Category: Market Action

More evidence that the EU should be insisting on a Greek referendum, not forbidding one:

The world’s leading financiers are betting they can prevent bankruptcy in Greece with a bailout deal that will force strict austerity on its citizens, but that plan does not account for stubborn people like Olga Katimertzis.

The 58-year-old has served as a deputy mayor in the Athens suburb of Nea Ionia for more than three decades, and she embodies the way this country has started to fight itself. Wearing an old leather jacket in her chilly office, and chain-smoking cigarettes, she proudly describes how her municipality is offering free legal advice to anybody who refuses to pay new taxes imposed by the central government. Her offices are even organizing human barricades to prevent the electrical utility from disconnecting people who fall behind on their bills.

The MF Global receivership is heating up a little:

MF Global Inc.’s shortfall in U.S. segregated customer accounts may exceed $1.2 billion, more than double what was previously expected, said the trustee overseeing a liquidation of the failed brokerage run by former New Jersey Governor Jon Corzine.

That would mean customer accounts are missing about 22 percent of their total of $5.4 billion. A shortfall of 11 percent had been previously estimated by a person with knowledge of probes into the firm’s collapse. James Giddens, the trustee, said today that forensic accountants and investigators are working “around the clock,” and the estimate may change.
…
The CFTC and the Securities and Exchange Commission are also investigating cash movements at the firm before the bankruptcy filing. Regulators haven’t located the money.

The estimated amount of the shortfall has fluctuated. Examiners from CME Group Inc., the world’s largest futures exchange, found unexplained wire transfers at MF Global Inc. and a $900 million shortfall in client funds during the weekend the failing broker was talking with possible buyers, a person briefed on the matter said.

I’m still having a hard time taking this seriously. The first thing a liquidator does after being appointed by regulators is vilify ex-management – this not only makes him a hero when he announces he’s got all the money, but keeps him on good terms with the regulator who appointed him, so he’ll be in line for the next appointment as well. I note that the phrases “unexplained wire transfers” and “$900 million shortfall” are indeed in the same sentence in the quoted report, but are not directly connected. Ah, well, we will see!

The US is still not serious about deficit reduction:

A special debt-reduction committee in the U.S. Congress failed to reach agreement, extending partisan gridlock into the 2012 election year and setting the stage for $1.2 trillion in automatic spending cuts.

President Barack Obama blamed Republicans, saying in remarks at the White House they “refused to listen to the voices of reason and compromise.” The president said he would veto any move to avoid the automatic spending cuts that are supposed to start in 2013 as a result of panel’s failure.

Committee co-chairmen Representative Jeb Hensarling of Texas, a Republican, and Senator Patty Murray of Washington, a Democrat, said in an e-mailed statement that “after months of hard work and intense deliberations, we have come to the conclusion today that it will not be possible to make any bipartisan agreement available to the public before the committee’s deadline.”

As we’ve seen in Europe (and as we saw in Canada in 1994) nobody takes deficit reduction seriously until the market starts giving them major problems.

The Star had a good article on milkfare on Sunday, with a link to a restaurant industry website advocating reform, which contained a further link to a Facebook page advocating reform. The comments on the page are dominated by milkfare recipients and their fellow travellers – which only makes sense, considering that the benefits to the few are charged to the many – but I’m engaged in an interesting debate on one of the posts, anyway. Eventually, I hope, all participants on that thread will agree to the rough equation:

Canadian Milk Price = Free Market Price + Cost of Quota + Unearned Rents

… which, since they will insist that Unearned Rents = 0, will resolve to

Canadian Milk Price = Free Market Price + Cost of Quota

at which point maybe we can start getting somewhere. Milkfare was an appalling policy blunder which has only gotten worse since inception: it’s time for the politicians to ‘fess up to the fact that it ain’t working and move to a free market with compensation to farmers for loss of quota value.

Spread the word! What is really needed is a non-partisan campaign during the next election, urging all voters to ask the candidates what they will do to end milkfare. If Ontario gets eightteen more urban seats in the coming redistribution, that can only help the effort!

Wow, man … Cooler-ado is a happenin’ place, you know?:

There are currently 16 states that allow some form of legalized medical marijuana, Bloomberg Businessweek reports in its Nov. 21 edition. Only Colorado allows marijuana businesses to operate as such. It’s the first, and for the moment, only, for-profit marijuana marketplace in the U.S.

Predictably, Colorado is in the midst of a marijuana boom. From 2000, when Colorado voters legalized marijuana for medicinal purposes with Amendment 20, to 2008, Colorado issued roughly 2,000 medical marijuana cards to patients living in the state. By 2011 that number had jumped to over 127,000 paying customers, according to the Colorado Medical Marijuana Registry, and at least 25,000 more have applications pending.

Assiduous Reader BG sends me an interesting article titled Will WiFi Kill Us All, which discusses the long-term health risks associated with heavy exposure to cell ‘phones and WiFi electromagnetic radiation. I don’t buy it myself – I think the author has just experienced a placebo effect – but who knows? Something is behind the explosion in autism, peanut allergies, senile dementia (which may just be because we’re living longer, I don’t know) and alien abductions, but we don’t know what. I subscribe to the “soup theory” myself – simply that we now live in an environment where there’s lots of interesting chemicals and influences which have never existed before. A one-in-a-million chance is pretty minor, but if you take a million of ’em, you’re likely to get burnt.

DBRS confirmed TDS.PR.C at Pfd-2(low).

Today’s report is being made with Yahoo! prices because TMX DataLinx has colly-wobbles again.

It was a down day for the Canadian preferred share market, with PerpetualDiscounts down 1bp, FixedResets off 9bp and DeemedRetractibles losing 12bp. All entries on the Performance Highlights table were losers. Volume was light.

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	-0.3215 %	2,124.2
FixedFloater	4.94 %	4.67 %	29,925	17.05	1	-2.5316 %	3,122.6
Floater	3.39 %	3.41 %	155,025	18.69	2	-0.3215 %	2,293.6
OpRet	4.97 %	3.54 %	51,412	1.48	7	-0.5801 %	2,475.1
SplitShare	5.80 %	6.42 %	57,363	5.17	3	-0.3376 %	2,528.5
Interest-Bearing	0.00 %	0.00 %	0	0.00	0	-0.5801 %	2,263.2
Perpetual-Premium	5.57 %	0.45 %	101,347	0.13	13	-0.0854 %	2,155.7
Perpetual-Discount	5.30 %	5.30 %	102,115	14.76	17	-0.0072 %	2,298.9
FixedReset	5.10 %	2.96 %	225,125	2.48	63	-0.0929 %	2,349.0
Deemed-Retractible	5.04 %	4.37 %	207,206	3.87	46	-0.1230 %	2,220.3

Performance Highlights
Issue	Index	Change	Notes
BAM.PR.G	FixedFloater	-2.53 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-21 Maturity Price : 25.00 Evaluated at bid price : 19.25 Bid-YTW : 4.67 %
BAM.PR.I	OpRet	-1.52 %	YTW SCENARIO Maturity Type : Call Maturity Date : 2012-06-30 Maturity Price : 25.00 Evaluated at bid price : 25.27 Bid-YTW : 5.04 %
GWO.PR.M	Deemed-Retractible	-1.18 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 26.00 Bid-YTW : 5.43 %
HSB.PR.C	Deemed-Retractible	-1.10 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.27 Bid-YTW : 5.09 %
PWF.PR.L	Perpetual-Discount	-1.04 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-21 Maturity Price : 24.21 Evaluated at bid price : 24.67 Bid-YTW : 5.19 %
BAM.PR.O	OpRet	-1.03 %	YTW SCENARIO Maturity Type : Option Certainty Maturity Date : 2013-06-30 Maturity Price : 25.00 Evaluated at bid price : 25.82 Bid-YTW : 3.37 %
CU.PR.C	FixedReset	-1.02 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-21 Maturity Price : 23.24 Evaluated at bid price : 25.34 Bid-YTW : 3.63 %

Volume Highlights
Issue	Index	Shares Traded	Notes
BNS.PR.R	FixedReset	46,926	Nesbitt crossed 43,000 at 26.15. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-01-26 Maturity Price : 25.00 Evaluated at bid price : 26.05 Bid-YTW : 3.14 %
SLF.PR.I	FixedReset	39,650	Recent new issue. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-12-31 Maturity Price : 25.00 Evaluated at bid price : 24.50 Bid-YTW : 4.44 %
TD.PR.G	FixedReset	35,875	RBC crossed 23,000 at 27.25. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-30 Maturity Price : 25.00 Evaluated at bid price : 27.24 Bid-YTW : 2.59 %
BNS.PR.P	FixedReset	35,609	Desjardins crossed 10,000 at 25.79; TD crossed 10,000 at 25.75. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-04-25 Maturity Price : 25.00 Evaluated at bid price : 25.74 Bid-YTW : 3.07 %
RY.PR.B	Deemed-Retractible	32,561	TD crossed 25,000 at 25.40. YTW SCENARIO Maturity Type : Call Maturity Date : 2015-08-24 Maturity Price : 25.00 Evaluated at bid price : 25.35 Bid-YTW : 4.31 %
TD.PR.K	FixedReset	29,275	Nesbitt crossed 25,000 at 27.49. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-31 Maturity Price : 25.00 Evaluated at bid price : 27.43 Bid-YTW : 2.64 %
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.E	Perpetual-Discount	Quote: 25.22 – 25.85 Spot Rate : 0.6300 Average : 0.3988 YTW SCENARIO Maturity Type : Call Maturity Date : 2013-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.22 Bid-YTW : 5.02 %
SLF.PR.H	FixedReset	Quote: 23.90 – 24.40 Spot Rate : 0.5000 Average : 0.2913 YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.90 Bid-YTW : 4.22 %
CM.PR.K	FixedReset	Quote: 26.70 – 27.20 Spot Rate : 0.5000 Average : 0.3124 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-31 Maturity Price : 25.00 Evaluated at bid price : 26.70 Bid-YTW : 2.85 %
TCA.PR.Y	Perpetual-Premium	Quote: 52.64 – 53.28 Spot Rate : 0.6400 Average : 0.4776 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-03-05 Maturity Price : 50.00 Evaluated at bid price : 52.64 Bid-YTW : 3.34 %
IAG.PR.F	Deemed-Retractible	Quote: 25.86 – 26.40 Spot Rate : 0.5400 Average : 0.3857 YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.86 Bid-YTW : 5.60 %
BAM.PR.I	OpRet	Quote: 25.27 – 25.75 Spot Rate : 0.4800 Average : 0.3392 YTW SCENARIO Maturity Type : Call Maturity Date : 2012-06-30 Maturity Price : 25.00 Evaluated at bid price : 25.27 Bid-YTW : 5.04 %

There has been an interesting paper published by John (Xuefeng) Jiang, Mary Harris Stanford and Yuan Xie titled Does it Matter Who Pays for Bond Ratings? Historical Evidence:

We test whether Standard and Poor’s (S&P) assigns higher bond ratings after it switches from investor-pay to issuer-pay fees in 1974. Using Moody’s rating for the same bond as a benchmark, we find that when S&P charges investors and Moody’s charges issuers, S&P’s ratings are lower than Moody’s. Once S&P adopts issuer-pay, its ratings increase and no longer differ from Moody’s. More importantly, S&P only assigns higher ratings for bonds that are subject to greater conflicts of interest, measured by higher expected rating fees or lower credit quality. These findings suggest that the issuer-pay model leads to higher ratings.

