PrefBlog

In the best news I’ve heard all month UBS is mandating civilized values:

The Swiss bank now has a dress code.

Apparently a memo went out this morning to equity sales at UBS informing the team that “suits are now mandatory” at the office (“swaps and the quant desk already went to suits and equity trading is switching over in two weeks”). The reason for the rule (which “is coming from Switzerland”)? To “re-establish credibility and a sense of professionalism.”

Pressure on Greece is ramping up:

European governments failed to agree on releasing a loan payment to spare Greece from default, ramping up pressure on Prime Minister George Papandreou to first deliver budget cuts in the face of domestic opposition.

On the eve of a confidence vote that may bring down Papandreou’s government, euro-area finance ministers pushed Greece to pass laws to cut the deficit and sell state assets. They left open whether the country will get the full 12 billion euros ($17.1 billion) promised for July as part of last year’s 110 billion-euro lifeline.

“We forcefully reminded the Greek government that by the end of this month they have to see to it that we are all convinced that all the commitments they made are fulfilled,” Luxembourg Prime Minister Jean-Claude Juncker told reporters early today after chairing a euro-crisis meeting in Luxembourg.

Of course, Juncker’s a liar anyway, so this could all simply be choreographed theatre.

Remember Richard Kelertas? Analyst at Dundee Securities? On June 7 I reported:

Kelertas said that the Muddy Waters report was inaccurate and there’s nothing fraudulent about Sino-Forest “to the best of our knowledge.” He recommended buying Sino-Forest shares from September 2007 until June 3, when he put his rating on the company under review.

Dundee was among institutions that helped Sino-Forest sell shares in December 2009 and also in May 2009.
…

I haven’t heard such an impassioned defense of company from a dealer since Bre-X!

He went further:

A couple of analysts did come to Sino’s defence, most notably Dundee’s Richard Kelertas. In a remarkable conference call on Tuesday, he jumped way outside his mandate and accused Mr. Block of committing his own fraud, calling his research “a pile of crap.”

But now he’s singing from a different hymnbook:

Richard Kelertas, an analyst at Dundee Securities, has had enough of Sino-Forest Corp. (TRE-T2.75-0.44-13.79%): He suspended coverage of the Chinese forestry company on Monday morning, after putting the stock “under review” on June 3
…
“Until such time as the company has made public the findings of the board-appointed independent committee together with the assistance of its external advisors, including legal council Osler Hoskin & Harcourt LLP and the accounting firm PricewaterhouseCoopers, and we have had time to review and analyze these findings, we are not in a position to comment on or otherwise speculate on matters as they relate to the business practice or valuation of Sino-Forest,” Mr. Kelertas said in a note.

Gee … I wonder what changed?

I continue to hold my view – held since I became sophisticated enough to read analyst reports closely – that sell side analysis should be viewed as being for entertainment purposes only. And I have to admit, Kelertas’ tergiversations are highly entertaining.

Today’s factoid:

On Monday, Canadian 30-year yields started the day below 3.4 per cent. Other than a few weeks last fall, these rates are the lowest Ottawa has seen since the mid-1950s, noted Bank of Montreal deputy chief economist Doug Porter.

Richard Fisher of the Dallas Fed reprised a funny line in his speech titled Containing (or restraining) systemic risk – the need to
not fail on “too big to fail”:

For example, some of you may recall the public letter written by 364 eminent economists predicting disastrous consequences that would result from Thatcher’s policy initiatives. That letter was published in the Times of London on March 30, 1981.[Footnote] The British economy began a recovery almost immediately afterward, in 1982; by 1983, inflation and mortgage rates were at their lowest levels in over a decade, while economic growth accelerated. The failure of the consensus view led Chancellor of the Exchequer Geoffrey Howe to define an economist as “a man who knows 364 ways of making love, but doesn’t know any women.”[Footnote]

YLO issues weren’t all that interesting today.

It was a mixed day for the Canadian preferred share market, with PerpetualDiscounts up 3bp, FixedResets gaining 4bp and DeemedRetractibles down 10bp. Volatility picked up. Volume was a bit above average, with all highlighted issues being FixedResets. Nesbitt owned the board today.

