will be doing much – not with the Parakeet in charge.

Speaking of Lapdog Carney, he his political puppetmasters have given him authority to identify risk as quickly as six years afterwards!

Senior bankers may be forced to pay back bonuses as long as six years after they cash the checks under proposed Bank of England rules to curb short-term financial risk-taking.

The central bank is readying rules that would take effect in 2015, Katherine Braddick, director for policy at the central bank’s Prudential Regulation Authority, said in a speech in London today. Braddick didn’t specify the circumstances under which the clawbacks would be enforced.

“The ability to apply clawback should further encourage the avoidance of excessive risk taking and the alignment of incentives with firms’ longer-term interests,” Braddick said.

The war on traders will have far-reaching consequences, none of which have ever been thought about.

If there’s one thing welfare bums love to do, it’s complain about poor service:

“They have made these changes to reduce their operating costs,” [Western Grain Elevator Association head] Mr. Sobkowich said. “This manifests itself as inadequate service – especially in circumstances when service requirements are higher because of a larger than normal crop and when operating conditions are difficult because of cold weather.“

Excess capacity and system robustness costs money. I wonder who’s going to pay for it. I know! Ottawa! Then Ottawa can write cheques to the railway companies for not shipping the grain that the farmers have been paid not to grow! Everybody wins!

Assiduous Reader DR brings a piece on no-contest settlements to my attention:

No-fault deals would give miscreants credit for co-operating with the OSC and allow the regulator to end enforcement action by simply levying a financial penalty. “These initiatives will allow us to resolve enforcement matters more quickly and issue more protective orders earlier, which would benefit both investors and the capital markets,” is how Tom Atkinson, the OSC’s director of enforcement justified the idea. In other words, these types of settlements will streamline the watchdog’s case log, conserve resources, claim more scalps and burnish its enforcement image. Market players and defence lawyers love it chiefly because it’s preferable to pay a fine than make high-risk admissions that can be used against them in other jurisdictions, such as the civil courts.

For that reason, investor protection advocates and class-action lawyers oppose the idea. OSC enforcement proceedings don’t result in direct compensation, thus fleeced investors and victims of fraud rely on admissions extracted by the regulator to get restitution through litigation, namely class-action lawsuits. “By dispensing with admission, enforcement staff would be leaving investors completely in the cold,” warned a submission filed by class-action law firm Siskinds LLP.

DR asks:

I confess I am confused, I don’t know if this is going to be for better or worse

I am unequivocally against no-contest settlements. If a company has done something wrong, they should be nailed to the wall – that’s the OSC’s putative job. If they haven’t done anything wrong, then the OSC should shut up.

No-contest settlements make it easier for the OSC to indulge in regulatory extortion … ‘OK, Mr. X, we can go after you for ten million dollars and we’ll tell our lawyers – who we have to pay anyway, so there’s no marginal cost on our side – to make it as expensive for you to fight it as they possibly can. Or we can agree on no-contest for $100,000.’ So the company agrees, because just fighting the charges will cost more than $100,000, and the regulator pads his resume with yet another impressive victory.

Enbridge was confirmed at Pfd-2(low) by DBRS:

EGD’s financial profile reflects an “A” rating, with all credit metrics remaining solidly within the current rating range. However, two concerns over the near to medium term are as follows: (1) Significant liquidity is required to finance EGD’s volatile working capital (mostly gas inventory for winter distributions). EGD’s liquidity is currently viewed as adequate to meet its operational needs given low natural gas prices. Should natural gas prices increase significantly, DBRS expects EGD to properly manage its liquidity to cope with that situation. (2) Large free cash flow deficits are expected over the next two years because of the $686.5 million GTA Expansion project. EGD’s parent (Enbridge Inc.) is expected to continue providing financial support for EGD. DBRS expects EGD to finance its cash flow shortfalls while maintaining the debt leverage within the regulatory capital structure and all other credit metrics within the DBRS “A” rating range. This project has been approved by the OEB and should provide good earnings growth once it is in service, which is expected to occur by the end of 2015.

It was a good day for the Canadian preferred share market, with PerpetualDiscounts winning 13bp, FixedResets gaining 5bp and DeemedRetractibles up 6bp. Volatility was basically zero – the only performance highlights are Floating Rate issues, which have been jumping around a lot lately according to the scheduling of global hyperinflation. Volume was slightly below average.

PerpetualDiscounts now yield 5.55%, equivalent to 7.22% interest at the standard equivalency factor of 1.3x. Long corporates now yield about 4.55%, so the pre-tax interest-equivalent spread is now about 265bp, a slight (and perhaps spurious) tightening from the 270bp reported March 5.

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	0.7113 %	2,458.3
FixedFloater	4.71 %	4.30 %	30,103	17.75	1	-3.6754 %	3,604.9
Floater	2.96 %	3.05 %	53,437	19.62	4	0.7113 %	2,654.3
OpRet	4.65 %	-0.03 %	87,423	0.22	3	0.0483 %	2,683.8
SplitShare	4.83 %	4.41 %	60,283	4.33	5	-0.0797 %	3,068.7
Interest-Bearing	0.00 %	0.00 %	0	0.00	0	0.0483 %	2,454.0
Perpetual-Premium	5.63 %	-0.25 %	92,185	0.08	11	-0.0751 %	2,351.6
Perpetual-Discount	5.47 %	5.55 %	130,851	14.41	26	0.1292 %	2,428.6
FixedReset	4.72 %	3.55 %	227,580	6.83	77	0.0543 %	2,502.6
Deemed-Retractible	5.06 %	1.66 %	163,903	0.20	42	0.0638 %	2,465.4
FloatingReset	2.59 %	2.57 %	194,589	7.11	5	0.0724 %	2,441.9

Performance Highlights
Issue	Index	Change	Notes
BAM.PR.G	FixedFloater	-3.68 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-12 Maturity Price : 25.00 Evaluated at bid price : 20.18 Bid-YTW : 4.30 %
BAM.PR.C	Floater	1.24 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-12 Maturity Price : 17.17 Evaluated at bid price : 17.17 Bid-YTW : 3.05 %

Volume Highlights
Issue	Index	Shares Traded	Notes
MFC.PR.L	FixedReset	138,400	Recent new issue. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.36 Bid-YTW : 4.18 %
BNS.PR.L	Deemed-Retractible	64,812	Nesbitt crossed 60,800 at 25.70. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-26 Maturity Price : 25.50 Evaluated at bid price : 25.70 Bid-YTW : 1.86 %
CM.PR.D	Perpetual-Premium	56,150	Nesbitt crossed 46,000 at 25.58. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-11 Maturity Price : 25.00 Evaluated at bid price : 25.56 Bid-YTW : -13.00 %
HSB.PR.E	FixedReset	44,640	Scotia crossed 30,000 at 25.34. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-06-30 Maturity Price : 25.00 Evaluated at bid price : 25.32 Bid-YTW : 1.14 %
TRP.PR.A	FixedReset	38,532	Nesbitt crossed 20,000 at 23.10. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-12 Maturity Price : 22.27 Evaluated at bid price : 23.05 Bid-YTW : 3.82 %
ENB.PR.J	FixedReset	37,955	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-12 Maturity Price : 23.16 Evaluated at bid price : 25.00 Bid-YTW : 4.15 %
There were 27 other index-included issues trading in excess of 10,000 shares.

Wide Spread Highlights
Issue	Index	Quote Data and Yield Notes
BNA.PR.E	SplitShare	Quote: 25.41 – 25.86 Spot Rate : 0.4500 Average : 0.3127 YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2017-12-10 Maturity Price : 25.00 Evaluated at bid price : 25.41 Bid-YTW : 4.41 %
BAM.PR.G	FixedFloater	Quote: 20.18 – 20.52 Spot Rate : 0.3400 Average : 0.2081 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-12 Maturity Price : 25.00 Evaluated at bid price : 20.18 Bid-YTW : 4.30 %
W.PR.J	Perpetual-Discount	Quote: 24.82 – 25.18 Spot Rate : 0.3600 Average : 0.2585 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-12 Maturity Price : 24.57 Evaluated at bid price : 24.82 Bid-YTW : 5.73 %
TD.PR.O	Deemed-Retractible	Quote: 25.45 – 25.69 Spot Rate : 0.2400 Average : 0.1547 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-11 Maturity Price : 25.25 Evaluated at bid price : 25.45 Bid-YTW : 1.39 %
RY.PR.C	Deemed-Retractible	Quote: 25.65 – 25.86 Spot Rate : 0.2100 Average : 0.1346 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-11 Maturity Price : 25.50 Evaluated at bid price : 25.65 Bid-YTW : -0.25 %
FTS.PR.J	Perpetual-Discount	Quote: 22.61 – 22.90 Spot Rate : 0.2900 Average : 0.2147 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-12 Maturity Price : 22.28 Evaluated at bid price : 22.61 Bid-YTW : 5.28 %

Banner headline on Bloomberg – An FX trade didn’t work out:

A senior currency dealer at Lloyds Banking Group Plc shared details of a pending order by his firm with a trader at another company to the potential detriment of the bank, according to four people with knowledge of the matter.