It was a mildly good day for the Canadian preferred share market, with PerpetualDiscounts up 2bp, FixedResets gaining 4bp and DeemedRetractibles winning 10bp. There were only four entries on the Performance Highlights table, but they were all winners. Volume was extremely low.

HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly
Index	Mean Current Yield (at bid)	Median YTW	Median Average Trading Value	Median Mod Dur (YTW)	Issues	Day’s Perf.	Index Value
Ratchet	0.00 %	0.00 %	0	0.00	0	-0.0643 %	2,131.1
FixedFloater	4.81 %	4.52 %	28,695	17.25	1	0.0000 %	3,203.7
Floater	3.38 %	3.39 %	156,508	18.72	2	-0.0643 %	2,301.0
OpRet	4.94 %	1.98 %	51,820	1.49	7	0.0493 %	2,489.5
SplitShare	5.78 %	6.33 %	55,707	5.18	3	0.6955 %	2,537.1
Interest-Bearing	0.00 %	0.00 %	0	0.00	0	0.0493 %	2,276.4
Perpetual-Premium	5.57 %	-0.61 %	102,124	0.13	13	0.0225 %	2,157.6
Perpetual-Discount	5.30 %	5.31 %	101,968	14.77	17	0.0169 %	2,299.1
FixedReset	5.10 %	2.96 %	225,466	2.49	63	0.0375 %	2,351.1
Deemed-Retractible	5.03 %	4.40 %	206,159	3.65	46	0.1035 %	2,223.0

Performance Highlights
Issue	Index	Change	Notes
ELF.PR.F	Perpetual-Discount	1.05 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-18 Maturity Price : 22.80 Evaluated at bid price : 23.09 Bid-YTW : 5.80 %
HSB.PR.C	Deemed-Retractible	1.11 %	YTW SCENARIO Maturity Type : Call Maturity Date : 2013-06-30 Maturity Price : 25.25 Evaluated at bid price : 25.55 Bid-YTW : 4.75 %
BNA.PR.C	SplitShare	1.17 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2019-01-10 Maturity Price : 25.00 Evaluated at bid price : 21.59 Bid-YTW : 6.79 %
SLF.PR.E	Deemed-Retractible	1.42 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.46 Bid-YTW : 6.54 %

Volume Highlights
Issue	Index	Shares Traded	Notes
SLF.PR.I	FixedReset	54,750	Recent new issue. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-12-31 Maturity Price : 25.00 Evaluated at bid price : 24.63 Bid-YTW : 4.39 %
RY.PR.R	FixedReset	53,400	Scotia crossed 50,000 at 27.00. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-02-24 Maturity Price : 25.00 Evaluated at bid price : 27.00 Bid-YTW : 2.57 %
ENB.PR.B	FixedReset	40,059	RBC crossed 12,000 at 25.40. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-18 Maturity Price : 23.26 Evaluated at bid price : 25.40 Bid-YTW : 3.68 %
CM.PR.E	Perpetual-Discount	32,876	TD crossed 10,000 at 25.05. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-18 Maturity Price : 24.73 Evaluated at bid price : 25.04 Bid-YTW : 5.63 %
CM.PR.G	Perpetual-Discount	32,725	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-18 Maturity Price : 24.52 Evaluated at bid price : 24.85 Bid-YTW : 5.47 %
RY.PR.Y	FixedReset	31,621	Scotia crossed 25,000 at 27.40. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-11-24 Maturity Price : 25.00 Evaluated at bid price : 27.45 Bid-YTW : 2.68 %
There were 15 other index-included issues trading in excess of 10,000 shares.

Wide Spread Highlights
Issue	Index	Quote Data and Yield Notes
BMO.PR.P	FixedReset	Quote: 26.87 – 27.18 Spot Rate : 0.3100 Average : 0.1843 YTW SCENARIO Maturity Type : Call Maturity Date : 2015-02-25 Maturity Price : 25.00 Evaluated at bid price : 26.87 Bid-YTW : 2.97 %
BAM.PR.K	Floater	Quote: 15.50 – 15.94 Spot Rate : 0.4400 Average : 0.3345 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-18 Maturity Price : 15.50 Evaluated at bid price : 15.50 Bid-YTW : 3.42 %
ELF.PR.F	Perpetual-Discount	Quote: 23.09 – 23.43 Spot Rate : 0.3400 Average : 0.2540 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-18 Maturity Price : 22.80 Evaluated at bid price : 23.09 Bid-YTW : 5.80 %
POW.PR.D	Perpetual-Discount	Quote: 24.70 – 24.97 Spot Rate : 0.2700 Average : 0.1849 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-18 Maturity Price : 24.40 Evaluated at bid price : 24.70 Bid-YTW : 5.11 %
IAG.PR.F	Deemed-Retractible	Quote: 26.05 – 26.35 Spot Rate : 0.3000 Average : 0.2164 YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 26.05 Bid-YTW : 5.50 %
FTS.PR.G	FixedReset	Quote: 25.70 – 25.97 Spot Rate : 0.2700 Average : 0.2111 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-18 Maturity Price : 23.88 Evaluated at bid price : 25.70 Bid-YTW : 3.44 %

Another synthetic ETF has closed:

Scotia Managed Companies Administration Inc. is pleased to announce that Moneda LatAm Corporate Bond Fund (the “Fund”) has completed an initial public offering (the “Offering”) of 4,559,824 Class A Units and 440,890 Class U Units (collectively, the “Units”) of the Fund at a price of Cdn.$10.00 per Class A Unit and U.S.$10.00 per Class U Unit for gross proceeds of Cdn.$45,598,240 and U.S.$4,408,900, respectively. The Class A Units of the Fund are listed and posted for trading on the Toronto Stock Exchange under the symbol “MLD.UN.” The Class U Units will not be listed on a stock exchange but may be converted into Class A Units on a weekly basis for liquidity purposes.

The Fund is a closed-end investment fund established as a trust under the laws of the Province of Ontario. The Fund has been established to provide holders of Units (the ‘‘Unitholders’’) with investment exposure to a diversified portfolio of fixed income securities of companies located in, or with significant operations in, Latin America, primarily denominated in U.S. dollars. The Fund’s investment objectives are to: (i) preserve and enhance the net asset value of the Fund; and (ii) provide Unitholders with quarterly tax-advantaged distributions consisting primarily of returns of capital, in each case through exposure to the total return performance of the Moneda Deuda Latinoamericana Fondo de Inversion, a U.S.$856 million (as at June 30, 2011) Chilean listed investment fund established in 2000 which is actively managed by Moneda S.A. Administradora de Fondos de Inversion (the “Portfolio Manager”). Moneda Asset Management S.A., the parent company of the Portfolio Manager, was established in 1993 and is a leading independent asset manager headquartered in Santiago, Chile.

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	1.2691 %	2,132.4
FixedFloater	4.81 %	4.52 %	29,108	17.25	1	-1.2994 %	3,203.7
Floater	3.37 %	3.38 %	157,770	18.75	2	1.2691 %	2,302.5
OpRet	4.94 %	0.71 %	52,656	1.49	7	-0.1531 %	2,488.3
SplitShare	5.74 %	6.37 %	55,862	5.12	3	0.0838 %	2,519.6
Interest-Bearing	0.00 %	0.00 %	0	0.00	0	-0.1531 %	2,275.3
Perpetual-Premium	5.57 %	-0.81 %	102,833	0.13	13	-0.1542 %	2,157.1
Perpetual-Discount	5.30 %	5.32 %	102,763	14.81	17	0.0894 %	2,298.7
FixedReset	5.10 %	2.93 %	228,313	2.49	63	-0.0599 %	2,350.3
Deemed-Retractible	5.03 %	4.39 %	208,359	3.79	46	-0.1485 %	2,220.7

Performance Highlights
Issue	Index	Change	Notes
BAM.PR.J	OpRet	-1.44 %	YTW SCENARIO Maturity Type : Call Maturity Date : 2014-03-31 Maturity Price : 26.00 Evaluated at bid price : 27.36 Bid-YTW : 3.21 %
GWO.PR.N	FixedReset	-1.41 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.50 Bid-YTW : 3.43 %
IAG.PR.F	Deemed-Retractible	-1.34 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.85 Bid-YTW : 5.60 %
BAM.PR.G	FixedFloater	-1.30 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-17 Maturity Price : 25.00 Evaluated at bid price : 19.75 Bid-YTW : 4.52 %
GWO.PR.G	Deemed-Retractible	-1.00 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.69 Bid-YTW : 5.48 %
BAM.PR.N	Perpetual-Discount	1.13 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-17 Maturity Price : 22.81 Evaluated at bid price : 23.21 Bid-YTW : 5.17 %
BAM.PR.K	Floater	1.58 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-17 Maturity Price : 15.47 Evaluated at bid price : 15.47 Bid-YTW : 3.42 %

Volume Highlights
Issue	Index	Shares Traded	Notes
TRP.PR.C	FixedReset	204,511	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-17 Maturity Price : 23.45 Evaluated at bid price : 25.73 Bid-YTW : 2.96 %
BNS.PR.N	Deemed-Retractible	97,325	YTW SCENARIO Maturity Type : Call Maturity Date : 2013-01-29 Maturity Price : 26.00 Evaluated at bid price : 26.35 Bid-YTW : 4.10 %
MFC.PR.B	Deemed-Retractible	60,962	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.19 Bid-YTW : 6.13 %
MFC.PR.C	Deemed-Retractible	54,511	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.31 Bid-YTW : 6.48 %
CM.PR.K	FixedReset	49,503	YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-31 Maturity Price : 25.00 Evaluated at bid price : 26.71 Bid-YTW : 2.82 %
RY.PR.E	Deemed-Retractible	45,442	YTW SCENARIO Maturity Type : Call Maturity Date : 2016-02-24 Maturity Price : 25.00 Evaluated at bid price : 25.06 Bid-YTW : 4.44 %
There were 21 other index-included issues trading in excess of 10,000 shares.