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	0.0934 %	2,470.4
FixedFloater	0.00 %	0.00 %	0	0.00	0	0.0934 %	3,715.4
Floater	2.45 %	2.22 %	39,290	21.74	4	0.0934 %	2,667.4
OpRet	4.88 %	3.35 %	66,336	0.92	9	-0.0430 %	2,430.8
SplitShare	5.24 %	-2.46 %	62,172	0.49	6	0.1760 %	2,501.8
Interest-Bearing	0.00 %	0.00 %	0	0.00	0	-0.0430 %	2,222.8
Perpetual-Premium	5.65 %	5.24 %	142,345	0.91	12	0.1052 %	2,077.3
Perpetual-Discount	5.47 %	5.57 %	117,741	14.45	18	0.0281 %	2,174.9
FixedReset	5.16 %	3.33 %	198,528	2.80	57	0.0391 %	2,309.2
Deemed-Retractible	5.09 %	4.91 %	293,183	8.18	47	-0.1041 %	2,149.3

Performance Highlights
Issue	Index	Change	Notes
ELF.PR.F	Perpetual-Discount	-1.95 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-06-20 Maturity Price : 22.23 Evaluated at bid price : 22.58 Bid-YTW : 5.97 %
GWO.PR.N	FixedReset	-1.05 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.50 Bid-YTW : 3.75 %
BNS.PR.Y	FixedReset	-1.02 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.15 Bid-YTW : 3.39 %
FTS.PR.F	Perpetual-Discount	1.16 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-06-20 Maturity Price : 23.37 Evaluated at bid price : 23.60 Bid-YTW : 5.23 %
TDS.PR.C	SplitShare	1.17 %	YTW SCENARIO Maturity Type : Call Maturity Date : 2011-12-15 Maturity Price : 10.00 Evaluated at bid price : 10.40 Bid-YTW : -2.46 %
GWO.PR.J	FixedReset	6.69 %	Meaningless bounce-back from June 17. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-01-30 Maturity Price : 25.00 Evaluated at bid price : 26.80 Bid-YTW : 3.07 %

Volume Highlights
Issue	Index	Shares Traded	Notes
FTS.PR.H	FixedReset	127,043	Nesbitt crossed two blocks of 60,000 each at 25.40. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-06-20 Maturity Price : 25.30 Evaluated at bid price : 25.35 Bid-YTW : 3.65 %
BMO.PR.M	FixedReset	112,563	Nesbitt crossed 100,000 at 26.25. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-09-24 Maturity Price : 25.00 Evaluated at bid price : 26.18 Bid-YTW : 2.87 %
BMO.PR.O	FixedReset	105,652	Nesbitt crossed 100,000 at 27.74. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-06-24 Maturity Price : 25.00 Evaluated at bid price : 27.74 Bid-YTW : 2.87 %
SLF.PR.G	FixedReset	63,738	Nesbitt crossed 47,500 at 25.15. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.10 Bid-YTW : 3.81 %
BNS.PR.P	FixedReset	57,523	Nesbitt crossed 50,000 at 26.15. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-05-25 Maturity Price : 25.00 Evaluated at bid price : 26.08 Bid-YTW : 2.98 %
TD.PR.Y	FixedReset	52,298	Nesbitt crossed 50,000 at 26.26. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-11-30 Maturity Price : 25.00 Evaluated at bid price : 26.20 Bid-YTW : 3.36 %
There were 34 other index-included issues trading in excess of 10,000 shares.

