Category: Market Action

Former SEC Chairman Arthur Levitt, who has been sharply criticized on PrefBlog, has said something sensible:

Arthur Levitt warned the Obama administration and U.S. regulators against attempting to change the way executives at financial firms are compensated.

“Government can jawbone but for government to regulate I think is overkill and very mistaken because you don’t know where it’s going to end,” Levitt said in an interview with Bloomberg Television today. Efforts by the Obama administration to change Wall Street pay practices are “totally wrongheaded,” he said.
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Government attempting to regulate executive pay “has never worked and it cannot work,” Levitt said. “You just can’t micromanage in that way.”

Undismayed by fears of micromanagement, Geithner is pushing for OTC Derivative transparency:

The U.S. Treasury will tell banks to increase transparency in the over-the-counter derivatives market by making prices available on centralized computer platforms, according to people familiar with the plan.

Treasury Secretary Timothy Geithner may announce the decision as soon as today, said the people, who declined to be identified because they weren’t authorized to speak publicly.
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Electronic execution of trades including interest-rate and credit-default swaps would allow users of the financial instruments to get greater price transparency and make processing trades easier. Transactions in the $684 trillion over-the-counter derivatives market are now typically conducted over the phone between banks and customers.

“Anything that will bring transparency to this market will help the market, but the dealers who broker the deals would make less money,” said Paul Zubulake, a senior analyst with Boston- based Aite Group. “More transparency for the buy-side is less profit for the sell-side.”

Zubulake said any mandated changes “are not good for business in general.”

There’s an interesting piece on VoxEU today by Adrian R. Bell, Chris Brooks & Tony Moore: The credit crunch of 1294: Causes, consequences and the aftermath. Plus ca change, plus ca meme chose! The direct parallels to the current crunch drawn by the authors seem to me to be a little contrived, but nevertheless all knowledge is good knowledge.

Volume eased off a bit today, but remains above average levels. Price action was flattish, but with a fair amount of dispersion.

Julia Dickson of OSFI gave a good speech at the Asian Banker Summit, with the central point:

As pointed out by Counterparty Risk Management Policy Group (CPRMG) III “financial excesses fundamentally grow out of human behaviour…which on the upside of the cycle, fosters risk taking and on the downside fosters risk aversion”. The CPRMGIII report goes on to make a number of very basic recommendations: know the risk you are taking, determine a risk appetite and monitor it, have good corporate governance, and ensure that control functions have authority and independence from the business units, communicate well within the firm, among others. What were we doing before this crisis if we did not know the value of these recommendations? We keep learning that we should not assume risks that we do not understand, that we should be diversified, and more… and we keep relearning!

Unfortunately, she continued with the regulators’ obsession with the fact that some people make more money than they do and are sexier:

Why is it that people do not learn these lessons; is it because they have short memories? Memory does fade with time, but I would also suggest it is because powerful incentives are at play. Perhaps we should be looking at how these incentives can blind us to some basic common sense principles.

Looking at incentives requires us to look at a lot more than just bankers’ compensation packages. It requires us to go down some paths that might be quite sensitive; many of them involve the depth to which the financial sector has pervaded our culture.

If I thought all this musing would end with a de facto separation of investment banking and commercial banking, I wouldn’t be so worried. However, the trend seems to be towards further increases in staffing investment banks – and the associated asset management firms – with unmotivated 18-year-old bank tellers. Ultimately, this will cost us a lot of money; and we won’t, ultimately, get fewer instances of rampant idiocy, we’ll just get different ones. Chrysler & GM, propped up for years by the political allure of good jobs, are going to cost taxpayers a lot more money than any of the banks.

Ms. Dickson spoke approvingly of an essay by Claudio Borio of BIS, The macroprudential approach to regulation and supervision, who notes:

Just as an asset manager, who cares about the loss on her portfolio as a whole, focuses on the co-movement of the portfolio’s securities, so a macroprudential regulator would focus on the joint failure of institutions, which determines the loss for the financial system as a whole. The main policy question is how to design the prudential framework to limit the risk of losses on a significant portion of the overall financial system and hence its “tail risk”.

Some might wonder how a desirable object such as heterogeneity of banks might possibly be accomplished with homogeneous banking rules; but it seems to be the regulators’ position that “Regulatory Arbitrage” is a bad thing.