Wide Spread Highlights
Issue	Index	Quote Data and Yield Notes
BAM.PR.J	OpRet	Quote: 27.36 – 27.90 Spot Rate : 0.5400 Average : 0.3962 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-03-31 Maturity Price : 26.00 Evaluated at bid price : 27.36 Bid-YTW : 3.21 %
HSE.PR.A	FixedReset	Quote: 25.79 – 26.18 Spot Rate : 0.3900 Average : 0.2539 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-17 Maturity Price : 23.45 Evaluated at bid price : 25.79 Bid-YTW : 3.15 %
SLF.PR.E	Deemed-Retractible	Quote: 21.16 – 21.53 Spot Rate : 0.3700 Average : 0.2416 YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.16 Bid-YTW : 6.72 %
IAG.PR.C	FixedReset	Quote: 26.51 – 26.88 Spot Rate : 0.3700 Average : 0.2480 YTW SCENARIO Maturity Type : Call Maturity Date : 2013-12-31 Maturity Price : 25.00 Evaluated at bid price : 26.51 Bid-YTW : 3.64 %
BAM.PR.X	FixedReset	Quote: 24.51 – 24.90 Spot Rate : 0.3900 Average : 0.2734 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-17 Maturity Price : 22.95 Evaluated at bid price : 24.51 Bid-YTW : 3.58 %
RY.PR.N	FixedReset	Quote: 26.94 – 27.29 Spot Rate : 0.3500 Average : 0.2411 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-02-24 Maturity Price : 25.00 Evaluated at bid price : 26.94 Bid-YTW : 2.67 %

Sorry about the lateness, folks! My schedule on the 16th and 17th is a little peculiar.

PerpetualDiscounts now yield 5.23%, equivalent to 6.80% interest at the standard equivalency factor of 1.3x. Long corporates now yield about 4.75%, so the pre-tax interest-equivalent spread (also called the Seniority Spread) is now about 205bp.

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	-0.9029 %	2,105.7
FixedFloater	4.75 %	4.14 %	28,858	17.09	1	1.8321 %	3,245.9
Floater	3.42 %	3.42 %	159,118	18.67	2	-0.9029 %	2,273.6
OpRet	4.93 %	0.88 %	53,414	1.50	7	0.0985 %	2,492.1
SplitShare	5.75 %	6.45 %	56,114	5.12	3	0.1399 %	2,517.5
Interest-Bearing	0.00 %	0.00 %	0	0.00	0	0.0985 %	2,278.8
Perpetual-Premium	5.56 %	-0.13 %	101,607	0.15	13	0.0929 %	2,160.4
Perpetual-Discount	5.31 %	5.23 %	106,560	14.81	17	0.0072 %	2,296.6
FixedReset	5.10 %	2.91 %	234,537	2.49	63	0.1326 %	2,351.7
Deemed-Retractible	5.03 %	4.38 %	205,648	3.66	46	0.0774 %	2,224.0

Performance Highlights
Issue	Index	Change	Notes
BAM.PR.K	Floater	-1.49 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-16 Maturity Price : 15.23 Evaluated at bid price : 15.23 Bid-YTW : 3.48 %
BAM.PR.N	Perpetual-Discount	-1.08 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-16 Maturity Price : 22.60 Evaluated at bid price : 22.95 Bid-YTW : 5.23 %
BAM.PR.G	FixedFloater	1.83 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-16 Maturity Price : 21.37 Evaluated at bid price : 20.01 Bid-YTW : 4.14 %

Volume Highlights
Issue	Index	Shares Traded	Notes
ENB.PR.B	FixedReset	291,585	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-16 Maturity Price : 23.26 Evaluated at bid price : 25.42 Bid-YTW : 3.68 %
RY.PR.I	FixedReset	100,400	YTW SCENARIO Maturity Type : Call Maturity Date : 2014-02-24 Maturity Price : 25.00 Evaluated at bid price : 26.20 Bid-YTW : 2.77 %
FTS.PR.C	OpRet	76,712	YTW SCENARIO Maturity Type : Call Maturity Date : 2011-12-16 Maturity Price : 25.50 Evaluated at bid price : 25.87 Bid-YTW : -14.33 %
FTS.PR.E	OpRet	69,304	YTW SCENARIO Maturity Type : Call Maturity Date : 2013-06-01 Maturity Price : 25.75 Evaluated at bid price : 27.23 Bid-YTW : 0.88 %
RY.PR.H	Deemed-Retractible	67,654	YTW SCENARIO Maturity Type : Call Maturity Date : 2013-05-24 Maturity Price : 26.00 Evaluated at bid price : 26.75 Bid-YTW : 3.40 %
TD.PR.G	FixedReset	66,150	YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-30 Maturity Price : 25.00 Evaluated at bid price : 27.31 Bid-YTW : 2.46 %
There were 27 other index-included issues trading in excess of 10,000 shares.

Wide Spread Highlights
Issue	Index	Quote Data and Yield Notes
BAM.PR.K	Floater	Quote: 15.23 – 15.69 Spot Rate : 0.4600 Average : 0.2835 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-16 Maturity Price : 15.23 Evaluated at bid price : 15.23 Bid-YTW : 3.48 %
ELF.PR.G	Perpetual-Discount	Quote: 20.92 – 21.46 Spot Rate : 0.5400 Average : 0.3857 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-16 Maturity Price : 20.92 Evaluated at bid price : 20.92 Bid-YTW : 5.75 %
TCA.PR.Y	Perpetual-Premium	Quote: 52.65 – 53.14 Spot Rate : 0.4900 Average : 0.3533 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-03-05 Maturity Price : 50.00 Evaluated at bid price : 52.65 Bid-YTW : 3.31 %
BAM.PR.N	Perpetual-Discount	Quote: 22.95 – 23.29 Spot Rate : 0.3400 Average : 0.2390 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-16 Maturity Price : 22.60 Evaluated at bid price : 22.95 Bid-YTW : 5.23 %
BAM.PR.H	OpRet	Quote: 25.31 – 25.69 Spot Rate : 0.3800 Average : 0.2884 YTW SCENARIO Maturity Type : Call Maturity Date : 2011-12-16 Maturity Price : 25.00 Evaluated at bid price : 25.31 Bid-YTW : -0.34 %
FTS.PR.H	FixedReset	Quote: 25.41 – 25.58 Spot Rate : 0.1700 Average : 0.1179 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-16 Maturity Price : 23.44 Evaluated at bid price : 25.41 Bid-YTW : 2.86 %

There was lots of fun with European bonds today:

German two-year rates dropped below 0.3 percent for the first time, while the extra yield investors demand to hold 10- year bonds from France, Belgium, Spain and Austria instead of bunds all climbed to euro-era records. Italy’s 10-year yield rose above 7 percent as prime minister-in-waiting Mario Monti wrapped up talks on forming a new government. Spain and Belgium sold less than the maximum target of bills at auctions today as financing costs increased.

Italy’s 10-year yield climbed 37 basis points, or 0.37 percentage point, to 7.07 percent at 5 p.m. in London. It rose to a euro-era record 7.48 percent on Nov. 9. The 4.75 percent bond due September 2021 slid 2.285, or 22.85 euros per 1,000- euro face amount ($1,351), to 84.57.

The spread investors demand to hold 10-year French debt instead of German bunds widened 26 basis points, the most since the euro started in 1999, based on closing-market rates, to 190 basis points. It touched 191 basis points, also the most since the common currency was introduced. The yield on the 10-year bund fell one basis point to 1.77 percent, less than half France’s 3.67 percent rate.

Meanwhile, here’s a little colour to support my support for a Greek referendum:

One of the biggest uncertainties for Greek-Canadian business owners has been the disruption brought on by a series of strikes. Panagiotis Tsiriotakis imports olive oil from his family’s land in Crete, bottles it and sells it to Canadian retailers. He notes that every day, a different group goes on strike in Greece, from trucking to customs to the ports. “Then the ships don’t even go into port to collect it,” he said. “Nothing is stable right now.”

What used to take a few weeks to cross the oceans can now be up to two months. Inventories in his Toronto warehouse have dwindled and he’s worried he won’t be able to keep up with demand.

The travel business is also seeing disruptions. Aris Sideratos, founder and owner of Skyway Tours Ltd. in Toronto’s Greektown, said that demand for vacation packages in Greece has slid 30 per cent from last year and that some non-Greek tourists have avoided the country because they’re afraid of strikes and riots.

It will be just lovely if the Greek government organizes acceptance of the bail-out funds. But will the Greek populace be willing to aquiesce to the terms of repayment?

Sino-Forest got some good news:

The committee said in an interim report that it obtained information from Chinese forestry bureaus verifying 77 percent of Sino-Forest’s reported timber assets. It also said it confirmed the Mississauga, Ontario- and Hong Kong-based company’s cash balance.

While Sino-Forest has been suspended from trading since August, shares of its Greenheart Group Ltd. unit soared 93 percent yesterday in Hong Kong after publication of the report. Sino-Forest’s 10.25 percent bonds, which mature in 2014, gained 24.75 cents on the dollar to 62 cents as of 4:30 p.m. in Toronto yesterday, according to Trace, the bond price reporting system of the Financial Industry Regulatory. The 6.25 percent bonds due October 2017 rose as much as 27.45 cents to 60 cents.

Richard Fisher of the Dallas Fed made an important speech titled Taming the Too-Big-to-Fails: Will Dodd–Frank Be the Ticket or Is Lap-Band Surgery Required? (With Reference to Vinny Guadagnino, Andrew Haldane, Paul Volcker, John Milton, Tom Hoenig and Churchill’s ‘Terminological Inexactitude’) (clearly, Mr. Fisher takes great pleasure in titling his speeches):

return to Andrew Haldane of the Bank of England. Haldane makes an intriguing parallel between the financial system and epidemiological networks. Conventional capital requirements seek to equalize failure probabilities across institutions to a certain threshold, say 0.1 percent. But using a systemwide approach would result in a different calibration, if the objective were to set a firm’s capital requirements equal to the marginal cost of its failure to the system as a whole. Regulatory capital requirements would then be higher for banks posing the greatest risk to the system, which is what Dodd–Frank proposes, and what the current Basel III requirements are also considering.

To Haldane, this is a new approach in banking, but not in epidemiology where “focusing preventive action on ‘super-spreaders’ within the network to limit the potential for systemwide spread” is the norm. As Haldane emphasizes, “If anything, this same logic applies with even greater force in banking.”[17] To me, treating too-big-to-fail institutions as potential “super-spreaders” of financial germs has a great deal of appeal.
…
Yet, in my view, there is only one fail-safe way to deal with too big to fail. I believe that too-big-to-fail banks are too-dangerous-to-permit.[26] As Mervyn King, head of the Bank of England, once said, “If some banks are thought to be too big to fail, then … they are too big.” I favor an international accord that would break up these institutions into more manageable size. More manageable not only for regulators, but also for the executives of these institutions. For there is scant chance that managers of $1 trillion or $2 trillion banking enterprises can possibly “know their customer,” follow time-honored principles of banking and fashion reliable risk management models for organizations as complex as these megabanks have become.

Am I too radical? I think not. I find myself in good company―Paul Volcker, for example, advocates “reducing their size, curtailing their interconnectedness, or limiting their activities.”[27]

In my view, downsizing the behemoths over time into institutions that can be prudently managed and regulated across borders is the appropriate policy response. Then, creative destruction can work its wonders in the financial sector, just as it does elsewhere in our economy.

We shouldn’t just pay lip service to letting the discipline of the market work. Ideally, we should rely on market forces to work not only in good times, but also in times of difficulties. Ultimately, we should move to end too big to fail and the apparatus of bailouts and do so well before bankers lose their memory of the recent crisis and embark on another round of excessive risk taking. Only then will we have a financial system fit and proper for servicing an economy as dynamic as that of the United States.