The Lloyds’s dealer, Martin Chantree, alerted the other trader on Jan. 31, 2013, that his desk had received instructions from the bank’s treasury department to swap more than 300 million pounds ($499 million) for dollars and that they would continue selling regardless of price movements, said two of the people, who asked not to be identified amid a probe into alleged rigging of the currency market. The recipient of the tip worked for oil company BP Plc, the other two people said.

In the seven minutes between the communication at 10:53 a.m. and the time Lloyds began executing the order, the pound fell 16 basis points against the dollar, or 0.16 percentage point, according to data compiled by Bloomberg. As the U.K. currency tumbled, costing Lloyds an estimated $750,000, Chantree told colleagues that maybe he shouldn’t have shared the information, two of the people said.
…
Lloyds suspended Chantree on Feb. 3 after inquiries by Bloomberg News about his alleged communications in advance of the trade. The London-based bank, which is 33 percent owned by the U.K. government, approached the FCA after discovering messages, including the 10:53 a.m. voice communication in which Chantree detailed the size and timing of the order, two of the people said.
…
Between 10:53 a.m. and 11 a.m. on the day of the trade, about when Lloyds began selling, the pound-dollar exchange rate fell to 1.5790 from 1.5815, data compiled by Bloomberg show.
…
Lloyds did internal deals of that size only six or seven times a year, two of the people said. When an order came in, some traders on the second floor of the bank’s Gresham Street headquarters in London’s financial district would place their own bets before executing the trade in a way that moved the market as much as possible, one of the people said. They were able to do this because notice was typically sent to more than one trader on the desk and Lloyds’s treasury unit didn’t scrutinize whether it got the best price, the person said. There’s no indication Chantree placed such bets that morning.

Well, sure. If you’re going to do size, you’ve got to show size. And sometimes showing size means everybody on the opposite side pulls their orders … which is consistent with what happened. Why else do you think dark pools are so popular? Trading size is more of an art than a science, and sometimes it’s art with a capital F. I will be kind and assume that Lloyds has suspended its trader only because they’re terrified of the regulators nowadays.

It seems very likely that the villain of the piece is Lloyds treasury. A market order for half a billion bucks? I will need to see a long detailed explanation before I’m convinced they’re not idiots.

Lest anybody think that I always take the traders’ side, I will say: front-running orders of this type was clearly wrong. In case of this particular type, the traders do in fact owe a fiduciary client to their institutional client … but only because the client is also their employer.

We may finally be approaching the approaching the elimination of the GSEs:

The bipartisan measure, drafted with input from President Barack Obama’s administration, would replace the U.S.-owned mortgage financiers with government bond insurance that would kick in only after private capital suffered losses of at least 10 percent, Senate Banking Committee Chairman Tim Johnson and Senator Mike Crapo said in a statement today. The bill would require most borrowers to make down payments of at least 5 percent.
…
The government would play a smaller role in the market by taking a backstop position on mortgage securities, stepping in only if private interests were wiped out by catastrophic losses. A new agency called the Federal Mortgage Insurance Corp. would charge fees to issue a government guarantee on bonds that would kick in only after private investors suffered losses of at least 10 percent.

It was a mixed day for the Canadian preferred share market, with PerpetualDiscounts up 17bp, FixedResets off 10bp and DeemedRetractibles gaining 4bp. Volatility was above average due to stellar performance from Floating Rate issues, indicating that the recently postponed global hyperinflation has now been rescheduled. Volume was high.

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	1.2437 %	2,440.9
FixedFloater	4.53 %	3.80 %	28,424	17.76	1	1.2566 %	3,742.5
Floater	2.97 %	3.10 %	53,774	19.41	4	1.2437 %	2,635.5
OpRet	4.64 %	0.12 %	83,169	0.22	3	0.0129 %	2,682.5
SplitShare	4.82 %	4.38 %	58,752	4.34	5	0.2237 %	3,071.2
Interest-Bearing	0.00 %	0.00 %	0	0.00	0	0.0129 %	2,452.9
Perpetual-Premium	5.63 %	-1.56 %	92,007	0.08	11	0.1002 %	2,353.3
Perpetual-Discount	5.47 %	5.55 %	133,316	14.40	26	0.1674 %	2,425.5
FixedReset	4.72 %	3.55 %	230,035	6.84	77	-0.0996 %	2,501.2
Deemed-Retractible	5.06 %	3.07 %	163,086	0.21	42	0.0434 %	2,463.8
FloatingReset	2.59 %	2.59 %	193,808	7.11	5	0.0724 %	2,440.2

Performance Highlights
Issue	Index	Change	Notes
SLF.PR.G	FixedReset	-1.12 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.01 Bid-YTW : 4.59 %
BAM.PR.T	FixedReset	-1.09 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-11 Maturity Price : 23.22 Evaluated at bid price : 24.59 Bid-YTW : 4.06 %
BAM.PR.N	Perpetual-Discount	1.03 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-11 Maturity Price : 20.62 Evaluated at bid price : 20.62 Bid-YTW : 5.88 %
BAM.PR.G	FixedFloater	1.26 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-11 Maturity Price : 21.58 Evaluated at bid price : 20.95 Bid-YTW : 3.80 %
BAM.PR.C	Floater	1.54 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-11 Maturity Price : 17.09 Evaluated at bid price : 17.09 Bid-YTW : 3.10 %
BAM.PR.B	Floater	1.78 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-11 Maturity Price : 17.13 Evaluated at bid price : 17.13 Bid-YTW : 3.10 %
BAM.PR.K	Floater	1.86 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-11 Maturity Price : 17.01 Evaluated at bid price : 17.01 Bid-YTW : 3.12 %

Volume Highlights
Issue	Index	Shares Traded	Notes
RY.PR.L	FixedReset	444,773	I think Jacob Securities crossed 350,600 at 25.80, but it’s not clear. TMXMoney.com agrees on the total volue, and the VWAP makes sense, but the block trade report just shows a trade and cancel at 25.80 with no replacement. Also, the price is extremely low. So who knows? RBC crossed 76,000 at 26.03, which seems like a much more credible trade. YTW SCENARIO Maturity Type : Call Maturity Date : 2019-02-24 Maturity Price : 25.00 Evaluated at bid price : 26.11 Bid-YTW : 3.34 %
BNS.PR.T	FixedReset	157,054	RBC crossed 33,000 at 25.34; Scotia crossed two blocks of 59,300 each, both at 25.32, eleven minutes apart. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-25 Maturity Price : 25.00 Evaluated at bid price : 25.32 Bid-YTW : 1.13 %
RY.PR.Z	FixedReset	121,435	RBC crossed 97,000 at 25.45. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-11 Maturity Price : 23.27 Evaluated at bid price : 25.39 Bid-YTW : 3.70 %
BAM.PF.C	Perpetual-Discount	107,060	RBC crossed blocks of 16,100 and 79,900, both at 20.75. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-11 Maturity Price : 20.76 Evaluated at bid price : 20.76 Bid-YTW : 5.97 %
MFC.PR.C	Deemed-Retractible	87,044	Nesbitt crossed 30,000 at 21.78; RBC crossed 46,200 at 21.75. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.67 Bid-YTW : 6.22 %
BNS.PR.Z	FixedReset	64,733	Scotia bought 31,100 from anonymous at 24.00. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.00 Bid-YTW : 3.82 %
There were 47 other index-included issues trading in excess of 10,000 shares.

Wide Spread Highlights
Issue	Index	Quote Data and Yield Notes
GCS.PR.A	SplitShare	Quote: 25.08 – 25.46 Spot Rate : 0.3800 Average : 0.2618 YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2019-07-31 Maturity Price : 25.00 Evaluated at bid price : 25.08 Bid-YTW : 4.08 %
HSE.PR.A	FixedReset	Quote: 22.54 – 22.82 Spot Rate : 0.2800 Average : 0.1723 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-11 Maturity Price : 22.25 Evaluated at bid price : 22.54 Bid-YTW : 3.82 %
GWO.PR.F	Deemed-Retractible	Quote: 25.31 – 25.62 Spot Rate : 0.3100 Average : 0.2156 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-10 Maturity Price : 25.00 Evaluated at bid price : 25.31 Bid-YTW : -12.81 %
ELF.PR.H	Perpetual-Discount	Quote: 24.15 – 24.40 Spot Rate : 0.2500 Average : 0.1598 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-11 Maturity Price : 23.76 Evaluated at bid price : 24.15 Bid-YTW : 5.77 %
SLF.PR.G	FixedReset	Quote: 22.01 – 22.24 Spot Rate : 0.2300 Average : 0.1527 YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.01 Bid-YTW : 4.59 %
TD.PR.Q	Deemed-Retractible	Quote: 26.08 – 26.31 Spot Rate : 0.2300 Average : 0.1627 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-10 Maturity Price : 25.75 Evaluated at bid price : 26.08 Bid-YTW : -3.22 %

Canada’s central planners are flexing their muscles:

Ottawa is forcing Canada’s two main railway companies to double the amount of grain they ship in a week to try to unclog a transport bottleneck that has left piles of grain sitting in bins across the Prairies.

Transport Minister Lisa Raitt said cabinet has passed an order-in-council that gives Canadian National and Canadian Pacific a month to start moving a minimum of one million tonnes of grain in 11,000 cars each week.