The WSJ has published some criticism of the European response to the Credit Crunch; in return, C-EBS has published a statement on stress-testing:

The Committee of European Banking Supervisors (CEBS) today publishes its statement on stress testing exercise.

– Supervisory authorities in the EU are, in the context of their regular risk assessment of the financial sector, carrying out an EU-wide forward looking stress testing exercise on the aggregate banking system.

– This is not a stress test to identify individual banks that may need recapitalization, as the assessment of specific institutions’ needs for recapitalization remains a responsibility of national authorities.

– This test builds on common scenarios and guidelines developed by the Committee of European Banking Supervisors (CEBS).

– The objective is an EU-wide exercise with common guidelines and scenarios, so as to increase the level of aggregate information among policy makers in assessing the European financial system’s potential resilience to shocks and to contribute to the convergence of best practices in the EU.

– CEBS’ next regular risk assessment will be ready by September 2009. The outcomes are confidential.

DBRS downgraded a big batch of sub-prime RMBS today:

DBRS has today downgraded 1,441 classes from 195 residential mortgage-backed securities (RMBS) transactions. Of the 195 affected transactions, 125 are backed by first-lien subprime collateral, 53 are backed by Alt-A collateral, 12 are backed by prime collateral and five are backed by second-lien subprime collateral.

The classes have been downgraded as a result of the continued rapid increase in serious delinquencies and cumulative losses relative to the available credit enhancement. Additionally, the persistent negative outlooks of the housing market and unemployment rates, coupled with low prepayment speeds, have contributed significantly to the increased default and loss expectations.

As a result, current credit support is not expected to sufficiently cover the anticipated losses. In many cases, subordinate classes have already been impaired, further weakening the available credit support for the remaining senior and mezzanine classes.

They also downgraded Toyota from AAA.

Morningstar reports:

Mutual fund rating agency Morningstar has ranked Canada mid-pack among 16 major countries as a good place for fund investors – but with a failing grade for fees and expenses.

Canada rates high for investor protection and investment transparency, and its overall grade was B-minus, based on criteria which also included taxation and investment choices.
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Canada, by contrast, got the only F grade for fees among the 16 countries studied.

The typical Canadian fund investor pays a management expense ratio of 1.25 to 1.49 per cent for a bond fund, and between two and 2.5 per cent for an equity fund.

Canadians also typically face a front-end load of between four and five per cent, “primarily because investors are unaware that this fee is negotiable,” the Morningstar study adds.

And it notes that Canadian MERs contain trailer fees – “which are fees fairly specific to the Canadian market” – that are paid by fund companies on an ongoing basis to the advisers that sold the funds.

“Canadian investors are comfortable with the fees because they don’t know how low these fees should actually be,” the Morningstar study asserts.

“Assets tend to flow into average-or higher-fee funds because Canadian investors use financial advisers to help them make decisions,” it adds.

“Advisers direct client assets to funds that pay better trailers. And since the trailer is included in the MER, the result is that assets flow into higher-fee funds.”

I note that MAPF now has another competitor, AIC Preferred Income Fund, which pays a trailer of up to 1% out of a management fee of 2.00% plus expenses.

Price changes were mixed today in the preferred share market, netting out to about flat; volume was very good.

About a year ago, there were wild claims being made (e.g., Naked Capitalism) that grading US municipalities on a global scale would bring about Nirvana and the end of useless and expensive municipal bond insurance. It turns out – surprise, surprise – that despite the changes, there are still credit differences between municipalities and the weaker credits still need insurance to flog their bonds:

An early contender to replace them, Warren Buffett’s Berkshire Hathaway Assurance Corp., was downgraded to Aa1 by Moody’s Investors Service in April. The billionaire investor in February called tax-exempt bond guarantees “a dangerous business.” His firm insured $3.3 billion in issues last year, ranking third in the industry.

Buffett’s warning isn’t stopping Macquarie Group Ltd., Australia’s biggest securities firm, from backing a new guarantor: Municipal and Infrastructure Assurance Corp. plans to sell its first policy by July, said Richard E. Kolman, the New York-based startup’s executive vice chairman.

“It is surprising to find that municipal bond insurance is anything but moribund in the early going in 2009,” wrote Philip J. Fischer, a Merrill Lynch & Co. municipal strategist in New York, in an April 6 report.

The overall market price changes were minimal today, although volume continued strong. It was most interesting to see that FixedResets were shut out of the volume-leaders table … that hasn’t happened in a while!