Premier Charest stated today that single mums seeking to buy milk for their children are not represented by any government he has anything to do with:

There is now speculation the Canadian government might come under pressure to dismantle the system in negotiations for a trans-Pacific trade zone.

Not so fast, Mr. Charest said Tuesday.

He says supply management has not been on the table during ongoing Canada-European Union trade talks, nor should it be during the upcoming Trans Pacific Partnership negotiations.

He says the place to have a broad conversation about agriculture programs is at the global level, at the World Trade Organization. He said the same applies to other countries’ agriculture subsidies.

“The supply-management system is non-negotiable,” he told reporters, speaking about the trans-Pacific trade talks.
…
Canadians pay two to three times more than world market prices for products like milk, butter, cheese and eggs, according to the Organization for Economic Co-operation and Development.

Let them drink Coke!

I think there must be something going on behind the scenes at Atlantic Power / CPI Preferred Equity with respect to the ratings on CZP.PR.A & CZP.PR.B. The takeover closed two weeks ago, after DBRS had warned of a massive downgrade … and nothing’s happening. Perhaps ATP is frantically trying to put some kind of deal together? We shall see!

It was a mildly downish day for the Canadian preferred share market, with PerpetualDiscounts up 1bp, FixedResets down 7bp and DeemedRetractibles losing 8bp. Volatility was mild. Volume was 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	0.5838 %	2,124.9
FixedFloater	4.83 %	4.55 %	28,819	17.22	1	-0.7576 %	3,187.5
Floater	3.39 %	3.40 %	157,624	18.70	2	0.5838 %	2,294.3
OpRet	4.94 %	2.38 %	53,213	1.50	7	0.3459 %	2,489.7
SplitShare	5.75 %	6.53 %	58,427	5.12	3	-0.0280 %	2,514.0
Interest-Bearing	0.00 %	0.00 %	0	0.00	0	0.3459 %	2,276.6
Perpetual-Premium	5.57 %	-0.12 %	100,600	0.14	13	0.1020 %	2,158.4
Perpetual-Discount	5.31 %	5.21 %	106,687	14.78	17	0.0121 %	2,296.5
FixedReset	5.10 %	2.93 %	222,904	2.50	63	-0.0732 %	2,348.6
Deemed-Retractible	5.03 %	4.40 %	213,798	3.66	46	-0.0764 %	2,222.3

Performance Highlights
Issue	Index	Change	Notes
BAM.PR.N	Perpetual-Discount	-1.53 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-15 Maturity Price : 22.80 Evaluated at bid price : 23.20 Bid-YTW : 5.17 %
BAM.PR.M	Perpetual-Discount	-1.24 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-15 Maturity Price : 22.66 Evaluated at bid price : 23.04 Bid-YTW : 5.21 %
IAG.PR.A	Deemed-Retractible	-1.20 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.04 Bid-YTW : 5.73 %
BAM.PR.O	OpRet	1.44 %	YTW SCENARIO Maturity Type : Option Certainty Maturity Date : 2013-06-30 Maturity Price : 25.00 Evaluated at bid price : 26.00 Bid-YTW : 2.88 %

Volume Highlights
Issue	Index	Shares Traded	Notes
TD.PR.Q	Deemed-Retractible	239,740	Block traders gone wild! Scotia crossed blocks of 50,000 shares, 25,000 and 24,200. RBC crossed 25,000. TD crossed blocks of 50,000 shares, 20,000 and 30,000. All blocks crossed at 26.60. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-01-31 Maturity Price : 26.00 Evaluated at bid price : 26.61 Bid-YTW : 3.58 %
TD.PR.I	FixedReset	109,725	Nesbitt crossed 100,000 at 27.45. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-31 Maturity Price : 25.00 Evaluated at bid price : 27.45 Bid-YTW : 2.60 %
TD.PR.E	FixedReset	84,850	TD crossed blocks of 29,600 and 25,000, both at 27.30; RBC crossed 10,000 at 27.30 and another 10,000 at 27.28. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-30 Maturity Price : 25.00 Evaluated at bid price : 27.28 Bid-YTW : 2.51 %
BNS.PR.N	Deemed-Retractible	77,055	Desjardins crossed 25,000 at 26.37. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-01-29 Maturity Price : 26.00 Evaluated at bid price : 26.36 Bid-YTW : 4.04 %
TD.PR.Y	FixedReset	64,925	Nesbitt crossed 60,000 at 26.30. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-10-31 Maturity Price : 25.00 Evaluated at bid price : 26.20 Bid-YTW : 2.69 %
SLF.PR.I	FixedReset	64,740	Recent new issue. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-12-31 Maturity Price : 25.00 Evaluated at bid price : 24.70 Bid-YTW : 4.36 %
There were 32 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: 25.22 – 25.67 Spot Rate : 0.4500 Average : 0.2909 YTW SCENARIO Maturity Type : Call Maturity Date : 2013-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.22 Bid-YTW : 4.95 %
BMO.PR.M	FixedReset	Quote: 26.07 – 26.42 Spot Rate : 0.3500 Average : 0.2417 YTW SCENARIO Maturity Type : Call Maturity Date : 2013-08-25 Maturity Price : 25.00 Evaluated at bid price : 26.07 Bid-YTW : 2.47 %
HSB.PR.C	Deemed-Retractible	Quote: 25.50 – 25.87 Spot Rate : 0.3700 Average : 0.2670 YTW SCENARIO Maturity Type : Call Maturity Date : 2013-06-30 Maturity Price : 25.25 Evaluated at bid price : 25.50 Bid-YTW : 4.86 %
IAG.PR.A	Deemed-Retractible	Quote: 23.04 – 23.38 Spot Rate : 0.3400 Average : 0.2672 YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.04 Bid-YTW : 5.73 %
BAM.PR.G	FixedFloater	Quote: 19.65 – 20.00 Spot Rate : 0.3500 Average : 0.2784 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-15 Maturity Price : 25.00 Evaluated at bid price : 19.65 Bid-YTW : 4.55 %
BMO.PR.O	FixedReset	Quote: 27.43 – 27.65 Spot Rate : 0.2200 Average : 0.1489 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-05-25 Maturity Price : 25.00 Evaluated at bid price : 27.43 Bid-YTW : 2.44 %

Hungary may become a junk credit:

Hungary’s sovereign credit grade may be cut to junk this month after Standard & Poor’s Ratings Services placed the country’s lowest investment grade on “CreditWatch with negative implications.”

S&P is likely to make a decision this month on Hungary’s credit grade, currently at BBB-, the rating company said in a statement today. Fitch Ratings yesterday cut the outlook on Hungary’s lowest investment grade to negative from stable, joining S&P and Moody’s Investors

Milkfare has cost us yet another trade agreement:

“The [Trans Pacific Partnership] will boost our economies, lowering barriers to trade and investment, increasing exports, and creating more jobs for our people,” U.S. President Barack Obama said in announcing the new framework ahead of the start of the formal APEC leader summit in Hawaii on Saturday.

But that won’t be the case for Canada.

While Canada would like to be part of the Trans Pacific Partnership, it doesn’t agree with the cost of membership, particularly the suggestion that it needs to signal a willingness to abandon supply management policies, International Trade Minister Ed Fast said Saturday.

Yellow Media sold some assets:

Yellow Media Inc. (TSX: YLO) announces that it has sold the assets of LesPAC Inc. to Mediagrif Interactive Technologies Inc. for a purchase price of $72.5 million. The transaction is effective immediately.
…
For the year ended December 31, 2010, LesPAC Inc. reported revenues of $12.7M.

Be nice if they could sell the whole damn company for six times revenue!

According to their credit agreement with the banks:

“Prepayment Trigger Event” means any disposition or dispositions of assets of the Restricted Entities in any fiscal year of the Borrower, the aggregate proceeds for which exceed $25,000,000 during such fiscal year.
…
5.2 Mandatory Prepayments

On each occasion that a Prepayment Trigger Event occurs, the Borrower shall give written notice thereof to the Administrative Agent and shall, contemporaneously with the occurrence of such Prepayment Trigger Event, prepay outstanding credit granted to the Borrower under the Facilities in an amount equal to 100% of the Net Cash Proceeds. Section 2.11 shall be complied with in connection with any such prepayment. Other than any payments required pursuant to Section 2.11, there are no premiums, penalties or other additional payments associated with any mandatory prepayments under this Section 5.2. Amounts which are prepaid as aforesaid shall be applied firstly to the scheduled instalments under the NRT Facility (including the instalment due and payable on the Maturity Date) in inverse order of maturity and secondly to the Revolving Facility. In each case, any amounts which are prepaid as aforesaid may not be reborrowed.

It was a solid day for the Canadian preferred share market, with PerpetualDiscounts gaining 6bp, FixedResets up 10bp and DeemedRetractibles winning 15bp. Volatility was good. Volume was light, despite a few issues showing some big trades.

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	-0.1942 %	2,112.6
FixedFloater	4.80 %	4.50 %	26,674	17.28	1	0.0000 %	3,211.9
Floater	3.41 %	3.43 %	155,419	18.64	2	-0.1942 %	2,281.0
OpRet	4.96 %	3.10 %	55,121	1.50	7	0.1650 %	2,481.1
SplitShare	5.75 %	6.57 %	58,442	5.12	3	0.1401 %	2,514.7
Interest-Bearing	0.00 %	0.00 %	0	0.00	0	0.1650 %	2,268.7
Perpetual-Premium	5.57 %	1.83 %	101,622	0.15	13	0.0780 %	2,156.2
Perpetual-Discount	5.31 %	5.32 %	107,732	14.78	17	0.0556 %	2,296.2
FixedReset	5.10 %	2.90 %	221,015	2.50	63	0.0963 %	2,350.3
Deemed-Retractible	5.03 %	4.34 %	201,217	3.45	46	0.1461 %	2,224.0

Performance Highlights
Issue	Index	Change	Notes
ENB.PR.A	Perpetual-Premium	-1.17 %	YTW SCENARIO Maturity Type : Call Maturity Date : 2011-12-14 Maturity Price : 25.00 Evaluated at bid price : 25.37 Bid-YTW : -14.92 %
POW.PR.D	Perpetual-Discount	1.20 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-14 Maturity Price : 24.25 Evaluated at bid price : 24.55 Bid-YTW : 5.13 %
IAG.PR.A	Deemed-Retractible	1.22 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.32 Bid-YTW : 5.58 %
SLF.PR.H	FixedReset	1.25 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.31 Bid-YTW : 4.22 %
TCA.PR.X	Perpetual-Premium	1.27 %	YTW SCENARIO Maturity Type : Call Maturity Date : 2013-10-15 Maturity Price : 50.00 Evaluated at bid price : 52.66 Bid-YTW : 2.86 %

Volume Highlights
Issue	Index	Shares Traded	Notes
TD.PR.I	FixedReset	351,635	Nesbitt crossed blocks of 200,000 shares, 46,000 and 100,000, all at 27.45. Nice tickets! YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-31 Maturity Price : 25.00 Evaluated at bid price : 27.46 Bid-YTW : 2.58 %
ENB.PR.B	FixedReset	296,965	Scotia sold 11,200 to anonymous at 25.30. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-14 Maturity Price : 23.22 Evaluated at bid price : 25.30 Bid-YTW : 3.70 %
CM.PR.L	FixedReset	199,245	Nesbitt crossed 50,000 and 25,000 at 27.60. RBC crossed blocks of 35,000 and 65,000, both at the same price. TD crossed 20,000 at the same price again. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-30 Maturity Price : 25.00 Evaluated at bid price : 27.47 Bid-YTW : 2.46 %
CM.PR.E	Perpetual-Discount	125,750	RBC crossed 98,500 at 25.05. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-14 Maturity Price : 24.73 Evaluated at bid price : 25.04 Bid-YTW : 5.63 %
TD.PR.A	FixedReset	99,914	RBC crossed 81,000 and 10,000, both at 26.30. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-01-31 Maturity Price : 25.00 Evaluated at bid price : 26.24 Bid-YTW : 2.77 %
CM.PR.G	Perpetual-Discount	90,618	Desjardins crossed 65,000 at 24.92. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-14 Maturity Price : 24.58 Evaluated at bid price : 24.90 Bid-YTW : 5.45 %
There were 18 other index-included issues trading in excess of 10,000 shares.