I wonder what goods won’t get moved because of pandering to farmers. I wonder what the price of transport would be in a free market.

Let’s hope this becomes a trend:

JPMorgan Chase & Co. (JPM), Deutsche Bank AG, UBS AG (UBSN) and Depfa Bank Plc won a bid to overturn a conviction for overseeing fraud by their bankers in the sale of derivatives to the city of Milan.

An appeals court in Milan cleared the banks and individuals at the firms because “the alleged crimes didn’t take place,” Judge Luigi Martino said as he read out the verdict today.

There’s no shortage of government debt to buy:

The amount of debt globally has soared more than 40 percent to $100 trillion since the first signs of the financial crisis as governments borrowed to pull their economies out of recession and companies took advantage of record low interest rates, according to the Bank for International Settlements.

The $30 trillion increase from $70 trillion between mid-2007 and mid-2013 compares with a $3.86 trillion decline in the value of equities to $53.8 trillion in the same period, according to data compiled by Bloomberg. The jump in debt as measured by the Basel, Switzerland-based BIS in its quarterly review is almost twice the U.S.’s gross domestic product.

Borrowing has soared as central banks suppress benchmark interest rates to spur growth after the U.S. subprime mortgage market collapsed and Lehman Brothers Holdings Inc.’s bankruptcy sent the world into its worst financial crisis since the Great Depression. Yields on all types of bonds, from governments to corporates and mortgages, average about 2 percent, down from more than 4.8 percent in 2007, according to the Bank of America Merrill Lynch Global Broad Market Index.

On March 7 I mentioned some competition in American health-care. Here’s some abuse of the system:

Allegations that pre-scheduled cath-lab patients showed up at the ER may signal efforts to get unwarranted payments from health insurers or federal coverage programs for patients who wouldn’t be covered otherwise, said James Sheehan, chief of the charities unit for the New York state attorney general’s office. Sheehan, a former inspector general of the state’s Medicaid system, was speaking generally, not specifically about Mount Sinai.

In emergency situations, patients cannot be turned away just because they can’t pay for care, according to federal and New York state laws. New York’s Medicaid system spends about $500 million a year on emergency procedures for uninsured patients.

After Andy Jagoda, Mount Sinai’s emergency-department chief, heard in 2012 that cardiologists were sending patients through the emergency ward with previously scheduled cath-lab appointments, he indicated that he had brought the matter up with the hospital’s administration and would do so again. Mount Sinai declined to make Jagoda available for an interview.

…
On average, doctors who have financial ties to the hospital — such as arrangements to provide Mount Sinai cardiologists with office space for a fee — tend to make more referrals, based on data from 2010. In that year, seven doctors or practices that had such business dealings with Mount Sinai referred 301 patients to the cath lab on average — 15 times the average referrals made by all 546 doctors who sent patients to the lab that year, according to hospital documents.
…
New York’s rates are driven by a “surplus” of cath labs seeking patients, a competition that spurs usage of hospitals’ facilities and doctors’ expertise that’s unrelated to patients’ needs and distorts the market for heart procedures, Marmur said. “The pendulum is way out of whack,” he said. “It drives up the cost of health care for everyone.”

I claim this sort of highly suspicious nonsense is inevitable whenever the consumer of a service doesn’t have to pay for it.

Some charming little box-tickers are whimpering about bond covenants:

…major players such as Canso Investment Counsel and Manulife Financial Corp. came together roughly two years ago to create the Canadian Bond Investors’ Association.
…
After working with lawyers to draft a working paper, the industry group is now advocating for four fundamental changes to debt covenants. The improvements include new standardized language around a “change of control,” or a switch in company ownership. At the moment, companies can have multiple bonds that each come with different rules on how they will be treated in this situation.

For instance, Safeway Inc., the giant U.S. grocery chain that is now the target of a $9-billion (U.S.) leveraged buyout, has a number of bonds outstanding, and each has different change-of-control provisions. Some bondholders are allowed to sell their bonds back to the acquirer, Cerberus, for full value, while others cannot.

I can tell you as a fact that when such a thing occurs, it is a total surprise to most owners, as they read the term-sheets and prospectuses for the very first time. By and large, the Canadian bond market is oblivious to anything that’s not included in the Bloomberg summary.

To address this inequity, bond investors want issuers to be required to enhance their coupon payments by a preset amount – it could be 100 or 200 basis points – in similar situations in the future, but only if a company loses its investment grade rating.

Yes, it will be a better world, as soon as there are more rules, more red tape, more regulators and more lawyers. It never occurs to any of these clowns that they have a choice regarding what to buy; if big enough, they can even approach issuers themselves with a proposal for a private placement.

TransAlta Corp., proud issuer of , was confirmed at Pfd-3(stable) by DBRS:

TAC’s key credit metrics are currently in the BB (high) range, which provides the Company with very limited financial flexibility. However, key credit metrics are expected to improve following the 38% decrease in dividend payouts and the reduction of debt with the proceeds from the sale of non-core assets (see the DBRS press release dated February 20, 2014). In addition, the Company is expected to generate a free cash flow surplus in 2014, which is expected to further improve its leverage modestly. The Stable trend reflects DBRS’s expectation that TAC will improve its key credit metrics to the BBB (low) range, including leverage to near or below 50% by the end of 2014. DBRS also expects TAC to continue to fund any significant unforeseen costs, cash shortfalls and/or acquisitions in a prudent manner to prevent any further deterioration of key credit metrics. Any delay in reducing leverage, or further weakness of other key credit metrics, could result in a negative rating action.

It was a good day for the Canadian preferred share market, with PerpetualDiscounts winning 12bp, FixedResets gaining 3bp and DeemedRetractibles up 8bp. Volatility was minimal. Volume was below average.

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	-0.2424 %	2,411.0
FixedFloater	4.59 %	3.86 %	27,214	17.67	1	0.0968 %	3,696.0
Floater	3.00 %	3.15 %	54,685	19.28	4	-0.2424 %	2,603.2
OpRet	4.64 %	-0.03 %	82,381	0.23	3	-0.0129 %	2,682.1
SplitShare	4.83 %	4.50 %	56,235	4.34	5	0.1120 %	3,064.3
Interest-Bearing	0.00 %	0.00 %	0	0.00	0	-0.0129 %	2,452.5
Perpetual-Premium	5.63 %	-0.45 %	92,953	0.08	11	0.0322 %	2,351.0
Perpetual-Discount	5.48 %	5.56 %	134,211	14.39	26	0.1156 %	2,421.4
FixedReset	4.71 %	3.53 %	230,411	6.78	77	0.0311 %	2,503.7
Deemed-Retractible	5.07 %	2.31 %	164,520	0.21	42	0.0782 %	2,462.7
FloatingReset	2.59 %	2.61 %	196,040	7.11	5	-0.1125 %	2,438.4

Performance Highlights
Issue	Index	Change	Notes
TRP.PR.A	FixedReset	-1.03 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-10 Maturity Price : 22.54 Evaluated at bid price : 23.12 Bid-YTW : 3.82 %

Volume Highlights
Issue	Index	Shares Traded	Notes
IAG.PR.F	Deemed-Retractible	211,190	Scotia crossed 208,000 at 25.40. Nice ticket! YTW SCENARIO Maturity Type : Call Maturity Date : 2018-03-31 Maturity Price : 25.25 Evaluated at bid price : 25.37 Bid-YTW : 5.65 %
SLF.PR.A	Deemed-Retractible	54,455	Scotia crossed 40,000 at 22.74. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.59 Bid-YTW : 5.96 %
TRP.PR.E	FixedReset	53,258	TD bought 10,000 from Scotia at 25.05. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-10 Maturity Price : 23.13 Evaluated at bid price : 25.02 Bid-YTW : 3.96 %
ENB.PR.J	FixedReset	49,418	Scotia crossed 10,100 at 25.00. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-10 Maturity Price : 23.16 Evaluated at bid price : 25.00 Bid-YTW : 4.14 %
MFC.PR.L	FixedReset	45,235	Recent new issue. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.34 Bid-YTW : 4.18 %
ENB.PR.P	FixedReset	43,966	RBC crossed 22,100 at 24.19. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-10 Maturity Price : 22.82 Evaluated at bid price : 24.09 Bid-YTW : 4.18 %
There were 26 other index-included issues trading in excess of 10,000 shares.