In the wake of the Fed’s stress tests, there has been a flurry of American bank issues:

Wells Fargo & Co. and Morgan Stanley, ordered to increase capital after the U.S. stress tests, raised $15 billion in stock and bond sales today, the first banks to respond to the government’s mandate.

Wells Fargo sold $7.5 billion of common stock, 25 percent more than it originally planned, according to a person close to the situation, and Morgan Stanley raised $7.5 billion by selling stocks and bonds, up from $5 billion it said yesterday that it would raise. Citigroup Inc. is exchanging an additional $5.5 billion of preferred securities into common stock. Bank of America Corp. plans to sell as many as 1.25 billion shares of common stock in a shelf registration and an undetermined amount of debt that wouldn’t be guaranteed by the Federal Deposit Corp.

I’m more impressed by the ease of raising capital than the stress test results. However, USD LIBOR has dropped significantly:

The London interbank offered rate, or Libor, that banks charge for three-month loans fell two basis points to 0.94 percent today, according to the British Bankers’ Association, bringing its decline in the week to seven basis points, the most since the five days through March 20. The Libor-OIS spread, a barometer of the unwillingness of banks to lend, fell today to the lowest level in more than nine months.

Many Readers, even Assiduous ones, will not really appreciate how good it feels to be talking about significant moves while citing single-figure-beep changes!

Another strong day on continued heavy volume.

Across the Curve notes that today’s 30-year treasury auction was a disaster, perhaps due to considerations of sharply increased supply:

Today’s auction began the Treasury’s monthly sales of the so-called long bond, up from quarterly offerings at the end of last year. That means the government will boost sales of the security from $35 billion in 2008 to $120 billion this year, according to Michael Pond, an interest-rate strategist in New York at Barclays Capital Inc., one of the 16 primary dealers that trade with the central bank and are required to participate in Treasury auctions.

After the close, the Fed released results of the stress tests.

Sorry this is so late, folks! Many, many things going on.

To my mind, one of the more fascinating fields of research in the financial sector is market design. I’ve posted about Pegged Orders, proposed regulation of the retail bond market and the BoC’s analysis of bond auction formats, among others. So I was highly entertained – and educated! – by a piece on VoxEU by Trevon D. Logan, Information and Illegal Market Mechanisms:

This column studies the online (illegal) market for male sex work. It shows that participants find ways to get the prices right, even in the absence of formal enforcement mechanisms, using technology to share and disseminate information. The risk of fraud is disciplined by client reviews and demand for photos in escorts’ advertisements.
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While previous empirical work has looked at how information technology improves market functions (Brown and Goolsbee 2002, Jensen 2007, Lewis 2009, Goyal 2008), we provide the first evidence that an illegal online market is just as responsive to information as a legal online market. We believe that this work suggest that, irrespective of the institutions involved, market participants find ways to get the prices right if they have access to technology that allows them to share and disseminate information even in the absence of formal enforcement. Even in markets with formal contracts and enforcement, the types of forums created by the clients of male sex workers are common (e.g., AngiesList.com). In this illegal market, we found that the participants are quite good at policing the market themselves. This informal policing, we believe, is critical to the functioning of this market. While formal institutions in general are undoubtedly important, large economic gains could be made in short order by allowing market participants better access to technology and information, allowing participants to share information and police themselves until formal institutions are well developed enough for contracts to be formalised and enforced.

Speaking of market structure, it is my understanding that there is at least one discount brokerage that will process iceberg orders for retail – not on-line, but when you speak to a “trader” anyway. Where there’s one, there’s probably more … if anybody wants to do the legwork for a survey of discount brokerages, I’ll publish it with credit.

PerpetualDiscounts experienced an interuption of their run-up today and Fixed-Resets were able to catch up a little in performance following a very good month – and Month-to-Date – for the market in general, amidst continued heavy volume. PerpetualDiscounts now yield 6.60%, equivalent to 9.24% interest at the standard equivalency factor of 1.4x. Long Corporates are on a tear as well, returning 2.13% month-to-date (6.68% year-to-date) and now yield about 7.2-7.3%, meaning the the pre-tax interest-equivalent spread is now about 194-204bp … it hasn’t been that low for a while!