Wide Spread Highlights
Issue	Index	Quote Data and Yield Notes
ELF.PR.F	Perpetual-Discount	Quote: 22.58 – 23.05 Spot Rate : 0.4700 Average : 0.3388 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-06-20 Maturity Price : 22.23 Evaluated at bid price : 22.58 Bid-YTW : 5.97 %
TD.PR.O	Deemed-Retractible	Quote: 25.11 – 25.45 Spot Rate : 0.3400 Average : 0.2230 YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.11 Bid-YTW : 4.91 %
SLF.PR.F	FixedReset	Quote: 27.05 – 27.35 Spot Rate : 0.3000 Average : 0.2067 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-30 Maturity Price : 25.00 Evaluated at bid price : 27.05 Bid-YTW : 3.17 %
TD.PR.Q	Deemed-Retractible	Quote: 26.09 – 26.39 Spot Rate : 0.3000 Average : 0.2267 YTW SCENARIO Maturity Type : Call Maturity Date : 2017-03-02 Maturity Price : 25.00 Evaluated at bid price : 26.09 Bid-YTW : 4.90 %
BMO.PR.L	Deemed-Retractible	Quote: 26.59 – 26.86 Spot Rate : 0.2700 Average : 0.1973 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-06-24 Maturity Price : 25.75 Evaluated at bid price : 26.59 Bid-YTW : 4.63 %
TCA.PR.X	Perpetual-Premium	Quote: 50.49 – 50.72 Spot Rate : 0.2300 Average : 0.1607 YTW SCENARIO Maturity Type : Call Maturity Date : 2013-11-14 Maturity Price : 50.00 Evaluated at bid price : 50.49 Bid-YTW : 5.54 %

The IMF has released the Global Financial Stability Report for June 2011. To the disappointment of many, it did not include a centrefold, but I found one chart particularly interesting:

Ireland is going to allow some banks’ senior debt to default:

Irish Finance Minister Michael Noonan said Wednesday he has sought the support of the International Monetary Fund in Washington to bring a radical new plan to the European Union to impose significant losses on senior bond holders in Anglo Irish Bank Corp. and Irish Nationwide Building Society–the country’s two most troubled lenders.
…
Noonan told the IMF that Anglo Irish and Irish Nationwide are not “real” banks because the lenders are in the process of being wound down, and that senior bondholders should have to share in the losses of “speculative” investments with Irish taxpayers.
…
According to Irish central bank figures, at the end of March there were EUR3.15 billion unguaranteed senior bonds outstanding in Anglo Irish and only EUR601 million left in Irish Nationwide.

Analysts say savings from the proposed burden-sharing will therefore go nowhere near offsetting the EUR34.5 billion the Irish authorities have injected into Anglo Irish and Irish Nationwide, the two lenders at the heart of Ireland’s inter-linked banking and sovereign-debt crises. The cost of rescuing all six broken Irish lenders will likely top EUR70 billion when capitalizations are completed this year.

Noonan, appointed finance minister to the new coalition government in March, has in the past said he was prevented by the ECB from pushing burden sharing on senior bond holders in any of the broken Irish banks.

This puts Ireland on a collision course with the ECB:

For Mr. Noonan to get his way, he needs to persuade European Union leaders and the European Central Bank to break the great commandant since the onset of Europe’s debt crisis in 2008: thou shalt not burn senior bond holders in European banks.

The ECB has been particularly trenchant on the point. It told the new Irish government soon after it swept to power in mid-March (Thursday marked the administration’s first one hundred days) not to ever consider under any circumstance forcing losses on senior bond holders for fear of worsening Europe’s debt crisis.

This politicization of the bankruptcy process is going to be very harmful in the end. How? I don’t know how. It might be something subtle, like increasing European bank funding costs by X bp for the next thirty years. Or it could be more exciting. I don’t know. But I do know that 300 years of bankruptcy law exists for a reason and when you throw it out for reasons of temporary expediency, you’re almost certainly going to make matters worse.

Meanwhile:

Moody’s Investors Service Friday said it may cut Italy’s sovereign credit rating from Aa2, citing such challenges as reforming a rigid labour market while also facing the likelihood of rising interest rates.

It looks like the Canadian financial oligopoly may be losing influence! Glass-Lewis prefers the LSE-TMX deal over the boys’ club bid:

Influential shareholder-advisory firm Glass Lewis is advising TMX Group Inc.(X-T43.300.310.72%) shareholders to vote in favour of a plan to combine with London Stock Exchange Group Inc., saying it’s less risky than a competing takeover for TMX put forward by a consortium of Canadian financial institutions calling themselves Maple Group.
…
Glass Lewis’s opinion matters in takeovers because many investment firms rely on the firm’s research to aid in making decisions on shareholder votes. For that reason, the recommendation may sway some votes in LSE’s favour.