Wide Spread Highlights
Issue	Index	Quote Data and Yield Notes
TRP.PR.B	FixedReset	Quote: 20.11 – 20.40 Spot Rate : 0.2900 Average : 0.2033 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-10 Maturity Price : 20.11 Evaluated at bid price : 20.11 Bid-YTW : 3.69 %
MFC.PR.C	Deemed-Retractible	Quote: 21.58 – 21.83 Spot Rate : 0.2500 Average : 0.1732 YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.58 Bid-YTW : 6.27 %
FTS.PR.G	FixedReset	Quote: 24.25 – 24.48 Spot Rate : 0.2300 Average : 0.1576 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-10 Maturity Price : 22.92 Evaluated at bid price : 24.25 Bid-YTW : 3.82 %
PWF.PR.L	Perpetual-Discount	Quote: 23.64 – 23.95 Spot Rate : 0.3100 Average : 0.2408 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-10 Maturity Price : 23.18 Evaluated at bid price : 23.64 Bid-YTW : 5.44 %
ENB.PR.A	Perpetual-Premium	Quote: 25.30 – 25.50 Spot Rate : 0.2000 Average : 0.1377 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-09 Maturity Price : 25.00 Evaluated at bid price : 25.30 Bid-YTW : -7.26 %
BNS.PR.B	FloatingReset	Quote: 24.70 – 24.84 Spot Rate : 0.1400 Average : 0.0880 YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.70 Bid-YTW : 2.68 %

Last mentioned on January 31, 2013, the Litvak case has been brought to an appalling new development:

Litvak, 39, of New York, was found guilty by a federal jury today of all counts including securities fraud and making false statements as well as fraud connected to the U.S. government’s Troubled Asset Relief Program following a trial before U.S. District Judge Janet C. Hall in New Haven, Connecticut. He is scheduled to be sentenced May 30.
…
Prosecutors accused Litvak of defrauding investors of $2 million by misrepresenting how much sellers were asking for the securities, or what customers would pay, and keeping the difference for New York-based Jefferies. Richard Khaleel, a spokesman for Jefferies, declined to comment on the verdict.

Litvak was also accused of defrauding investors by telling some buyers that the bonds in the Jefferies inventory were being offered for sale by a third-party seller that didn’t exist. Prosecutors said the claim allowed Litvak to charge an extra commission and increase the profitability of his trades as his trading revenue declined.

Smith said the judge didn’t allow the testimony of expert witnesses who would have testified about the mortgage-backed securities markets and would have shown Litvak’s “good faith state of mind,” and also made several evidentiary rulings limiting the amount of evidence about similar behavior of other Jefferies traders and employees.

So the US is trying to make markets safe for grossly incompetent professional traders. I don’t know where this will end. Trying to pretend that negotiating 9-figure financial deals as principal is not a jungle will lead to more problems than it solves – the world needs fewer “cooperative games” and more recognition of reality:

On the Crimean issue (I think the French and British should arrange for support from Turkey and invade again), the markets are doing a better job than the Boo-Hoo-Hoo Brigade.

Dudley reiterated that tapering is not the same as tightening:

Federal Reserve Bank of New York President William C. Dudley said he sees a “reasonably favorable” outlook for the U.S. economy, even as elevated joblessness and too-low inflation warrant a high level of stimulus for a “considerable time.”

“I would very much prefer faster economic growth and more rapid progress towards our dual mandate objectives of maximum sustainable employment and price stability,” Dudley said today in the text of remarks given at Brooklyn College in New York. “Hence, the continued need for monetary policy to remain highly accommodative to support the economic recovery to the fullest.”

Dudley said a decline in the jobless rate “significantly overstates the degree of improvement in the labor market” because much of the decrease has been caused by people dropping out of the job market. Unemployment fell to 6.7 percent in December, close to Fed’s threshold for considering an increase in the benchmark interest rate, from 7.5 percent last June.

There are stirrings of long overdue competition in US health care:

In the changing world of health care, patients are finding that the best care may be several hundred miles away.

When Travis Bumbaugh needed heart surgery, the Pennsylvania general contractor chose the cheapest option in the Lowe’s Cos. (LOW) health plan. He flew to Cleveland, to one of the top-rated heart hospitals in the nation.

By bundling all costs for the surgery under one negotiated price and offering expertise that lowers the odds of complications, the Cleveland Clinic gave Bumbaugh and his employer a better deal than the hospital close to his home. In some cases, hospitals will drop their prices as much as 40 percent to guarantee a steady stream of patients they wouldn’t have otherwise, said Terry White, president of the BridgeHealth Medical Inc., a Denver-based benefit manager.

To encourage employees, Lowe’s covers the full cost of surgery, as well as travel and lodging for the worker and a relative. The company health plan won’t cover thousands of dollars of unbundled costs at local hospitals.

It was an off day for the Canadian preferred share market, with PerpetualDiscounts off 1bp, FixedResets down 5bp and DeemedRetractibles losing 10bp. Volatility was minimal. Volume was on the high side of average.

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	0.2144 %	2,416.8
FixedFloater	4.60 %	3.86 %	27,376	17.67	1	0.0000 %	3,692.4
Floater	2.99 %	3.14 %	55,278	19.30	4	0.2144 %	2,609.5
OpRet	4.64 %	0.11 %	76,662	0.24	3	-0.0515 %	2,682.5
SplitShare	4.84 %	4.49 %	54,871	4.35	5	0.1041 %	3,060.9
Interest-Bearing	0.00 %	0.00 %	0	0.00	0	-0.0515 %	2,452.9
Perpetual-Premium	5.64 %	-1.84 %	92,649	0.08	11	-0.0822 %	2,350.2
Perpetual-Discount	5.48 %	5.58 %	135,300	14.40	26	-0.0117 %	2,418.6
FixedReset	4.72 %	3.53 %	229,440	6.84	77	-0.0537 %	2,503.0
Deemed-Retractible	5.07 %	2.95 %	165,406	0.31	42	-0.0994 %	2,460.8
FloatingReset	2.59 %	2.60 %	198,528	7.12	5	-0.1284 %	2,441.1

Performance Highlights
Issue	Index	Change	Notes
CIU.PR.C	FixedReset	-1.06 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-07 Maturity Price : 21.38 Evaluated at bid price : 21.38 Bid-YTW : 3.60 %

Volume Highlights
Issue	Index	Shares Traded	Notes
TRP.PR.C	FixedReset	169,062	RBC crossed four blocks, 49,400 shares, 49,100 shares, 40,800 and 11,100, all at 22.20. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-07 Maturity Price : 21.74 Evaluated at bid price : 22.21 Bid-YTW : 3.69 %
RY.PR.Z	FixedReset	148,502	RBC crossed blocks of 49,900 and 50,000, both at 25.45. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-07 Maturity Price : 23.28 Evaluated at bid price : 25.41 Bid-YTW : 3.69 %
MFC.PR.L	FixedReset	137,160	Recent new issue. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.35 Bid-YTW : 4.17 %
MFC.PR.E	FixedReset	82,460	RBC crossed 36,500 at 25.35; TD crossed 40,000 at the same price. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-09-19 Maturity Price : 25.00 Evaluated at bid price : 25.35 Bid-YTW : 2.61 %
BNS.PR.X	FixedReset	76,545	RBC crossed blocks of 25,000 and 40,000, both at 25.34. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-25 Maturity Price : 25.00 Evaluated at bid price : 25.33 Bid-YTW : 0.74 %
TD.PR.O	Deemed-Retractible	53,829	TD crossed 50,000 at 25.50. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-06 Maturity Price : 25.25 Evaluated at bid price : 25.45 Bid-YTW : 0.60 %
There were 39 other index-included issues trading in excess of 10,000 shares.

Wide Spread Highlights
Issue	Index	Quote Data and Yield Notes
CIU.PR.A	Perpetual-Discount	Quote: 21.41 – 21.97 Spot Rate : 0.5600 Average : 0.4456 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-07 Maturity Price : 21.41 Evaluated at bid price : 21.41 Bid-YTW : 5.41 %
PWF.PR.F	Perpetual-Discount	Quote: 24.08 – 24.35 Spot Rate : 0.2700 Average : 0.1895 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-07 Maturity Price : 23.83 Evaluated at bid price : 24.08 Bid-YTW : 5.51 %
NA.PR.L	Deemed-Retractible	Quote: 25.26 – 25.47 Spot Rate : 0.2100 Average : 0.1468 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-05-15 Maturity Price : 25.00 Evaluated at bid price : 25.26 Bid-YTW : 0.74 %
PWF.PR.A	Floater	Quote: 19.69 – 20.09 Spot Rate : 0.4000 Average : 0.3426 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-07 Maturity Price : 19.69 Evaluated at bid price : 19.69 Bid-YTW : 2.68 %
GWO.PR.G	Deemed-Retractible	Quote: 24.05 – 24.22 Spot Rate : 0.1700 Average : 0.1160 YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.05 Bid-YTW : 5.66 %
TD.PR.O	Deemed-Retractible	Quote: 25.45 – 25.61 Spot Rate : 0.1600 Average : 0.1095 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-06 Maturity Price : 25.25 Evaluated at bid price : 25.45 Bid-YTW : 0.60 %

Nothing happened today, but I must say that I am astonished at the UofO hockey-team / facebook chat kerfuffle:

As the University of Ottawa wrestles with its response to a week of sexually charged scandals, its leaders promised a new task force to help the school “face up” to issues of violence within the campus culture.

The university’s president, Allan Rock, announced a task force on respect and equality in his first public comments since his school revealed on Monday that police are investigating an alleged sexual assault involving some players from its men’s hockey team. At a Thursday news conference with Michaëlle Jean, the U of O’s chancellor and a former Governor-General, he pledged to “take fearless inventory of our practices and our assumptions.”

The university is still staggering from another revelation, days earlier, of a sexually graphic online chat that several student leaders had about a colleague. In response, many at the school have decried a “rape culture” they say is quietly pervasive on and off campus. Now, public attention is focusing on whether universities are willing and able to drive changes to social attitudes that minimize the real impact of sexual violence.