The SEC has brought the first insider trading action involving CDS:

The SEC’s complaint alleges that [Deutsche Bank salesman Jon-Paul] Rorech learned information from Deutsche Bank investment bankers about a change to the proposed VNU bond offering that was expected to increase the price of the CDS on VNU bonds. Deutsche Bank was the lead underwriter for a proposed bond offering by VNU. According to the SEC’s complaint, Rorech illegally tipped [former Millenium Partners portfolio manager Renato] Negrin about the contemplated change to the bond structure, and Negrin then purchased CDS on VNU for a Millennium hedge fund. When news of the restructured bond offering became public in late July 2006, the price of VNU CDS substantially increased, and Negrin closed Millennium’s VNU CDS position at a profit of approximately $1.2 million.

“This is the first insider trading enforcement action involving credit default swaps,” said Scott W. Friestad, Deputy Director of the SEC’s Division of Enforcement. “As alleged in our complaint, Rorech and Negrin checked their integrity at the door and schemed to engage in insider trading of CDS to the detriment of investors and our markets.”

The plot thickens with respect to Bernanke’s involvment in the BofA / Merrill Lynch cover-up, discussed on April 24:

“I absolutely did not in any way ask Mr. Lewis to obscure any disclosures or to fail to report information that he should be reporting,” Bernanke said today in testimony to the congressional Joint Economic Committee.

It is not inconsistent with Cuomo’s charges; the Fed wanted the merger to go ahead and did not necessarily say anything about disclosure. But we will see!

In more government interference news, there is a twist to the Chrysler bankruptcy:

Chrysler LLC’s plan to auction most of its assets to an entity managed by Fiat SpA is unfair because it prevents creditors from using their claims to make a non-cash bid, a group of secured lenders told a bankruptcy judge.

The group, calling itself Chrysler’s non-TARP lenders, in reference to the Troubled Assets Relief Program, said the proposed auction chills bids from other parties, and would prevent a so-called “credit bid” from its group.
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The non-TARP group asked U.S. Bankruptcy Judge Arthur Gonzalez not to reveal the identities of its members, even after the judge asked yesterday that they do so. A lawyer for the group, Thomas Lauria, has said members who have been identified have received death threats.

It might be grandstanding … the fears might be genuine but exaggerated … but the President of the United States has to cool things off a little and back away from his inflammatory rhetoric, as discussed on May 1. At any rate, the judge has ruled that they must identify themselves.

The market had another very good day on high volume, with PerpetualDiscounts leading the way (the way up! about time!) and dragging FixedResets behind them.

Some public sector funds in the US have banned placement agents:

The move by some U.S. public pension funds to ban middlemen who market the services of private equity and hedge fund investments is misguided, according to Michael Travaglini, Massachusetts system executive director.

The funds would be better served installing more checks and balances to prevent undue political influence, Travaglini said. New York, for instance, should broaden control of its pension so the state comptroller is no longer sole trustee, Travaglini said in a telephone interview.

New York State Comptroller Thomas DiNapoli, who runs the $121.9 billion fund, banned the use of placement agents, lobbyists or other paid intermediaries last month amid a widening pay-to-play investigation. New York City similarly told money managers they could no longer use middlemen get pension fund business.

“There’s a legitimate place for placement agents,” said Travaglini, who’s helped run the $34.2 billion retirement fund for public employees in Massachusetts since 2004. “I’m amazed that a political corruption case has led people to question the legitimacy of a long established part of the asset management business.”

The ban is craziness, but there will be many more babies thrown out with the bathwater as political posturing takes centre stage.

DBRS is forecasting a preponderance of downgrades in 2009:

In a commentary released today, DBRS notes that it has seen a significant increase in credit deterioration in Q1 2009. According to the report, corporate credits finished the quarter on a negative tone, with approximately 16% of the DBRS universe facing negative rating action over the next 12 months. In contrast, only 2% of credits reviewed by DBRS were facing positive rating action.

The preferred share market continued its rally today, with PerpetualDiscounts roaring ahead as – perhaps – the market has realized why embedded calls at par in five years are valuable for issuers of FixedResets.

I understand that Scotia has done an Innovative Tier 1 Capital deal, described as “650 million deal June 30, 2019-2108 … at 7.804%”, but have no further details, no press release, nothing on SEDAR.

One of my favourite words has been banned in the UK:

Liquidity, equity and stabilization are “grandiose or ambiguous” words that shouldn’t be used in investment brochures, Britain’s financial regulator said.