It’s a little odd – Glass Lewis is an international firm, lowering the chance that their recommendation is influenced by the Canadian requirement to cooperate with the bank/regulatory complex. On the other hand, they’re owned by Ontario Teachers, which is a member of the club in good standing.

More angst over capital rules:

Bank of America Corp. (BAC) Chief Executive Officer Brian T. Moynihan said excessive capital surcharges on the largest banks could limit lending and discourage investors from funding the industry.
…
The Basel Committee on Banking Supervision is considering a capital surcharge of as much as 3.5 percentage points on the largest banks if they get bigger, according to two people familiar with the talks.

Draft plans circulated before a meeting next week would subject banks to a sliding scale depending on their size and links to other lenders, said the people, who declined to be identified because the proposals aren’t public.

Interesting piece about the Sino-Forest takedown:

Four days after attacking Canada’s largest forestry firm, Carson Block finally faced investors and analysts on a conference call Monday.

One caller, who sounded very upset, asked an obvious question: In preparing his infamous report on Sino-Forest Corp., how much time did he spend speaking with the company?

Mr. Block wasn’t rattled. He calmly stated that he spoke with Sino’s investor relations executive for a maximum of two and a half hours, and that she seemed knowledgeable on the company.

If the line had been open to all callers, the gasp would have been audible as everyone absorbed the same information: This guy wiped out more than $3-billion of shareholder value from a company he spoke to for only a couple of hours.

Shocking. He actually went out and did field research instead of copying down what the company’s IR staff told him! Such things should not be allowed! The story is highly deficient in at least one respect:

According to experts, investors trusted Mr. Block for two reasons: Sino-Forest’s history of poor transparency that lent credibility to his claims, and the fact that whistle blowers are so often right in these situations. From Enron to Bernie Madoff (famously cited in the first line of Mr. Block’s report), the lone wolf in the wilderness is often correct.

It looks like the writer belongs to the Sell Side School of Analysis – but some people have been digging:

Muddy Waters Research, a firm specializing in finding Chinese companies it believes are frauds, shorts the firms’ shares and publicizes the charges on its website.

So far it has made money on its first five bets.
…
Muddy Waters’ track record is based on a Reuters analysis of the published research that is available on the firm’s website. It is not clear whether Muddy Waters or its director of research Carson Block have made other research calls or taken other positions.
…
Of the five companies Muddy Waters is known to have advised investors to sell, with all asserting some level of accounting irregularities, two have been delisted from the Nasdaq and one has not traded since April.

Of the two that continue to trade, neither has come anywhere close to approaching the levels they changed hands at before the reports.

I suggest that another reason some investors are considering the Muddy Waters analysis credible is because of his track record (which may be selective; but five take-downs is a pretty good career). But I’m not an expert.

Whether the Sino-Forest call is correct or not is something on which I have zero expertise (and, frankly, not really a lot of interest). But Mr. Block said it best:

Mr. Block, for his part, has no trouble explaining potential cracks in the financial system. He describes the capital markets as a “hot potato” where the various groups (auditors, bankers, lawyers, etc.) pass the blame to each other when the system suddenly fails. “The gatekeepers whom investors think are providing protection against fraudulent listings don’t function as they should,” he says.

Rob Carrick has a good article on fee-based accounts:

Investors are going to have to become familiar with fee-based accounts because they’re gradually taking over in the advice business. The analysis firm Investor Economics reports that the share of fee-based assets had grown to 48 per cent in the full-service brokerage business as of March 31 from 36 per cent five years ago.

I think fee-based accounts are a great thing, provided:

• The account manager is a fiduciary
• The account manager handles only fee based accounts and doesn’t get a dime from anybody for transactions
• The track record is published
• The advisor’s company accepts only fee-based accounts

Union Gas issued 30-year notes at 4.88%.