I simply cannot understand why “changes to social attitudes” are any of the universities’ business; I have come up with a few explanations:

• Young people are being infantilized – 35 is the new 20, as far as maturity goes. Used to be that at age 20, most people would get a job, get married, buy a house … all that grown-up stuff. Now, there’s a longer period of adolescence before adulthood, and the universities are responding to that (while under pressure).
• University administrations are being feminized … when I was of university age, the fact that more than half of all undergrads were female was front page news. Now the proportion is pushing 60% in the US and I’ll guess it’s the same here. So administrations are responding to that and they’re also responding to (what I assume is, without any data at all) an increasing female component of influential administrative staff. A male will – stereotypically – respond to nastiness on his own, while females will – stereotypically – seek to organize a clique to punish the offender properly; this is what the universities are now doing
• Normal bureaucratic mission creep. “We’re in a position to do so much good! Therefore we must promote proper behaviour!”
• It’s all marketting. All the universities now have MBAs in their admissions department who don’t care about much other than getting lots of admission applications through a Positive Public Image. The potential for bequests and alumni donations is important too.

That’s the best I can do; feel free to respond in the comments, even if it’s only to tell me you’re here for the preferred shares and I should shut the hell up (if male) or that you have brought my views to the attention of the appropriate authorities (if female). But one implication of all these precious bureaucrats having earnest discussions with each other about Proper Standards Of Behaviour, and sitting in tribunals to Enforce Promote Community Expectations Of A Safe Learning Environment is increased costs. This type of non-academic activity at universities is one reason why the price keeps going up; and why student debt increases in lockstep.

It was a mixed day for the Canadian preferred share market, with PerpetualDiscounts gaining 6bp, FixedResets off 3bp and DeemedRetractibles up 22bp. Volatility was muted. Volume was above average.

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	-0.3276 %	2,411.6
FixedFloater	4.60 %	3.86 %	27,733	17.67	1	-0.2894 %	3,692.4
Floater	3.00 %	3.16 %	54,779	19.25	4	-0.3276 %	2,603.9
OpRet	4.63 %	-0.16 %	72,287	0.24	3	-0.3080 %	2,683.9
SplitShare	4.84 %	4.58 %	54,100	4.34	5	0.1925 %	3,057.7
Interest-Bearing	0.00 %	0.00 %	0	0.00	0	-0.3080 %	2,454.1
Perpetual-Premium	5.63 %	-0.75 %	93,262	0.08	11	0.1175 %	2,352.2
Perpetual-Discount	5.48 %	5.56 %	136,953	14.39	26	0.0570 %	2,418.9
FixedReset	4.71 %	3.54 %	230,173	6.79	77	-0.0274 %	2,504.3
Deemed-Retractible	5.06 %	2.19 %	166,953	0.22	42	0.2234 %	2,463.2
FloatingReset	2.58 %	2.55 %	189,224	7.12	5	0.0803 %	2,444.3

Performance Highlights
Issue	Index	Change	Notes
GWO.PR.N	FixedReset	-1.14 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.65 Bid-YTW : 4.62 %
CIU.PR.C	FixedReset	1.65 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-06 Maturity Price : 21.31 Evaluated at bid price : 21.61 Bid-YTW : 3.54 %

Volume Highlights
Issue	Index	Shares Traded	Notes
BAM.PR.X	FixedReset	158,484	RBC crossed 148,300 at 21.45. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-06 Maturity Price : 21.47 Evaluated at bid price : 21.47 Bid-YTW : 4.30 %
BMO.PR.R	FloatingReset	138,360	Scotia crossed 136,600 at 24.80. YTW SCENARIO Maturity Type : Call Maturity Date : 2018-08-25 Maturity Price : 25.00 Evaluated at bid price : 24.83 Bid-YTW : 2.54 %
TRP.PR.C	FixedReset	127,195	Desjardins bought 100,000 from RBC at 22.20, and crossed 12,700 at the same price. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-06 Maturity Price : 21.73 Evaluated at bid price : 22.20 Bid-YTW : 3.69 %
TD.PR.E	FixedReset	102,385	RBC crossed blocks of 68,100 and 24,700, both at 25.31. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-30 Maturity Price : 25.00 Evaluated at bid price : 25.32 Bid-YTW : 1.48 %
MFC.PR.C	Deemed-Retractible	90,695	Nesbitt crossed blocks of 40,000 and 45,000, both at 21.70. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.71 Bid-YTW : 6.19 %
BMO.PR.P	FixedReset	80,424	Nesbitt crossed blocks of 25,000 and 50,000, both at 26.00. YTW SCENARIO Maturity Type : Call Maturity Date : 2015-02-25 Maturity Price : 25.00 Evaluated at bid price : 25.92 Bid-YTW : 1.74 %
There were 41 other index-included issues trading in excess of 10,000 shares.

Wide Spread Highlights
Issue	Index	Quote Data and Yield Notes
GWO.PR.N	FixedReset	Quote: 21.65 – 21.88 Spot Rate : 0.2300 Average : 0.1590 YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.65 Bid-YTW : 4.62 %
RY.PR.X	FixedReset	Quote: 25.50 – 25.68 Spot Rate : 0.1800 Average : 0.1095 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-08-24 Maturity Price : 25.00 Evaluated at bid price : 25.50 Bid-YTW : 2.40 %
BAM.PR.P	FixedReset	Quote: 25.87 – 26.06 Spot Rate : 0.1900 Average : 0.1220 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-09-30 Maturity Price : 25.00 Evaluated at bid price : 25.87 Bid-YTW : 3.06 %
POW.PR.B	Perpetual-Discount	Quote: 24.05 – 24.25 Spot Rate : 0.2000 Average : 0.1341 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-06 Maturity Price : 23.74 Evaluated at bid price : 24.05 Bid-YTW : 5.64 %
CIU.PR.A	Perpetual-Discount	Quote: 21.52 – 21.90 Spot Rate : 0.3800 Average : 0.3202 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-06 Maturity Price : 21.52 Evaluated at bid price : 21.52 Bid-YTW : 5.38 %
BNA.PR.D	SplitShare	Quote: 25.22 – 25.39 Spot Rate : 0.1700 Average : 0.1104 YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2014-07-09 Maturity Price : 25.00 Evaluated at bid price : 25.22 Bid-YTW : 4.58 %

There is confusion at the Bank of England:

The Bank of England suspended a member of staff as it conducts a probe into allegations that officials condoned practices behind the currency-manipulation scandal.

While the BOE said it has found no evidence to date of collusion, it requires staff “to follow rigorous internal control processes and has today suspended a member of staff, pending investigation.” No decision has been taken on disciplinary action against any employees, it said.

Bloomberg News reported on Feb. 7 that senior currency dealers at banks including Citigroup Inc. and UBS AG told BOE officials at an April 2012 meeting that they discussed positions ahead of key benchmarks and matched buyers and sellers ahead of the fix to avoid trading then. Central bank representatives said they viewed the practices as positive to reduce market volatility and banks should formulate their own policies, according to three people with knowledge of the matter.

The Bank of Canada claims our economy’s not getting any worse:

In Canada, economic growth in the fourth quarter of 2013 was slightly stronger than the Bank anticipated, and upward revisions earlier in the year further raised the level of GDP. The Bank still expects underlying growth of around 2 1/2 per cent in 2014, with the current quarter likely to be softer. Exports have been a little stronger than previously thought but continue to underperform, and overall business investment has yet to pick up. Meanwhile, recent data support the Bank’s expectation of a soft landing in the housing market and stabilizing debt-to-income ratios for households.

On the whole, the fundamental drivers of growth and inflation in Canada continue to strengthen gradually, as anticipated. With inflation expected to be well below target for some time, the downside risks to inflation remain important. At the same time, the risks associated with elevated household imbalances have not materially changed. The Bank judges that the balance of risks remains within the zone for which the current stance of monetary policy is appropriate and therefore has decided to maintain the target for the overnight rate at 1 per cent. The timing and direction of the next change to the policy rate will depend on how new information influences this balance of risks.

If there’s one thing welfare bums hate, it’s answering questions:

Chrysler Group LLC walked away from talks with the federal and Ontario governments after they asked how much of its proposed $3.6-billion investment would be spent in Ontario – a request that was likely to draw out negotiations and delay the company’s effort to bring a new minivan to market.

The federal government and the province sent Chrysler a joint letter and term sheets that offered to put up money as a percentage of the investment the company would be spending in Ontario, a source with knowledge of the talks said.

But those terms didn’t appear to sit well with Chrysler chief executive officer Sergio Marchionne.

It was a modestly positive day for the Canadian preferred shares market, with PerpetualDiscounts up 4bp, FixedResets gaining 1bp and DeemedRetractibles winning 5bp. Volatility was very low. Volume was average.

PerpetualDiscounts now yield 5.53%, equivalent to 7.19% interest at the standard equivalency factor of 1.3x. Long corporates now yield about 4.5%, so the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) is now about 270bp, unchanged from the February 26 report.