Wide Spread Highlights
Issue	Index	Quote Data and Yield Notes
BAM.PR.O	OpRet	Quote: 25.63 – 26.09 Spot Rate : 0.4600 Average : 0.3200 YTW SCENARIO Maturity Type : Option Certainty Maturity Date : 2013-06-30 Maturity Price : 25.00 Evaluated at bid price : 25.63 Bid-YTW : 3.81 %
RY.PR.I	FixedReset	Quote: 26.06 – 26.39 Spot Rate : 0.3300 Average : 0.2175 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-02-24 Maturity Price : 25.00 Evaluated at bid price : 26.06 Bid-YTW : 3.02 %
RY.PR.L	FixedReset	Quote: 26.41 – 26.75 Spot Rate : 0.3400 Average : 0.2345 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-02-24 Maturity Price : 25.00 Evaluated at bid price : 26.41 Bid-YTW : 2.97 %
PWF.PR.I	Perpetual-Premium	Quote: 25.47 – 25.79 Spot Rate : 0.3200 Average : 0.2168 YTW SCENARIO Maturity Type : Call Maturity Date : 2011-12-14 Maturity Price : 25.25 Evaluated at bid price : 25.47 Bid-YTW : -1.87 %
TCA.PR.Y	Perpetual-Premium	Quote: 52.64 – 52.96 Spot Rate : 0.3200 Average : 0.2183 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-03-05 Maturity Price : 50.00 Evaluated at bid price : 52.64 Bid-YTW : 3.31 %
CU.PR.B	Perpetual-Premium	Quote: 25.55 – 25.83 Spot Rate : 0.2800 Average : 0.1901 YTW SCENARIO Maturity Type : Call Maturity Date : 2011-12-14 Maturity Price : 25.25 Evaluated at bid price : 25.55 Bid-YTW : -11.47 %

Money funds are drawing back from Europe:

The biggest U.S. prime money-market funds cut their investments in Deutsche Bank AG (DBK) by $8.1 billion in October, the largest drop among 35 of the largest banks in Europe, the U.S., Japan and Canada, Bloomberg analysis shows.

The amount of Deutsche Bank short-term obligations held by the eight biggest U.S. funds eligible to purchase corporate debt, which included offerings from Fidelity Investments, JPMorgan Chase & Co. (JPM) and BlackRock Inc. (BLK), declined by 56 percent to $6.3 billion from Sept. 30 to Oct. 31, according to monthly portfolio updates compiled by Bloomberg and published in today’s Bloomberg Risk newsletter.

Deutsche Bank Chief Financial Officer Stefan Krause said that money funds aren’t a major source of funding on an Oct. 25 earnings call. Krause estimated that the funds provided 3 percent of the bank’s total funding.

Germany’s largest bank said it increased its discretionary unsecured wholesale funding to 135 billion euros from 113 billion euros between the end of June and the end of September, according to a presentation given by Krause at the time.

TMX DataLinx continues to have problems, so today’s report is again based on Yahoo!

It was a fine day for the Canadian preferred share market, with PerpetualDiscounts up 18bp, FixedResets gaining 13bp and DeemedRetractibles winning 20bp. Volatility was muted. Volume was light, although some nice blocks got crossed, particularly by Desjardins.

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	-0.2583 %	2,116.7
FixedFloater	4.80 %	4.50 %	26,267	17.29	1	0.4566 %	3,211.9
Floater	3.40 %	3.43 %	68,928	18.66	2	-0.2583 %	2,285.4
OpRet	4.96 %	3.19 %	54,366	1.51	7	-0.0879 %	2,477.0
SplitShare	5.76 %	6.56 %	59,076	5.13	3	0.0841 %	2,511.1
Interest-Bearing	0.00 %	0.00 %	0	0.00	0	-0.0879 %	2,265.0
Perpetual-Premium	5.58 %	2.53 %	102,751	0.16	13	-0.0930 %	2,154.5
Perpetual-Discount	5.31 %	5.31 %	109,077	14.79	17	0.1792 %	2,294.9
FixedReset	5.10 %	2.88 %	214,432	2.51	63	0.1334 %	2,348.0
Deemed-Retractible	5.03 %	4.37 %	202,776	3.89	46	0.2048 %	2,220.8

Performance Highlights
Issue	Index	Change	Notes
TCA.PR.X	Perpetual-Premium	-1.46 %	YTW SCENARIO Maturity Type : Call Maturity Date : 2013-10-15 Maturity Price : 50.00 Evaluated at bid price : 52.00 Bid-YTW : 3.54 %
BAM.PR.M	Perpetual-Discount	1.91 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-11 Maturity Price : 23.02 Evaluated at bid price : 23.46 Bid-YTW : 5.11 %
IAG.PR.A	Deemed-Retractible	2.13 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.04 Bid-YTW : 5.73 %

Volume Highlights
Issue	Index	Shares Traded	Notes
CM.PR.E	Perpetual-Discount	757,100	Block city! All crosses were at 25.00. Desjardins crossed seven blocks: two of 100,000 each 50,000 15,000 two of 10,000 each 200,000 Nesbitt crossed 50,000 and TD crossed 86,000. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-11 Maturity Price : 24.72 Evaluated at bid price : 25.03 Bid-YTW : 5.63 %
SLF.PR.I	FixedReset	162,992	Recent new issue. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-12-31 Maturity Price : 25.00 Evaluated at bid price : 24.70 Bid-YTW : 4.35 %
TD.PR.R	Deemed-Retractible	152,600	Scotia crossed blocks of 50,000 and 75,000, both at 26.70. TD crossed 25,000 at the same price. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-04-30 Maturity Price : 26.00 Evaluated at bid price : 26.76 Bid-YTW : 3.44 %
BNS.PR.X	FixedReset	138,700	Nesbitt crossed blocks of 85,000 and 50,000, both at 27.25. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-25 Maturity Price : 25.00 Evaluated at bid price : 27.30 Bid-YTW : 2.45 %
TD.PR.E	FixedReset	91,785	RBC crossed blocks of 49,900 and 10,200, both at 27.30; Scotia crossed 23,900 at the same price.YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-30 Maturity Price : 25.00 Evaluated at bid price : 27.31 Bid-YTW : 2.45 %
CM.PR.L	FixedReset	89,500	Nesbitt crossed blocks of 23,300 and 47,400, both at 27.59. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-30 Maturity Price : 25.00 Evaluated at bid price : 27.51 Bid-YTW : 2.38 %
There were 17 other index-included issues trading in excess of 10,000 shares.

Wide Spread Highlights
Issue	Index	Quote Data and Yield Notes
IAG.PR.F	Deemed-Retractible	Quote: 26.00 – 26.90 Spot Rate : 0.9000 Average : 0.5408 YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 26.00 Bid-YTW : 5.51 %
POW.PR.D	Perpetual-Discount	Quote: 24.26 – 24.70 Spot Rate : 0.4400 Average : 0.3182 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-11 Maturity Price : 23.82 Evaluated at bid price : 24.26 Bid-YTW : 5.18 %
IAG.PR.C	FixedReset	Quote: 26.50 – 26.94 Spot Rate : 0.4400 Average : 0.3301 YTW SCENARIO Maturity Type : Call Maturity Date : 2013-12-31 Maturity Price : 25.00 Evaluated at bid price : 26.50 Bid-YTW : 3.63 %
HSE.PR.A	FixedReset	Quote: 25.75 – 26.20 Spot Rate : 0.4500 Average : 0.3421 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-11 Maturity Price : 23.44 Evaluated at bid price : 25.75 Bid-YTW : 3.15 %
TCA.PR.X	Perpetual-Premium	Quote: 52.00 – 52.48 Spot Rate : 0.4800 Average : 0.3755 YTW SCENARIO Maturity Type : Call Maturity Date : 2013-10-15 Maturity Price : 50.00 Evaluated at bid price : 52.00 Bid-YTW : 3.54 %
IAG.PR.A	Deemed-Retractible	Quote: 23.04 – 23.39 Spot Rate : 0.3500 Average : 0.2504 YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.04 Bid-YTW : 5.73 %

Whoopsy! S&P jumped the gun on France:

Standard & Poor’s roiled global equity, bond, currency and commodity markets when it sent and then corrected an erroneous message to subscribers suggesting France’s top credit rating had been downgraded.

The benchmark Stoxx Europe 600 Index extended its decline to 1.5 percent to 234.11 and French 10-year bond yields surged as much as 28 basis points to 3.48 percent, the highest level since July. The euro pared gains and U.S. equities briefly dropped after the mistaken announcement. Commodities erased gains before resuming increases after S&P affirmed France’s AAA rating in a later statement.
…
S&P’s erroneous message was put out at 3:57 p.m. Paris time. The company sent a release at 5:40 p.m. Paris time saying the message was incorrect and affirming France’s rating.

Meanwhile Cameron appears to favour monetization of European debt:

U.K. Prime Minister David Cameron suggested that the European Central Bank should use its resources to underpin the euro-area bailout fund and give it enough capacity to rescue the region’s larger economies.

“If the leaders of the euro zone want to save their currency then they, together with institutions of the euro zone, must act now,” Cameron said in a speech in London today. “The longer the delay, the greater the danger.”
…
Cameron said yesterday Italy’s position is close to being unsustainable, given the rise in bond yields.

“If you don’t have credibility about your plans to deal with your debts and deal with your deficits, whether you like the markets or not, they won’t lend you any money,” Cameron told lawmakers. “That’s what we are seeing in countries like Greece and now tragically in Italy, where the price of borrowing money is getting to a totally unsustainable level.”

Greece finally got a new Prime Minister:

Lucas Papademos, named today to be interim prime minister of Greece, steered the country into the euro region as central bank governor more than a decade ago. Now the former European Central Bank vice president will have to secure the country’s euro membership for a second time.