Short, punchy sentences with sub-headings and colored graphs should replace swathes of text, the Financial Services Authority said in a paper yesterday. Too much data is as bad as no information as it deters customers from properly reading documents, the London-based agency said.

If financial companies bamboozle customers with technical language, they won’t be treating them fairly — one of the principles by which they must abide — the FSA said. The regulator may not be following its own advice: FSA Chairman Adair Turner used the word “liquidity” 187 times in a 126-page report in March on financial regulation.

The actual paper is something of a hoot. The intent of the FSA is laudable, but … when you explain complex investment instruments to retail, you can have precision or comprehension. Pick One.

The Chrysler bankruptcy is becoming a political circus:

President Barack Obama said Chrysler LLC lenders who turned down his buyout offers are a “small group of speculators” who forced the automaker into bankruptcy.

“A group of investment firms and hedge funds decided to hold out for the prospect of an unjustified taxpayer-funded bailout,” Obama said today in Washington before Chrysler filed for bankruptcy protection.
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While lenders representing 70 percent of the Chrysler loans agreed to Obama’s offer of $2.25 billion in cash, the dissidents ignored a deadline of 6 p.m. yesterday, according to one of the investors who declined to be named.
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Chrysler’s dissident lenders have on their side the “absolute priority” bankruptcy rule, which holds that value must be distributed according to the legal priorities of the stakeholders. What riled the group that put out the statement today was the fact that junior creditors, consisting of a workers healthcare trust, would get equity in a new Chrysler entity while they would not.

In the deal Chrysler was trying to conclude out of court, Fiat would have become a 20 percent owner of Chrysler, and a union retiree health-care trust fund would hold 55 percent, with the rest of the company staying in the government’s hands initially, according to people familiar with the matter. The government intends to replicate this, using bankruptcy to set up a new company, people familiar with the plan said.
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“The U.S. bankruptcy code foresees the possibility that it may be necessary to vary from ‘absolute priority,’ in particular when a two-thirds majority is convinced it makes legal or business sense,” said Richard Hahn, co-chairman of the bankruptcy practice at Debevoise & Plimpton LLP, a New York law firm that isn’t involved in the Chrysler negotiations. “If the government has consents from 70 percent, that’s more than enough” to give equity to junior creditors.

The dissidents “may be calculating that they can get more money by waiting a bit longer,” Hahn said. “Presumably they will file objections in court. The issue is less whether they’ll win than whether they can cause a meaningful delay that may cause Chrysler or the government to come to an accommodation.”
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The objections from the group of lenders also drew criticism from Michigan lawmakers, including Democratic Representatives John Dingell and Sander Levin.

“The rogue hedge funds that refused to agree to a fair offer to exchange debt for cash from the U.S. Treasury — firms I label as the ‘vultures’ — will now be dealt with accordingly in court,” Dingell said.

Histrionics, flat declarations and squabbling over the carcass is nothing new in bankruptcy proceedings. The fact that one of the squabblers in the President of the United States of America is worrisome.

A paper on VoxEU titled Private pensions and policy responses to the crisis drew my attention to the OECD Pension Outlook 2008 that had many interesting things to say, for instance:

and (from the related documentation on Pension Plan fees, emphasis added):

While competition is normally expected to bring down costs, individual account pension markets behave in a counterintuitive manner. Marketing and sales agents have been used in the past to encourage members to switch providers, leading to an increase in operational expenses and fees. As members are not very responsive to higher fees, systems that a priori seemed to be highly competitive, with many players, have actually turned out to do rather poorly in terms of fees.

and

The paper argues that the particularly low fees observed in Bolivia and Sweden at the inception of their respective systems stem largely from a decision to force cost competition among providers via a central agency or ‗clearing house‘.
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One possible explanation for the low costs in countries like Bolivia and Uruguay may be the conservative asset allocation of pension funds in these countries (Bolivian pension funds invest more than 90% in domestic treasury bonds).

There’s also ancilliary documentation on performance which shows Canada doing well, although data is limited.

Volumes came down a little today, but remain very healthy – and the market continued to rise, with some very high prices being seen for recent fixed-resets.

Bloomberg reports that:

American Express Co.’s preferred stock rating was cut to BB, or non-investment grade, from BBB by Standard & Poor’s Ratings Services.