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	0.4579 %	2,419.6
FixedFloater	4.58 %	3.85 %	27,855	17.70	1	1.0234 %	3,703.2
Floater	2.99 %	3.14 %	54,653	19.31	4	0.4579 %	2,612.5
OpRet	4.62 %	-0.66 %	67,889	0.24	3	0.0257 %	2,692.2
SplitShare	4.85 %	4.54 %	54,288	4.34	5	0.0482 %	3,051.9
Interest-Bearing	0.00 %	0.00 %	0	0.00	0	0.0257 %	2,461.7
Perpetual-Premium	5.63 %	-0.94 %	94,015	0.09	12	0.0230 %	2,349.4
Perpetual-Discount	5.49 %	5.53 %	137,568	14.57	26	0.0352 %	2,417.5
FixedReset	4.71 %	3.53 %	229,591	6.80	77	0.0084 %	2,505.0
Deemed-Retractible	5.08 %	3.28 %	167,171	0.39	42	0.0484 %	2,457.8
FloatingReset	2.59 %	2.58 %	192,174	7.13	5	0.0402 %	2,442.3

Performance Highlights
Issue	Index	Change	Notes
BAM.PR.G	FixedFloater	1.02 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-05 Maturity Price : 21.46 Evaluated at bid price : 20.73 Bid-YTW : 3.85 %

Volume Highlights
Issue	Index	Shares Traded	Notes
TD.PR.G	FixedReset	193,168	Nesbitt crossed 100,000 at 25.31; RBC crossed 50,000 and TD crossed 35,000 at the same price. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-30 Maturity Price : 25.00 Evaluated at bid price : 25.31 Bid-YTW : 1.72 %
BNS.PR.Z	FixedReset	89,977	TD crossed 75,000 at 23.80. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.76 Bid-YTW : 3.96 %
TD.PR.E	FixedReset	82,735	RBC crossed 50,000 at 25.31; Scotia crossed 32,000 at the same price. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-30 Maturity Price : 25.00 Evaluated at bid price : 25.33 Bid-YTW : 1.20 %
BNS.PR.Y	FixedReset	80,616	TD crossed 75,000 at 23.85. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.77 Bid-YTW : 3.60 %
TRP.PR.D	FixedReset	67,153	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-05 Maturity Price : 23.14 Evaluated at bid price : 24.98 Bid-YTW : 3.91 %
MFC.PR.L	FixedReset	63,750	recent new issue. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.30 Bid-YTW : 4.19 %
There were 33 other index-included issues trading in excess of 10,000 shares.

Wide Spread Highlights
Issue	Index	Quote Data and Yield Notes
TD.PR.Q	Deemed-Retractible	Quote: 26.21 – 26.48 Spot Rate : 0.2700 Average : 0.1561 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-04 Maturity Price : 25.75 Evaluated at bid price : 26.21 Bid-YTW : -10.11 %
MFC.PR.A	OpRet	Quote: 25.53 – 25.74 Spot Rate : 0.2100 Average : 0.1274 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-06-19 Maturity Price : 25.25 Evaluated at bid price : 25.53 Bid-YTW : -0.29 %
PWF.PR.A	Floater	Quote: 19.70 – 20.15 Spot Rate : 0.4500 Average : 0.3889 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-05 Maturity Price : 19.70 Evaluated at bid price : 19.70 Bid-YTW : 2.68 %
ELF.PR.H	Perpetual-Discount	Quote: 24.00 – 24.20 Spot Rate : 0.2000 Average : 0.1399 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-05 Maturity Price : 23.62 Evaluated at bid price : 24.00 Bid-YTW : 5.80 %
CU.PR.C	FixedReset	Quote: 25.43 – 25.70 Spot Rate : 0.2700 Average : 0.2100 YTW SCENARIO Maturity Type : Call Maturity Date : 2017-06-01 Maturity Price : 25.00 Evaluated at bid price : 25.43 Bid-YTW : 3.46 %
CGI.PR.D	SplitShare	Quote: 24.67 – 24.99 Spot Rate : 0.3200 Average : 0.2671 YTW SCENARIO Maturity Type : Soft Maturity Maturity Date : 2023-06-14 Maturity Price : 25.00 Evaluated at bid price : 24.67 Bid-YTW : 3.93 %

There’s a bit of a move forward with the Danish question:

Denmark’s biggest mortgage bank said about a fifth of covered bonds in the nation’s $550 billion market can be excluded from the top liquidity status, opening up for compromise in talks with Europe.

Nykredit Realkredit A/S said it would be willing to back down from earlier industry demands that all covered bonds be given the top liquidity designation as the Danish government talks with other European Union member states in an effort to reach an agreement.
…
The comments mark the first time industry representatives have shown willingness to accept a compromise after condemning a proposal last year by the European Banking Authority to give all covered bonds second-class liquidity status. Denmark is home to the world’s biggest mortgage-backed covered bond market per capita and its banks use the securities to meet more than 70 percent of their liquidity needs.

The London-based EBA, which is made up of European regulatory heads, published a recommendation in December that would cap banks’ covered bond usage at 40 percent and force lenders to book the bonds at only 85 percent of their market value. It also said all government bonds should get the highest liquidity status, including debt sold by bailed out nations like Greece.
…
An empirical study by the EBA last year found that covered bonds sold in issues of 500 million euros ($689 million) or more in principle have the characteristics needed to have an “extremely high liquidity and credit quality.”

Danish covered bonds were last discussed on February 7.

Some welfare bums are whimpering that there’s not enough swill in the trough:

Chrysler Group LLC is withdrawing its request for funding from the federal and Ontario governments, but says it could begin making new investments for a new minivan assembly line at its Windsor, Ont. factory.

The auto giant had asked for some $700-million in public funds to expand its operations in the province, most crucially at a minivan plant in Windsor. Chrysler had been willing to sink $3.6-billion into Windsor and Brampton, Ont.

But the company has now walked away from that request.

“It is clear to us that our projects were being used as a political football, a process that, in our view apart from being unnecessary and ill-advised, will ultimately not benefit Chrysler,” the company said in a statement.

Some pension plans are getting smarter:

Canada has seen its first major deal for a company to outsource its pension plan risk by buying about $500-million worth of annuities from an insurer.

Pension consulting firm Towers Watson revealed the transaction Tuesday, saying Canada’s first “jumbo” pension annuity deal occurred in the fourth quarter of 2013 and involved a Towers Watson client firm.
…
While many U.S. and U.K. companies have been structuring deals for years to shift the risk of their pension obligations to a third-party insurer, the trend has been slow to come to Canada. But Towers Watson said 2013 was a record-breaking year for group annuity purchases by companies, suggesting deals may be picking up speed as firms look for ways to shift pension risk off their books.

A total of $2.2-billion in group annuities were sold in Canada last year – including $1.3-billion in the fourth quarter alone – an increase from $1.05-billion in all of 2012.

Here’s a recent paper of interest by Ranadeb Chaudhuri, Zoran Ivkovich, Joshua Matthew Pollet and Charles Trzcinka :

Several hundred individuals who hold a Ph.D. in economics, finance, or others fields work for institutional money management companies. The gross performance of domestic equity investment products managed by individuals with a Ph.D. (Ph.D. products) is superior to the performance of non-Ph.D. products matched by objective, size, and past performance for one-year returns, Sharpe Ratios, alphas, information ratios, and the manipulation-proof measure MPPM. Fees for Ph.D. products are lower than those for non-Ph.D. products. Investment flows to Ph.D. products substantially exceed the flows to the matched non-Ph.D. products. Ph.D.s’ publications in leading economics and finance journals further enhance the performance gap.
…
The existing literature has explored some aspects of the link between managerial talent and both ability and education in the context of money management. For instance, Chevalier and Ellison (1999) find that mutual fund performance is related to certain educational characteristics of mutual fund managers. In particular, mutual fund managers graduating from undergraduate institutions with higher average SAT scores achieve higher raw fund returns. Similarly, Chevalier and Ellison (1999) also find that raw fund returns achieved by managers with an MBA outperform those without an MBA by 63 basis points per year. However, upon adjustments for risk, only the differential in risk-adjusted performance between the managers graduating from undergraduate institutions with higher average SAT scores and those graduating from undergraduate institutions with lower average SAT scores persists, whereas the risk-adjusted performance differential between funds managed by MBAs and non-MBAs disappears.

It may well be that PhDs and ‘institutions with higher average SAT scores’ both correlate well with ‘not a salesman’. I would be interested to get data based on field of specialization, but it’s not there yet – and isn’t likely to be, as long as business school profs have specializations in finance, economics and other mumbo-jumbo.

It was a mixed day for the Canadian preferred share market, with PerpetualDiscounts up 26bp, FixedResets off 13bp and DeemedRetractibles gaining 14bp. Volatility was average. Volume was on the high side of average.