It was a yellow-letter day for some investors!

There’s a lot of weeping and wailing about the Vancouver riot, with questions being asked about what went wrong. I’ll answer them – society has gone wrong. We impose so ridiculous constraints on public conduct nowadays – right, Anthony Weiner? – that occasionally things blow up. A kid who has gotten into trouble at school – fairly serious trouble – for throwing a snowball at a wall (as has one kid I know) is going to long for a day of no rules. It’s exactly the same process that makes the Internet such a troll zone.

It was a poor day on the Canadian preferred share market, with PerpetualDiscounts down 15bp, FixedResets losing 13bp and DeemedRetractibles off 1bp. 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	-0.1516 %	2,468.1
FixedFloater	0.00 %	0.00 %	0	0.00	0	-0.1516 %	3,712.0
Floater	2.45 %	2.22 %	39,732	21.75	4	-0.1516 %	2,664.9
OpRet	4.88 %	2.88 %	67,102	0.92	9	0.1119 %	2,431.9
SplitShare	5.25 %	-0.07 %	62,040	0.49	6	0.0444 %	2,497.4
Interest-Bearing	0.00 %	0.00 %	0	0.00	0	0.1119 %	2,223.7
Perpetual-Premium	5.66 %	5.12 %	144,213	1.38	12	0.0674 %	2,075.1
Perpetual-Discount	5.47 %	5.60 %	119,218	14.40	18	-0.1544 %	2,174.3
FixedReset	5.16 %	3.31 %	198,584	2.84	57	-0.1325 %	2,308.3
Deemed-Retractible	5.08 %	4.89 %	297,058	8.17	47	-0.0120 %	2,151.6

Performance Highlights
Issue	Index	Change	Notes
GWO.PR.J	FixedReset	-5.78 %	Meaningless. The issue traded 132,519 shares in a range of 26.81-00 before “lasting” at 25.12-27.00. Remember that given the shoddy data dissemination of the TMX, “lasting” is not necessarily the same as “closing” … but I haven’t checked, since “Trades & Quotes” isn’t updated ’till midnight. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.12 Bid-YTW : 5.39 %
MFC.PR.C	Deemed-Retractible	-1.08 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.04 Bid-YTW : 6.06 %
IAG.PR.E	Deemed-Retractible	1.01 %	YTW SCENARIO Maturity Type : Call Maturity Date : 2019-01-30 Maturity Price : 25.00 Evaluated at bid price : 26.01 Bid-YTW : 5.35 %

Volume Highlights
Issue	Index	Shares Traded	Notes
GWO.PR.J	FixedReset	132,519	Nesbitt crossed blocks of 30,000 and 100,000, both at 26.94. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.12 Bid-YTW : 5.39 %
BNS.PR.P	FixedReset	104,360	Nesbitt crossed 90,000 at 26.15. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-05-25 Maturity Price : 25.00 Evaluated at bid price : 26.14 Bid-YTW : 2.84 %
RY.PR.T	FixedReset	84,569	RBC crossed three blocks of 25,000 each, all at 27.45. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-09-23 Maturity Price : 25.00 Evaluated at bid price : 27.30 Bid-YTW : 3.40 %
RY.PR.C	Deemed-Retractible	77,590	Nesbitt crossed 30,000 at 24.42. RBC crossed blocks of 13,300 and 25,000, both at 24.50. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.44 Bid-YTW : 4.94 %
TRP.PR.B	FixedReset	66,360	National crossed blcoks of 20,000 and 35,000, both at 25.20. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-06-17 Maturity Price : 25.11 Evaluated at bid price : 25.16 Bid-YTW : 3.51 %
BNS.PR.Y	FixedReset	63,158	National crossed 45,000 at 25.45. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.41 Bid-YTW : 3.29 %
There were 37 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: 25.12 – 27.00 Spot Rate : 1.8800 Average : 1.1461 YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.12 Bid-YTW : 5.39 %
POW.PR.A	Perpetual-Discount	Quote: 24.80 – 25.10 Spot Rate : 0.3000 Average : 0.1890 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-06-17 Maturity Price : 24.55 Evaluated at bid price : 24.80 Bid-YTW : 5.74 %
ALB.PR.B	SplitShare	Quote: 22.30 – 22.69 Spot Rate : 0.3900 Average : 0.2852 YTW SCENARIO Maturity Type : Call Maturity Date : 2012-03-29 Maturity Price : 21.80 Evaluated at bid price : 22.30 Bid-YTW : 1.54 %
BAM.PR.O	OpRet	Quote: 25.91 – 26.33 Spot Rate : 0.4200 Average : 0.3165 YTW SCENARIO Maturity Type : Option Certainty Maturity Date : 2013-06-30 Maturity Price : 25.00 Evaluated at bid price : 25.91 Bid-YTW : 3.07 %
CM.PR.I	Deemed-Retractible	Quote: 25.01 – 25.20 Spot Rate : 0.1900 Average : 0.1131 YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.01 Bid-YTW : 4.80 %
GWO.PR.M	Deemed-Retractible	Quote: 25.32 – 25.55 Spot Rate : 0.2300 Average : 0.1589 YTW SCENARIO Maturity Type : Call Maturity Date : 2019-04-30 Maturity Price : 25.00 Evaluated at bid price : 25.32 Bid-YTW : 5.61 %