I don’t see anything on the S&P site as yet. Moodys downgraded on April 24:

Moody’s Investors Service downgraded the long-term and short-term ratings of American Express Company (“Amex”). The senior long-term debt rating was lowered to A3 from A2; and the short-term rating was lowered to Prime-2 from Prime-1. The outlook for the Amex long-term ratings is negative.

Moody’s also downgraded the long-term ratings of American Express Travel Related Services (“TRS”) and its rated operating subsidiaries, including American Express Credit Corp. The senior debt and deposit ratings of TRS and subsidiaries were downgraded to A2 from A1. The Bank Financial Strength Ratings of American Express Bank, FSB and American Express Centurion Bank were also lowered to C+ from B-. The Prime-1 short-term ratings for TRS and its rated operating subsidiaries were affirmed. The rating outlook for the TRS debt and deposit ratings is now stable. The outlook on the Banks’ Financial Strength Ratings (“BFSR”) is negative. These rating actions conclude the review initiated on February 25, 2009.

Today’s rating actions reflect the erosion of Amex’s asset quality and weaker revenue trends stemming from the severe U.S. economic recession and the firm’s relatively high credit exposure in the states most heavily affected by home price declines, particularly California and Florida. Moody’s believes that these developments, in combination with structural and regulatory changes in the credit card and consumer lending industry, pose longer term challenges to the company’s franchise.

Chrysler is bust and there could be a fascinating catfight in the works:

The iconic company, third biggest among U.S. automakers, missed a U.S. government deadline to come up with a restructuring plan by today that was rigorous enough to avoid bankruptcy and qualify for more bailout aid. The carmaker tried to negotiate an alliance with Fiat, reduce $6.9 billion in secured loans and cut $10.6 billion owed to a pension fund. Some lenders refused to slash the debt to $2.25 billion.
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Bankruptcy can involve uncertainty and delay. Dissident creditors intend to object to the company’s reorganization plan, a person familiar with their thinking said. That might thwart President Barack Obama’s goal of a “surgical” bankruptcy that would put a viable carmaker quickly into the market.

Funny story on credit ratings:

[Retired lawyer Ron] Grassi says the companies’ faulty debt analyses have been at the core of the global financial meltdown and the firms should be held accountable. Exhibit One is his own investment. He and his wife, Sally, held $40,000 in Lehman Brothers Holdings Inc. bonds because all three credit raters gave them at least an A rating — meaning they were a safe investment — right until Sept. 15, the day Lehman filed for bankruptcy.

“They’re supposed to spot time bombs,” Grassi says. “The bombs exploded before the credit companies acted.”

In the brave new world of credit ratings, there won’t be any of this mealy-mouthed “A” and “A(high)” stuff. Only two ratings will be allowed: “Good as Gold” and “Going Bankrupt Next Week”. Any errors will be prima facie evidence of a crime.

The Bank of Canada has released a new working paper, Price Movements in the Canadian Residential Mortgage Market:

The authors empirically analyze the price-setting behaviour of the major Canadian banks in the residential mortgage market over the period 1991–2007. They use weekly posted prices of the major mortgage providers to study the degree of competition in mortgage price setting. Their results suggest that the residential mortgage market is imperfectly competitive. They find distinct price leaders and that, as market concentration increases, so does price dispersion – helped by the increased use of discounting from posted prices. The authors also find that, although banks’ pass-through of input price changes to mortgage prices is complete in the long run under reasonable assumptions regarding discounting, there exists some level of pricing asymmetry in the short run.

And the FDIC has circulated a new batch of ticky-boxes:

A number of insured banks with portfolio holdings in private label mortgage-backed securities, collateralized debt obligations (CDOs), or asset-backed securities (ABS) are facing heightened losses as a result of significant investments in these products. Certain structured credit products, particularly private label mortgage-backed securities (MBS) and CDOs, have experienced deteriorating collateral performance, price declines, and credit rating downgrades. Management due diligence regarding purchases of these products was often lacking. This Financial Institution Letter reiterates and clarifies existing supervisory guidance on the purchase and holding of complex structured credit products. It focuses on the various supervisory concerns related to these securities: pre-purchase analysis, suitability determination, risk limits, credit ratings, valuation, ongoing due diligence, adverse classification, and capital treatment.

Whoosh, what a day! The seminar went well (by which I mean, nobody actually threw rocks at me) and I’ll be arranging the next one shortly. The preferred share market roared ahead on good volume.