Papademos, who has never held elected office, helped foster economic growth rates that surpassed Germany’s and France’s in his eight years at Greece’s central bank before moving to the ECB in 2002. Most recently a visiting professor at Harvard University in Cambridge, Massachusetts, and an adviser to departing Prime Minister George Papandreou, Papademos takes over a country weeks from being unable to meet its debt obligations.

The OSC has provided a report on Dialogue 2011, referred to as “an important forum to consult with our stakeholders”, held on November 1.

The Toronto Stock Exchange’s DataLinx service is having problems again, so this report has been prepared using prices from Yahoo!

It was an uneventful day in the Canadian preferred share market, with PerpetualDiscounts up 2bp, FixedResets gaining 5bp and DeemedRetractibles down 5bp. Volatility was good. Volume was 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	-0.2576 %	2,122.1
FixedFloater	4.82 %	4.53 %	26,163	17.26	1	0.1524 %	3,197.3
Floater	3.39 %	3.41 %	159,606	18.70	2	-0.2576 %	2,291.4
OpRet	4.96 %	0.94 %	54,498	1.51	7	-0.1646 %	2,479.2
SplitShare	5.77 %	6.60 %	59,674	5.13	3	0.2953 %	2,509.0
Interest-Bearing	0.00 %	0.00 %	0	0.00	0	-0.1646 %	2,267.0
Perpetual-Premium	5.57 %	2.73 %	103,756	0.15	13	0.0251 %	2,156.5
Perpetual-Discount	5.32 %	5.21 %	108,941	14.73	17	0.0218 %	2,290.8
FixedReset	5.11 %	2.96 %	211,446	2.51	63	0.0542 %	2,344.9
Deemed-Retractible	5.04 %	4.36 %	205,970	3.46	46	-0.0497 %	2,216.2

Performance Highlights
Issue	Index	Change	Notes
MFC.PR.E	FixedReset	-1.33 %	YTW SCENARIO Maturity Type : Call Maturity Date : 2014-09-19 Maturity Price : 25.00 Evaluated at bid price : 25.96 Bid-YTW : 4.49 %
MFC.PR.C	Deemed-Retractible	-1.25 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.25 Bid-YTW : 6.67 %
GWO.PR.G	Deemed-Retractible	-1.21 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.55 Bid-YTW : 5.54 %
BNS.PR.L	Deemed-Retractible	-1.21 %	YTW SCENARIO Maturity Type : Call Maturity Date : 2015-04-28 Maturity Price : 25.25 Evaluated at bid price : 25.39 Bid-YTW : 4.34 %
MFC.PR.B	Deemed-Retractible	-1.16 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.07 Bid-YTW : 6.35 %
CM.PR.P	Deemed-Retractible	1.01 %	YTW SCENARIO Maturity Type : Call Maturity Date : 2012-10-29 Maturity Price : 25.00 Evaluated at bid price : 25.88 Bid-YTW : 1.97 %
BAM.PR.N	Perpetual-Discount	1.30 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-10 Maturity Price : 22.98 Evaluated at bid price : 23.41 Bid-YTW : 5.12 %
GWO.PR.N	FixedReset	1.38 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.90 Bid-YTW : 3.22 %
HSB.PR.C	Deemed-Retractible	1.99 %	YTW SCENARIO Maturity Type : Call Maturity Date : 2013-06-30 Maturity Price : 25.25 Evaluated at bid price : 25.65 Bid-YTW : 4.43 %

Volume Highlights
Issue	Index	Shares Traded	Notes
SLF.PR.I	FixedReset	398,680	New issue settled today. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-12-31 Maturity Price : 25.00 Evaluated at bid price : 24.55 Bid-YTW : 4.41 %
CM.PR.E	Perpetual-Discount	160,844	Nesbitt crossed 100,000 at 25.00; Scotia crossed 25,000 at 24.99. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-10 Maturity Price : 24.69 Evaluated at bid price : 24.99 Bid-YTW : 5.64 %
CM.PR.D	Perpetual-Premium	109,636	Scotia crossed blocks of 25,000 and 19,000, both at 25.32. RBC crossed 49,900 at 25.33. YTW SCENARIO Maturity Type : Call Maturity Date : 2012-04-30 Maturity Price : 25.00 Evaluated at bid price : 25.33 Bid-YTW : 3.21 %
BNS.PR.Z	FixedReset	73,802	Recent secondary offering. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.99 Bid-YTW : 3.18 %
TD.PR.K	FixedReset	59,039	Scotia crossed blocks of 30,00 and 26,500, both at 27.40. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-31 Maturity Price : 25.00 Evaluated at bid price : 27.44 Bid-YTW : 2.60 %
TD.PR.E	FixedReset	54,828	RBC crossed blocks of 24,900 and 25,000, both at 27.30. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-30 Maturity Price : 25.00 Evaluated at bid price : 27.30 Bid-YTW : 2.46 %
There were 32 other index-included issues trading in excess of 10,000 shares.

Wide Spread Highlights
Issue	Index	Quote Data and Yield Notes
BAM.PR.M	Perpetual-Discount	Quote: 23.02 – 23.45 Spot Rate : 0.4300 Average : 0.3218 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-10 Maturity Price : 22.64 Evaluated at bid price : 23.02 Bid-YTW : 5.21 %
BAM.PR.G	FixedFloater	Quote: 19.71 – 19.99 Spot Rate : 0.2800 Average : 0.1992 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-10 Maturity Price : 25.00 Evaluated at bid price : 19.71 Bid-YTW : 4.53 %
RY.PR.F	Deemed-Retractible	Quote: 25.11 – 25.50 Spot Rate : 0.3900 Average : 0.3119 YTW SCENARIO Maturity Type : Call Maturity Date : 2016-05-24 Maturity Price : 25.00 Evaluated at bid price : 25.11 Bid-YTW : 4.32 %
HSE.PR.A	FixedReset	Quote: 25.75 – 26.05 Spot Rate : 0.3000 Average : 0.2238 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-10 Maturity Price : 23.44 Evaluated at bid price : 25.75 Bid-YTW : 3.14 %
CM.PR.M	FixedReset	Quote: 27.36 – 27.82 Spot Rate : 0.4600 Average : 0.3845 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-31 Maturity Price : 25.00 Evaluated at bid price : 27.36 Bid-YTW : 2.96 %
GWO.PR.I	Deemed-Retractible	Quote: 22.56 – 22.87 Spot Rate : 0.3100 Average : 0.2536 YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.56 Bid-YTW : 5.88 %

Oh, those wacky Europeans and their Risk-Weighted Assets!

Banks in Europe are undercutting regulators’ demands that they boost capital by declaring assets they hold less risky today than they were yesterday.

Banco Santander SA (SAN), Spain’s largest lender, and Banco Bilbao Vizcaya Argentaria SA (BBVA), the second-biggest, say they can go halfway to adding 13.6 billion euros ($18.8 billion) of capital by changing how they calculate risk-weightings, the probability of default lenders assign to loans, mortgages and derivatives. The practice, known as “risk-weighted asset optimization,” allows banks to boost capital ratios without cutting lending, selling assets or tapping shareholders.
…
Spanish banks aren’t alone in using the practice. Unione di Banche Italiane SCPA (UBI), Italy’s fourth-biggest bank, said it will change its risk-weighting model instead of turning to investors for the 1.5 billion euros regulators say it needs. Commerzbank AG (CBK), Germany’s second-biggest lender, said it will do the same. Lloyds Banking Group Plc (LLOY), Britain’s biggest mortgage lender, and HSBC Holdings Plc (HSBA), Europe’s largest bank, both said they cut risk-weighted assets by changing the model.
…
The proportion of risk-weighted assets to total assets at European banks is half that of American banks, according to an April 6 Barclays Capital report written by analysts Simon Samuels and Mike Harrison.
…
Sheila Bair, who stepped down as chairman of the Federal Deposit Insurance Corp. in June, has called Europe’s adoption of risk-weighting “naive.”
…
Some regulators, including Bair, have pushed for a leverage ratio that would require lenders to hold a fixed amount of capital against total assets.
…
Banco Santander, based in Madrid, and BBVA in Bilbao said they’re justified in adjusting risk-weightings because Spanish regulators have held them to higher standards than elsewhere.

Spanish banks have an average ratio of risk-weighted assets to total assets of 52 percent compared with 32 percent for U.K. banks, 31 percent for French and Benelux banks and 35 percent for German banks, analysts at Keefe, Bruyette & Woods Inc., wrote in an Oct. 26 report.

DARPA’s looking for hackers:

At the conference, officials of the Defense Advanced Research Projects Agency pleaded with hackers to help them out and said that the agency plans to boost spending as it battles unnamed adversaries in cyberspace.

Regina Dugan, DARPA director, addressed an audience that comprised what the agency called “visionary hackers,” academics and others, according to a Reuters story.

Ms. Dugan contended that the military needs “more and better options” to meet cyber threats to a growing range of industrial and other systems controlled by computers vulnerable to penetration, including cars with advanced computer diagnostic boards. Of concern are brakes, accelerators, steering and other modern car systems that “we need to worry about” because they could be remotely hacked via such diagnostic controls, said another DARPA program manager.
…
DARPA officials said the country is at risk particularly since the playing field is far from level. Layered security defenses have grown increasingly bloated, according to a recent in-house analysis, while attackers operate with lean, mean malware.

The agency’s analysis reports that some security packages are weighing in at an eye-popping 10 million lines of code, while malicious software on average runs on a whip-thin 125 lines.

To combat such threats, DARPA officials called for both an increase in the development of cyber defensive technologies and of offensive weapon systems.

There’ll be some good money for talented kids in that pot! I presume that Canadian federal government programmers need not apply:

The applications that are not “kicked out” of Service Canada’s automated system at the start cannot be fixed on the computer until a 28-day period has passed, even if the errors are reported to agents in the Service Canada processing office.

These applications then need to be processed manually by agents. The agents have an additional 21 days to do the recalculations, but, because their workforce is shrinking, the time frame is often not met and much longer delays of weeks or months are becoming commonplace.

What’s happening in Greece???

Greece’s critical power-sharing talks have hit a significant hurdle, with political leaders leaving a top-level meeting that had been expected to conclude three days of negotiations without naming a new prime minister to take over from George Papandreou.

The president’s office said Wednesday the meeting would reconvene on Thursday morning. It gave no reason. Earlier, Giorgos Karatzaferis, the head of a small right-wing party, had stormed out of the meeting, accusing the heads of the two main parties of using “trickery” but not giving any details.

I’ve already expressed doubts as to whether the population will permit the “paying back” part of the bail-out plan – but will the politicians even get as far as the “taking the money” part? Bloomberg reports:

Negotiations on a government between Papandreou and Samaras dragged on for a third day today as the two sides disagreed on a prime minister and the opposition balked at European Union demands for written commitments to secure a bailout package.

The new government must implement budget measures and decisions related to an Oct. 26 European bailout package that’s worth 130 billion euros ($177 billion), including a debt swap, before holding elections.

Immediately at stake is the fate of an 8 billion-euro loan installment under an earlier aid package, a 110 billion-euro EU- led bailout agreed in May 2010. The tranche must be paid before the middle of December to prevent a collapse of the country’s financial system.