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	0.1290 %	2,408.5
FixedFloater	4.63 %	3.90 %	27,830	17.62	1	1.5339 %	3,665.6
Floater	3.01 %	3.15 %	54,712	19.28	4	0.1290 %	2,600.6
OpRet	4.62 %	-0.66 %	68,557	0.24	3	0.0128 %	2,691.5
SplitShare	4.86 %	4.51 %	55,168	4.35	5	0.0562 %	3,050.4
Interest-Bearing	0.00 %	0.00 %	0	0.00	0	0.0128 %	2,461.1
Perpetual-Premium	5.63 %	-1.45 %	94,870	0.09	12	0.0987 %	2,348.9
Perpetual-Discount	5.49 %	5.58 %	138,932	14.46	26	0.2573 %	2,416.7
FixedReset	4.71 %	3.54 %	223,656	6.80	77	-0.1266 %	2,504.8
Deemed-Retractible	5.08 %	3.59 %	163,983	0.96	42	0.1366 %	2,456.6
FloatingReset	2.59 %	2.59 %	199,161	7.13	5	0.0161 %	2,441.3

Performance Highlights
Issue	Index	Change	Notes
ENB.PR.B	FixedReset	-1.58 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-04 Maturity Price : 23.07 Evaluated at bid price : 24.29 Bid-YTW : 4.07 %
BAM.PF.C	Perpetual-Discount	1.06 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-04 Maturity Price : 20.88 Evaluated at bid price : 20.88 Bid-YTW : 5.92 %
PWF.PR.L	Perpetual-Discount	1.10 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-04 Maturity Price : 23.35 Evaluated at bid price : 23.85 Bid-YTW : 5.39 %
BAM.PR.G	FixedFloater	1.53 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-04 Maturity Price : 21.35 Evaluated at bid price : 20.52 Bid-YTW : 3.90 %

Volume Highlights
Issue	Index	Shares Traded	Notes
TRP.PR.E	FixedReset	149,196	Scotia crossed 25,500 at 25.08. Nesbitt crossed a block of 50,000 shares and two of 25,000, all at the same price. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-04 Maturity Price : 23.15 Evaluated at bid price : 25.08 Bid-YTW : 3.95 %
CM.PR.G	Perpetual-Premium	148,626	Nesbitt crossed 100,000 at 25.33. RBC crossed 30,000 at 25.34. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-05-01 Maturity Price : 25.00 Evaluated at bid price : 25.40 Bid-YTW : -1.45 %
CM.PR.E	Perpetual-Premium	107,141	Nesbitt crossed 100,000 at 25.40. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-03 Maturity Price : 25.00 Evaluated at bid price : 25.35 Bid-YTW : -5.16 %
RY.PR.T	FixedReset	77,776	Desjardins crossed 75,000 at 25.49. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-08-24 Maturity Price : 25.00 Evaluated at bid price : 25.48 Bid-YTW : 2.54 %
BNS.PR.A	FloatingReset	73,300	Desjardins crossed 50,000 at 25.15. YTW SCENARIO Maturity Type : Call Maturity Date : 2018-04-25 Maturity Price : 25.00 Evaluated at bid price : 25.17 Bid-YTW : 2.64 %
SLF.PR.A	Deemed-Retractible	66,916	TD crossed 50,000 at 22.60. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.64 Bid-YTW : 5.93 %
There were 38 other index-included issues trading in excess of 10,000 shares.

Wide Spread Highlights
Issue	Index	Quote Data and Yield Notes
CU.PR.D	Perpetual-Discount	Quote: 23.25 – 23.60 Spot Rate : 0.3500 Average : 0.2423 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-04 Maturity Price : 22.95 Evaluated at bid price : 23.25 Bid-YTW : 5.29 %
GWO.PR.I	Deemed-Retractible	Quote: 21.62 – 21.89 Spot Rate : 0.2700 Average : 0.1808 YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.62 Bid-YTW : 6.21 %
TRP.PR.D	FixedReset	Quote: 24.90 – 25.10 Spot Rate : 0.2000 Average : 0.1241 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-04 Maturity Price : 23.12 Evaluated at bid price : 24.90 Bid-YTW : 3.93 %
GWO.PR.M	Deemed-Retractible	Quote: 25.50 – 25.73 Spot Rate : 0.2300 Average : 0.1751 YTW SCENARIO Maturity Type : Call Maturity Date : 2018-03-31 Maturity Price : 25.25 Evaluated at bid price : 25.50 Bid-YTW : 5.38 %
TD.PR.P	Deemed-Retractible	Quote: 26.03 – 26.15 Spot Rate : 0.1200 Average : 0.0735 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-03 Maturity Price : 25.75 Evaluated at bid price : 26.03 Bid-YTW : -2.83 %
CU.PR.E	Perpetual-Discount	Quote: 23.19 – 23.44 Spot Rate : 0.2500 Average : 0.2064 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-04 Maturity Price : 22.89 Evaluated at bid price : 23.19 Bid-YTW : 5.30 %

This is interesting – a zero-cost brokerage:

How does Robinhood make money?

Robinhood will offer margin trading as well as API access, which will allow partnered developers to build applications in conjunction with Robinhood. Robinhood will also receive remuneration for providing trade volume in certain markets. In the future, we plan to offer premium services for active investors.

Robinhood is venture-funded by Google, Andreessen Horowitz and many others, which affords us the freedom to focus on building a wonderful brokerage experience rather than short-term profits.

So presumably they’re selling the order flow to an agglomerater, which will then fill the market orders just inside the market – most of the time – before routing the excess to the public markets – or even another agglomerater, for all I know. Cool.

TARP is showing the usual bureaucratic mission creep:

In Flint, once a thriving auto-industry hub, excavators with long metal arms and shovels have begun tearing down 1,500 dilapidated homes in an attempt to lift the housing market.

The demolitions in this Michigan city of about 100,000 people are part of the stepped up efforts by officials in several Midwestern states to rid their blighted neighborhoods of decayed housing that’s depressing prices. The funding for the excavator work comes from a surprising source — the Hardest Hit Fund of the Troubled Asset Relief Program, or TARP, created in 2008 to stabilize to the financial system.

The $7.6 billion Hardest Hit Fund was intended to help troubled property owners avoid foreclosure and keep their homes. As foreclosures fall in most parts of the country, the fund is using the unspent $3.2 billion to remedy the crisis of abandoned homes. In Detroit alone, 70,000 dwellings, or about 19 percent of the total, may need to be torn down, according to the city.

The Globe had an interesting story on a DDoS attack:

Social networking website Meetup.com is fighting a sustained battle against cyberattackers who are demanding only $300 to call off a campaign that has kept the site offline for much of the past four days.
…
A Meetup blog said that the company was a victim of a distributed denial of service (DDOS) campaign, a type of attack that knocks websites offline by overwhelming them with incoming traffic. It said that no personal data, including credit card information, had been accessed.

A web search brought up news of the record-holding DDoS attack:

A squabble between a group fighting spam and a Dutch company that hosts Web sites said to be sending spam has escalated into one of the largest computer attacks on the Internet, causing widespread congestion and jamming crucial infrastructure around the world.
…
The attacks were first mentioned publicly last week by CloudFlare, an Internet security firm in Silicon Valley that was trying to defend against the attacks and as a result became a target.
…
The so-called distributed denial of service, or DDoS, attacks have reached previously unknown magnitudes, growing to a data stream of 300 billion bits per second.

… and further interrogation of Mr. Google found a description of CloudFlare advanced DDoS protection with a description of how these attacks work:

Below you will find detailed information on these attacks and how the CloudFlare network protects against them:

• •Layer 3/4 attacks
• •DNS amplification attacks
• •SMURF attacks
• •ACK attacks
• •Layer 7 attacks
• •Making DoS a thing of the past

… which I found enthralling.

The Conference Board of Canada is having another kick at Milkfare:

Canada’s dairy industry faces a grim future of stagnant sales, dwindling farms and lost opportunity if the country remains a bystander to a global boom in milk products trade, the Conference Board of Canada argues in a new study.

But it doesn’t have to play out this way, the think tank concludes. Trade can both save the family farm and lift the overall economy, according to a chapter released Monday from a major new examination of the 1970s-era supply management regime.

The Canadian economy would gain $1.2-billion a year and as many as 8,000 new dairy jobs if the industry was freed to pursue rapidly expanding dairy markets in Asia and Africa, the report says.

It was another positive day for the Canadian preferred share market, with PerpetualDiscounts gaining 1bp, FixedResets up 2bp and DeemedRetractibles winning 14bp. Volatility was low. Overall volume was average, despite some good sized blocks at the top of the charts.