Italy’s not having much fun either:

The euro-region’s defenses are being breached.

Investors today propelled Italy’s 10-year bond yield to close at a euro-era high of 7.25 percent after the promised exit of Prime Minister Silvio Berlusconi failed to convince them that his country can slash Europe’s second-largest debt burden.

This sounds like dealers are setting up for a lousy auction:

Italy may struggle to sell 5 billion euros ($6.8 billion) of Treasury bills tomorrow, after bond yields surged to euro-era records on Prime Minister Silvio Berlusconi’s resignation offer and LCH Clearnet SA demanded more collateral on the country’s bonds.

Italy auctions one-year bills tomorrow at 11:00 a.m. in Rome, followed by a sale of five-year bonds on Nov. 14. The auction comes after the country’s 10-year bond yield jumped 57 basis points to 7.33 percent, crossing the 7 percent threshold that led Greece, Portugal and Ireland to seek bailouts. Italy paid 3.57 percent the last time it sold one-year bills on Oct. 11. Similar maturity debt currently yields about 8.41 percent.

DBRS downgraded Italy a notch:

DBRS Ratings Limited (DBRS) has today downgraded the ratings on the Republic of Italy’s long-term foreign and local currency debt to A (high) from AA (low). The trend on both ratings remains Negative. The downgrade reflects: (1) persistent stress in market funding conditions; (2) fiscal consolidation implementation risks due to economic and political uncertainties; and, (3) structural economic growth challenges.

European difficulties are having effects in the Antipodes:

New Zealand’s central bank deferred plans to tighten bank lending rules as global turmoil increases the risks for the nation’s economy and financial system.

The Reserve Bank will delay an increase in the core funding ratio to 75 percent from 70 percent by about six months to Jan. 1, 2013, according to its Financial Stability Report released in Wellington today. The ratio sets the minimum share of bank loans that must be funded from local deposits or wholesale borrowings of one year or longer.

“Conditions in global funding markets have deteriorated,” the central bank said in the report. “It would have been very difficult to place new longer-term unsecured debt issues over the past three months as the sovereign debt crisis played out.”

The central bank introduced the ratio in July to reduce local banks’ reliance on short-term debt raised overseas, intending to counter the impact of that funding getting frozen.

Jefferson County’s gone bust:

Jefferson County, Alabama, commissioners voted 4-1 to file the largest U.S. municipal bankruptcy after reaching an impasse over concessions with holders of $3.14 billion of bonds.

JPMorgan Chase & Co. (JPM), which arranged most of the debt to fund a sewer renovation, will likely take the biggest loss.

A provisional agreement with creditors that commissioners approved in September included $1.1 billion in concessions and called for sewer-rate increases of as much as 8.2 percent for the first three years. The county was unable to get signed commitments from creditors, Commission PresidentDavid Carrington said today
…
The vote by officials in Alabama’s most populous county occurred about a month after Pennsylvania’s capital of Harrisburg sought court protection citing millions in overdue bond payments tied to a trash-to-energy incinerator. A Jefferson filing would eclipse that of California’s Orange County in 1994.
…
The crisis in Alabama arose when investors dumped Jefferson county’s bonds as the subprime mortgage-market meltdown sent ripples through Wall Street. Jefferson’s floating-rate securities were coupled with interest-rate swaps, a money-saving strategy pitched by banks that backfired. As credit markets convulsed in 2008, the county’s interest costs soared. When banks demanded early payoffs of the bonds, the county defaulted.

The debt deals also were rife with political corruption, leading the cost of the sewer project to soar as it was built during the 1990s. Former commission president and Birmingham Mayor Larry Langford, a Democrat, was convicted of accepting bribes in connection with the financing.

Two former JPMorgan bankers are fighting Securities and Exchange Commission charges that they made $8 million in undisclosed payments to friends of commissioners to secure the bank’s role in the deals. In 2009, JPMorgan agreed to a $722 million settlement with the SEC.

Be careful doing business in Ontario! Don’t sell securities that go down; only sell securities that go up, OK? Companies are now required to report on changes in the analytical methodology of third parties, and to guess how liquid the market for their securities is going to be.

There is renewed speculation that the TMX / Maple deal will close:

TMX, owner of the Toronto Stock Exchange, rose to C$44.70 this month, shrinking the gap to Maple Group Acquisition Corp.’s C$50-a-share offer to the narrowest since it became the sole bidder in June, according to data compiled by Bloomberg.
…
“The deal will get done and the regulators will probably do a little tinkering around the edges,” Thomas Caldwell, Toronto-based chief executive officer of Caldwell Securities Ltd., which oversees about $1 billion including TMX shares, said in a telephone interview. “At the end of the day, Maple Group’s offering C$50 a share. Price is going to decide this.”
…
The Competition Bureau is reviewing the C$3.73 billion ($3.64 billion) TMX transaction. Quebec’s Autorite des Marches Financiers scheduled hearings on Nov. 24 and Nov. 25 and the Ontario Securities Commission has hearings Dec. 1 and Dec. 2.

“Regulatory approval is more likely with the board and management supporting the transaction,” Edward Ditmire, an analyst at Macquarie in New York, said in a telephone interview. He says there’s a better than 50 percent chance the deal closes.

It will be a black day for Canada if the banks succeed in cementing a bit more of the Old-boy Club hegemony in the financial landscape. A foreign buyer for the TMX is greatly desirable.

Just in time for the Christmas shopping season comes this insurance news:

Should you be burdened with a particular fear of the supernatural, then you are well looked after when it comes to unusual insurance policies. Ghost, werewolf and vampire insurance can also be procured very easily, with each policy redeemable in the event of an attack by these creatures of the night.

Bell Aliant, proud guarantor of BAF.PR.A, was confirmed by DBRS:

DBRS has today confirmed the short- and long-term ratings of Bell Aliant Regional Communications, Limited Partnership (Bell Aliant or the Company) at R-1 (low) and BBB (high), respectively, along with the preferred share rating at Pfd-3 (high). The trends are Stable. The confirmation reflects a business risk profile that, while undergoing a transition from legacy voice services to focusing on growth areas such as data and video, has to-date been manageable. The ratings also incorporate Bell Aliant’s relatively stable financial risk profile, which remains slightly higher than its Canadian peers but within an acceptable range. DBRS believes that for Bell Aliant, the successful transition to providing new services – both in terms of investment and execution – remains more acute than for other telcos that typically have wireless services throughout their territory to provide growth while this fixed-line transition occurs.

It was a mixed day for the Canadian preferred share market, with PerpetualDiscounts winning 11bp, FixedResets down 3bp and DeemedRetractibles gaining 6bp. Volatility was average. Volume was light.

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	0.0967 %	2,127.6
FixedFloater	4.83 %	4.53 %	26,123	17.25	1	-0.1015 %	3,192.4
Floater	3.38 %	3.40 %	161,266	18.72	2	0.0967 %	2,297.3
OpRet	4.95 %	0.96 %	55,181	1.51	7	0.1845 %	2,483.3
SplitShare	5.78 %	6.77 %	60,433	5.12	3	-0.2525 %	2,501.6
Interest-Bearing	0.00 %	0.00 %	0	0.00	0	0.1845 %	2,270.7
Perpetual-Premium	5.57 %	2.54 %	106,033	0.15	13	0.1653 %	2,156.0
Perpetual-Discount	5.32 %	5.43 %	108,968	14.74	17	0.1115 %	2,290.3
FixedReset	5.13 %	3.07 %	208,077	2.52	62	-0.0299 %	2,343.6
Deemed-Retractible	5.04 %	4.33 %	207,277	3.46	46	0.0575 %	2,217.3

Performance Highlights
Issue	Index	Change	Notes
SLF.PR.H	FixedReset	-2.37 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.90 Bid-YTW : 4.40 %
ELF.PR.F	Perpetual-Discount	-1.14 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-09 Maturity Price : 22.17 Evaluated at bid price : 22.45 Bid-YTW : 5.96 %
CM.PR.P	Deemed-Retractible	-1.12 %	YTW SCENARIO Maturity Type : Call Maturity Date : 2012-10-29 Maturity Price : 25.00 Evaluated at bid price : 25.62 Bid-YTW : 3.04 %
POW.PR.D	Perpetual-Discount	1.03 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-09 Maturity Price : 24.25 Evaluated at bid price : 24.55 Bid-YTW : 5.13 %
BNS.PR.L	Deemed-Retractible	1.18 %	YTW SCENARIO Maturity Type : Call Maturity Date : 2015-04-28 Maturity Price : 25.25 Evaluated at bid price : 25.70 Bid-YTW : 3.95 %

Volume Highlights
Issue	Index	Shares Traded	Notes
ENB.PR.B	FixedReset	69,654	TD crossed 15,000 at 25.60; RBC crossed 25,000 at the same price. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-09 Maturity Price : 23.27 Evaluated at bid price : 25.45 Bid-YTW : 3.64 %
CM.PR.G	Perpetual-Discount	59,975	Scotia crossed blocks of 10,000 and 25,000, both at 24.95. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-09 Maturity Price : 24.59 Evaluated at bid price : 24.91 Bid-YTW : 5.45 %
GWO.PR.I	Deemed-Retractible	59,574	RBC crossed 49,900 at 22.64. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.56 Bid-YTW : 5.88 %
MFC.PR.C	Deemed-Retractible	43,693	rBC crossed 28,600 at 21.60. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.52 Bid-YTW : 6.51 %
BAM.PR.Z	FixedReset	34,065	Recent new issue. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-09 Maturity Price : 23.11 Evaluated at bid price : 25.02 Bid-YTW : 4.38 %
CM.PR.E	Perpetual-Discount	32,383	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-09 Maturity Price : 24.68 Evaluated at bid price : 24.98 Bid-YTW : 5.64 %
There were 21 other index-included issues trading in excess of 10,000 shares.

Wide Spread Highlights
Issue	Index	Quote Data and Yield Notes
BAM.PR.H	OpRet	Quote: 25.36 – 26.83 Spot Rate : 1.4700 Average : 0.9090 YTW SCENARIO Maturity Type : Call Maturity Date : 2011-12-09 Maturity Price : 25.00 Evaluated at bid price : 25.36 Bid-YTW : -4.02 %
W.PR.H	Perpetual-Discount	Quote: 25.08 – 25.47 Spot Rate : 0.3900 Average : 0.2390 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-09 Maturity Price : 23.88 Evaluated at bid price : 25.08 Bid-YTW : 5.48 %
RY.PR.F	Deemed-Retractible	Quote: 25.15 – 25.50 Spot Rate : 0.3500 Average : 0.2263 YTW SCENARIO Maturity Type : Call Maturity Date : 2016-05-24 Maturity Price : 25.00 Evaluated at bid price : 25.15 Bid-YTW : 4.28 %
CU.PR.B	Perpetual-Premium	Quote: 25.55 – 25.90 Spot Rate : 0.3500 Average : 0.2323 YTW SCENARIO Maturity Type : Call Maturity Date : 2011-12-09 Maturity Price : 25.25 Evaluated at bid price : 25.55 Bid-YTW : -12.40 %
CM.PR.M	FixedReset	Quote: 27.32 – 27.73 Spot Rate : 0.4100 Average : 0.3018 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-31 Maturity Price : 25.00 Evaluated at bid price : 27.32 Bid-YTW : 3.01 %
TD.PR.G	FixedReset	Quote: 27.15 – 27.34 Spot Rate : 0.1900 Average : 0.1125 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-30 Maturity Price : 25.00 Evaluated at bid price : 27.15 Bid-YTW : 2.70 %

Rumours are floating about specific bank capital surcharges:

Citigroup Inc. (C), JPMorgan Chase & Co., BNP Paribas SA, Royal Bank of Scotland Group Plc, and HSBC Holdings Plc (HSBA) may face top capital surcharges of 2.5 percentage points, according to a provisional list prepared by global regulators and obtained by Bloomberg News.

The list was drawn up as part of plans by the Group of 20 nations to force banks whose failure could damage the global economy to boost their reserves by 1 to 2.5 percentage points above minimum levels agreed on by international regulators. Bank of America Corp. (BAC), Barclays Plc (BARC) and Germany’s biggest bank Deutsche Bank AG (DBK) may face surcharges of 2 percentage points, according to the list.

At least one ECB council member is objecting to the piggy-bank paradigm:

European Central Bank council member Jens Weidmann said the ECB cannot bail out governments by printing money.

“One of the severest forms of monetary policy being roped in for fiscal purposes is monetary financing, in colloquial terms also known as the financing of public debt via the money printing press,” Weidmann, who heads Germany’s Bundesbank, said in a speech in Berlin today. The prohibition of monetary financing in the euro area “is one of the most important achievements in central banking” and “specifically for Germany, it is also a key lesson from the experience of hyperinflation after World War I,” he said.

The ECB is under pressure to ramp up its bond purchases to cap soaring yields in Italy as governments fail to contain the two-year-old sovereign debt crisis. Weidmann also rejected proposals to use Bundesbank currency and gold reserves to help finance purchases by a special fund, saying this is another form of monetary financing.

Pierre Trudeau was a visionary! First in Greece, now in Italy, the slogan is “Elect me and I’ll quit!

Prime Minister Silvio Berlusconi offered to resign as soon as Parliament approves austerity measures in a vote next week, after defections from his ruling party left him without a majority.

“Once that task has been achieved, the prime minister will tender his resignation to the President,” who will then begin consultations with all political parties, President Giorgio Napolitano said tonight in an e-mailed statement after meeting Berlusconi in Rome.

The resignation offer came after Berlusconi failed to muster an absolute majority on a routine parliamentary ballot, obtaining only 308 votes in the 630-seat Chamber of Deputies today.
…
The yield on Italy’s benchmark 10-year bond jumped 11 basis points today to 6.77 percent, the most since the euro’s introduction in 1999 and near the 7 percent level that drove Greece, Ireland and Portugal to seek international bailouts. The extra premium investors demand to hold the debt instead of German bunds widened to a record 497 basis points.

The desperation of European politicians is leading them down some awfully stupid and dangerous pathways:

Bank regulators may get more powers to enforce a European Union plan to recapitalize lenders, including the ability to ban weaker banks from paying bonuses, under a proposal from the European Commission.

The commission, the EU’s executive arm, will propose the law “in the coming days,” Michel Barnier, the EU’s financial services chief said today.

Europe’s banks will need to raise 106 billion euros ($146 billion) in fresh capital under tougher rules being introduced in response to the euro area’s sovereign-debt crisis, the European Banking Authority said last month.
…
Policy makers want banks to use funds from withholding bonuses and dividends to reach the capital target, rather than reducing the size of their balance sheets.

The EBA will “ensure that there isn’t deleveraging, and in particular also that there isn’t deleveraging in host countries in which trans-national groups operate as a result of the need to achieve certain capital levels,” Polish Finance Minister Jacek Rostowski said in a speech in Brussels.

Well, if they’re trying to increase capital flight, that’s a really good way to do it! It’s getting to the point where I’m not sure I understand why anybody would entrust any money at all to European bank – whether as equity or insured deposit.

What-Debt? and Spend-Every-Penny (the guys who turned a structural surplus into a structural deficit) are now bringing us Europe: the sequel:

The Harper government will take longer to erase the deficit, won’t raise Employment Insurance premiums as high and will extend a temporary work-sharing program in response to a worsening Canadian economy.

Finance Minister Jim Flaherty released his fall economic update Tuesday, providing the first clear examples of the “flexibility” his government has promised in the face of slower-than-expected economic growth.
…
These assumptions for slower growth mean Ottawa is now projecting Canada will not produce a fiscal surplus until 2015-16 or 2016-17, depending on the success of a previously-announced plan to find $4-billion a year in spending cuts.

Prime Minister Stephen Harper had promised during the 2011 election campaign that Canada would be in surplus by 2014-15.
…
The size of the federal debt is now projected to rise from $550.3-billion in 2010-11 to $640.6-billion by 2015-16.

I have no problem with deficit spending, as long as it is accompanied by a plan showing how it will paid for through the cycle. Unfortunately, the Junior Republicans can’t be bothered to think so far ahead.

It was a good day for the Canadian preferred share market, with PerpetualDiscounts gaining 17bp, FixedResets up 4bp and DeemedRetractibles winning 25bp. SLF issues were again notable on the downside of the Performance Highlights table. Volume was good.

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	0.0968 %	2,125.6
FixedFloater	4.82 %	4.53 %	25,353	17.26	1	1.2853 %	3,195.6
Floater	3.38 %	3.41 %	162,401	18.70	2	0.0968 %	2,295.1
OpRet	4.94 %	0.94 %	54,802	1.50	7	-0.1258 %	2,478.7
SplitShare	5.77 %	6.60 %	59,250	5.13	3	-0.2379 %	2,508.0
Interest-Bearing	0.00 %	0.00 %	0	0.00	0	-0.1258 %	2,266.5
Perpetual-Premium	5.57 %	2.79 %	105,708	0.16	13	0.0516 %	2,152.4
Perpetual-Discount	5.33 %	5.31 %	109,499	14.74	17	0.1717 %	2,287.7
FixedReset	5.12 %	2.97 %	209,150	2.51	62	0.0390 %	2,344.3
Deemed-Retractible	5.04 %	4.39 %	208,499	3.82	46	0.2464 %	2,216.1

Performance Highlights
Issue	Index	Change	Notes
GWO.PR.I	Deemed-Retractible	-1.32 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.50 Bid-YTW : 5.91 %
FTS.PR.C	OpRet	-1.14 %	YTW SCENARIO Maturity Type : Call Maturity Date : 2011-12-08 Maturity Price : 25.50 Evaluated at bid price : 26.10 Bid-YTW : -10.67 %
SLF.PR.A	Deemed-Retractible	-1.12 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.12 Bid-YTW : 6.41 %
SLF.PR.B	Deemed-Retractible	-1.11 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.37 Bid-YTW : 6.32 %
BMO.PR.Q	FixedReset	-1.06 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.23 Bid-YTW : 3.09 %
FTS.PR.H	FixedReset	1.18 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-08 Maturity Price : 23.53 Evaluated at bid price : 25.75 Bid-YTW : 2.82 %
BAM.PR.N	Perpetual-Discount	1.28 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-08 Maturity Price : 22.62 Evaluated at bid price : 22.97 Bid-YTW : 5.22 %
BAM.PR.G	FixedFloater	1.29 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-08 Maturity Price : 25.00 Evaluated at bid price : 19.70 Bid-YTW : 4.53 %
TD.PR.O	Deemed-Retractible	1.38 %	YTW SCENARIO Maturity Type : Call Maturity Date : 2012-10-31 Maturity Price : 25.50 Evaluated at bid price : 25.78 Bid-YTW : 3.72 %
IAG.PR.A	Deemed-Retractible	1.71 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.66 Bid-YTW : 5.93 %

Volume Highlights
Issue	Index	Shares Traded	Notes
SLF.PR.F	FixedReset	292,424	RBC crossed blocks of 267,700 and 18,400, both at 26.00. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-06-30 Maturity Price : 25.00 Evaluated at bid price : 26.11 Bid-YTW : 4.50 %
CM.PR.E	Perpetual-Discount	246,600	TD crossed blocks of 99,700 and 100,000, both at 25.00. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-08 Maturity Price : 24.69 Evaluated at bid price : 24.99 Bid-YTW : 5.63 %
SLF.PR.G	FixedReset	110,370	RBC crossed blocks of 47,200 shares, 14,200 and 10,800, all at 24.50. Desjardins crossed 11,500 at the same price. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.51 Bid-YTW : 3.68 %
CM.PR.G	Perpetual-Discount	88,703	Scotia crossed 50,000 at 24.95. Desjardins crossed 12,000 at the same price. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-08 Maturity Price : 24.60 Evaluated at bid price : 24.92 Bid-YTW : 5.44 %
RY.PR.R	FixedReset	81,875	Scotia crossed blocks of 30,000 and 44,700, both at 26.93. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-02-24 Maturity Price : 25.00 Evaluated at bid price : 26.90 Bid-YTW : 2.71 %
BAM.PR.O	OpRet	50,900	TD crossed 50,000 at 25.80. YTW SCENARIO Maturity Type : Option Certainty Maturity Date : 2013-06-30 Maturity Price : 25.00 Evaluated at bid price : 25.58 Bid-YTW : 3.90 %
There were 38 other index-included issues trading in excess of 10,000 shares.

Wide Spread Highlights
Issue	Index	Quote Data and Yield Notes
GWO.PR.J	FixedReset	Quote: 26.07 – 26.60 Spot Rate : 0.5300 Average : 0.3725 YTW SCENARIO Maturity Type : Call Maturity Date : 2013-12-31 Maturity Price : 25.00 Evaluated at bid price : 26.07 Bid-YTW : 4.24 %
GWO.PR.M	Deemed-Retractible	Quote: 25.95 – 26.49 Spot Rate : 0.5400 Average : 0.3975 YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.95 Bid-YTW : 5.43 %
BNA.PR.E	SplitShare	Quote: 23.09 – 23.75 Spot Rate : 0.6600 Average : 0.5198 YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2017-12-10 Maturity Price : 25.00 Evaluated at bid price : 23.09 Bid-YTW : 6.60 %
HSB.PR.C	Deemed-Retractible	Quote: 25.24 – 25.80 Spot Rate : 0.5600 Average : 0.4300 YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.24 Bid-YTW : 5.08 %
HSB.PR.D	Deemed-Retractible	Quote: 25.30 – 25.70 Spot Rate : 0.4000 Average : 0.2910 YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.30 Bid-YTW : 4.95 %
IGM.PR.B	Perpetual-Premium	Quote: 26.20 – 26.50 Spot Rate : 0.3000 Average : 0.2062 YTW SCENARIO Maturity Type : Call Maturity Date : 2018-12-31 Maturity Price : 25.00 Evaluated at bid price : 26.20 Bid-YTW : 5.15 %