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	-0.6407 %	2,405.4
FixedFloater	4.70 %	4.29 %	27,972	17.78	1	0.0495 %	3,610.3
Floater	3.01 %	3.15 %	56,624	19.29	4	-0.6407 %	2,597.2
OpRet	4.62 %	-0.55 %	68,993	0.25	3	-0.1026 %	2,691.1
SplitShare	4.86 %	4.73 %	55,930	4.35	5	0.0080 %	3,048.7
Interest-Bearing	0.00 %	0.00 %	0	0.00	0	-0.1026 %	2,460.8
Perpetual-Premium	5.64 %	0.11 %	95,958	0.08	12	0.1317 %	2,346.5
Perpetual-Discount	5.50 %	5.60 %	140,226	14.44	26	0.0118 %	2,410.5
FixedReset	4.71 %	3.55 %	225,781	6.80	77	0.0200 %	2,508.0
Deemed-Retractible	5.09 %	3.53 %	165,005	0.96	42	0.1416 %	2,453.2
FloatingReset	2.59 %	2.58 %	202,229	7.13	5	0.0563 %	2,440.9

Performance Highlights
Issue	Index	Change	Notes
BAM.PR.K	Floater	-1.07 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-03 Maturity Price : 16.70 Evaluated at bid price : 16.70 Bid-YTW : 3.17 %
GWO.PR.N	FixedReset	1.15 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.00 Bid-YTW : 4.43 %

Volume Highlights
Issue	Index	Shares Traded	Notes
RY.PR.I	FixedReset	156,575	Scotia crossed 60,000 at 25.05; TD crossed 90,000 at 25.12. YTW SCENARIO Maturity Type : Call Maturity Date : 2019-02-24 Maturity Price : 25.00 Evaluated at bid price : 25.10 Bid-YTW : 3.46 %
PWF.PR.T	FixedReset	156,200	TD crossed blocks of 123,000 and 25,000, both at 25.85. YTW SCENARIO Maturity Type : Call Maturity Date : 2019-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.81 Bid-YTW : 3.70 %
ENB.PR.J	FixedReset	129,732	RBC crossed 99,200 at 25.04; TD crossed 14,000 at 25.07. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-03 Maturity Price : 23.18 Evaluated at bid price : 25.05 Bid-YTW : 4.13 %
POW.PR.C	Perpetual-Premium	125,170	TD crossed 122,700 at 25.30. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-02 Maturity Price : 25.00 Evaluated at bid price : 25.32 Bid-YTW : -0.69 %
BNS.PR.B	FloatingReset	104,775	Scotia crossed 50,000 at 24.80; Desjardins sold two blocks to anonymous, of 25,600 and 12,000, both at 24.80. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.83 Bid-YTW : 2.60 %
TD.PR.G	FixedReset	104,671	Nesbitt crossed 100,000 at 25.30. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-30 Maturity Price : 25.00 Evaluated at bid price : 25.28 Bid-YTW : 2.41 %
BNS.PR.T	FixedReset	103,288	Nesbitt crossed 100,000 at 25.31. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-25 Maturity Price : 25.00 Evaluated at bid price : 25.29 Bid-YTW : 1.78 %
TD.PR.E	FixedReset	103,200	Nesbitt crossed 100,000 at 25.30. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-30 Maturity Price : 25.00 Evaluated at bid price : 25.28 Bid-YTW : 2.41 %
BNS.PR.X	FixedReset	102,318	Nesbitt crossed 100,000 at 25.31. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-25 Maturity Price : 25.00 Evaluated at bid price : 25.30 Bid-YTW : 1.50 %
RY.PR.F	Deemed-Retractible	100,215	TD crossed 90,000 at 25.57. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-05-24 Maturity Price : 25.50 Evaluated at bid price : 25.60 Bid-YTW : 2.99 %
There were 26 other index-included issues trading in excess of 10,000 shares.

Wide Spread Highlights
Issue	Index	Quote Data and Yield Notes
PWF.PR.A	Floater	Quote: 19.51 – 19.95 Spot Rate : 0.4400 Average : 0.3131 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-03 Maturity Price : 19.51 Evaluated at bid price : 19.51 Bid-YTW : 2.70 %
IFC.PR.A	FixedReset	Quote: 24.58 – 24.98 Spot Rate : 0.4000 Average : 0.2905 YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.58 Bid-YTW : 3.96 %
TRP.PR.A	FixedReset	Quote: 23.21 – 23.50 Spot Rate : 0.2900 Average : 0.1959 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-03 Maturity Price : 22.63 Evaluated at bid price : 23.21 Bid-YTW : 3.80 %
PWF.PR.O	Perpetual-Premium	Quote: 25.40 – 25.69 Spot Rate : 0.2900 Average : 0.2101 YTW SCENARIO Maturity Type : Call Maturity Date : 2018-10-31 Maturity Price : 25.00 Evaluated at bid price : 25.40 Bid-YTW : 5.57 %
CIU.PR.C	FixedReset	Quote: 21.10 – 21.68 Spot Rate : 0.5800 Average : 0.5009 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-03-03 Maturity Price : 21.10 Evaluated at bid price : 21.10 Bid-YTW : 3.65 %
IAG.PR.G	FixedReset	Quote: 25.80 – 26.00 Spot Rate : 0.2000 Average : 0.1264 YTW SCENARIO Maturity Type : Call Maturity Date : 2017-06-30 Maturity Price : 25.00 Evaluated at bid price : 25.80 Bid-YTW : 3.19 %

Nothing happened today.

It was another positive day for the Canadian preferred share market, with PerpetualDiscounts winning 17bp, FixedResets gaining 10bp and DeemedRetractibles up 13bp. Volatility was merely average, but the Performance Highlights table is comprised entirely of winners, all but one of them a FixedReset. Volume was average, but the highlights were uniformly FixedResets.

And that’s it for another month!

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	0.1854 %	2,421.0
FixedFloater	4.70 %	4.29 %	28,018	17.78	1	0.4975 %	3,608.5
Floater	2.99 %	3.13 %	54,629	19.35	4	0.1854 %	2,614.0
OpRet	4.62 %	-3.73 %	68,580	0.08	3	0.0513 %	2,693.9
SplitShare	4.86 %	4.67 %	56,760	4.36	5	-0.0401 %	3,048.4
Interest-Bearing	0.00 %	0.00 %	0	0.00	0	0.0513 %	2,463.3
Perpetual-Premium	5.65 %	0.01 %	96,504	0.08	12	-0.0049 %	2,343.4
Perpetual-Discount	5.50 %	5.58 %	137,896	14.47	26	0.1718 %	2,410.2
FixedReset	4.71 %	3.62 %	221,125	4.50	77	0.0994 %	2,507.5
Deemed-Retractible	5.09 %	3.58 %	168,499	0.97	42	0.1311 %	2,449.7
FloatingReset	2.64 %	2.62 %	149,780	7.13	6	0.0603 %	2,439.6

Performance Highlights
Issue	Index	Change	Notes
IFC.PR.C	FixedReset	1.08 %	YTW SCENARIO Maturity Type : Call Maturity Date : 2016-09-30 Maturity Price : 25.00 Evaluated at bid price : 26.13 Bid-YTW : 2.67 %
PWF.PR.A	Floater	1.14 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-02-28 Maturity Price : 19.50 Evaluated at bid price : 19.50 Bid-YTW : 2.70 %
IFC.PR.A	FixedReset	1.15 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.58 Bid-YTW : 4.01 %
SLF.PR.G	FixedReset	1.62 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.64 Bid-YTW : 4.34 %

Volume Highlights
Issue	Index	Shares Traded	Notes
MFC.PR.L	FixedReset	411,138	Recent new issue. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.35 Bid-YTW : 4.21 %
BNS.PR.Z	FixedReset	77,877	RBC crossed 28,200 at 23.93; Desjardins bought 30,000 from anonymous at the same price. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.93 Bid-YTW : 3.91 %
IAG.PR.G	FixedReset	69,643	Scotia crossed 40,000 at 25.75. YTW SCENARIO Maturity Type : Call Maturity Date : 2017-06-30 Maturity Price : 25.00 Evaluated at bid price : 25.73 Bid-YTW : 3.27 %
TD.PR.E	FixedReset	52,979	TD crossed 50,000 at 25.29. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-30 Maturity Price : 25.00 Evaluated at bid price : 25.29 Bid-YTW : 2.05 %
ENB.PR.J	FixedReset	38,389	TD bought 10,900 from RBC at 25.09 and crossed 13,600 at the same price. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-02-28 Maturity Price : 23.18 Evaluated at bid price : 25.06 Bid-YTW : 4.19 %
RY.PR.Z	FixedReset	37,161	Recent new issue. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-02-28 Maturity Price : 23.25 Evaluated at bid price : 25.32 Bid-YTW : 3.78 %
There were 33 other index-included issues trading in excess of 10,000 shares.

Wide Spread Highlights
Issue	Index	Quote Data and Yield Notes
BAM.PR.G	FixedFloater	Quote: 20.20 – 20.77 Spot Rate : 0.5700 Average : 0.4367 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-02-28 Maturity Price : 25.00 Evaluated at bid price : 20.20 Bid-YTW : 4.29 %
BAM.PR.J	OpRet	Quote: 26.47 – 26.79 Spot Rate : 0.3200 Average : 0.1986 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-03-31 Maturity Price : 26.00 Evaluated at bid price : 26.47 Bid-YTW : -6.04 %
CIU.PR.C	FixedReset	Quote: 21.13 – 21.66 Spot Rate : 0.5300 Average : 0.4142 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-02-28 Maturity Price : 21.13 Evaluated at bid price : 21.13 Bid-YTW : 3.74 %
GWO.PR.N	FixedReset	Quote: 21.75 – 22.25 Spot Rate : 0.5000 Average : 0.3972 YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.75 Bid-YTW : 4.64 %
VNR.PR.A	FixedReset	Quote: 25.30 – 25.55 Spot Rate : 0.2500 Average : 0.1680 YTW SCENARIO Maturity Type : Call Maturity Date : 2017-10-15 Maturity Price : 25.00 Evaluated at bid price : 25.30 Bid-YTW : 4.17 %
BNS.PR.L	Deemed-Retractible	Quote: 25.68 – 25.91 Spot Rate : 0.2300 Average : 0.1638 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-26 Maturity Price : 25.50 Evaluated at bid price : 25.68 Bid-YTW : 1.97 %