Greek spreads are getting ridiculous:

The yield on Greece’s 2-year bond topped 30 percent for the first time and the cost of protecting Greece against default climbed 280 basis points to a record 2,050 basis points, according to prices compiled by CMA.

The US Senate did something sensible!:

The U.S. Senate voted to eliminate a tax credit and a tariff for ethanol production, providing the strongest signal yet that Congress will curtail subsidies for corn-based biofuel.

The 73-27 vote exceeded the 60-vote threshold needed to advance the measure as part of an economic development bill. Still, the legislation isn’t likely to become law, and the vote indicated that it will be difficult for ethanol supporters to extend the 45-cent-a-gallon tax break and the 54-cent-a-gallon tariff beyond their scheduled Dec. 31 expiration.

There must have been a blue moon recently because the House did something sensible, too:

The budget of the Commodity Futures Trading Commission would be cut by 15 percent, or $30 million, under a measure passed by the U.S. House.

The Republican spending bill approved today would reduce the agency’s budget to $172 million from its current level of $202 million. The CFTC is responsible for writing most of the new rules to govern derivatives trades made by banks including Goldman Sachs Group Inc. (GS) and Morgan Stanley. (MS)

Bank of Canada Governor Mark “Ban the Bond” Carney continued his crusade for Central Planning yesterday, with a speech titled Housing in Canada:

Since 2008, the federal government has taken a series of prudent and timely measures to tighten mortgage insurance requirements in order to support the long-term stability of the Canadian housing market. These will reduce the possibility that prices are further driven up simply through higher leverage.

No broad-brush policy making for Mr. Carney! Rationing is much preferable to the free market, since it makes the rationers more important. As the Globe noted:

Mr. Carney strongly suggested that the central bank continues to see narrow financial regulation, like steps taken by the Finance Department to make it harder for some Canadians to get a mortgage, as a more appropriate tool than rate hikes for taming the domestic side of the equation.

What should be done, if anything? I am fully prepared to concede that housing prices in Canada have the potential to become harmful; and, for the sake of an argument, am prepared to listen to anybody who cares to argue that we have now reached that point. Well, let’s take a look at another snippet from the speech:

A home purchase triggers the biggest liability most families will ever take on. The value of housing-related debt in Canada has nearly tripled over the past decade to $1.3 trillion. This debt is also the single largest exposure for Canadian financial institutions, with real estate loans making up more than 40 per cent of the assets of Canadian banks, up from about 30 per cent a decade ago (Chart 2).

The obvious answer to this problem – assuming that careful study confirms that this is a problem, which I rather suspect it would – is not to ration credit to those using it for proper purposes, but to introduce counter-cyclical capital requirements on banks. Currently, a mortgage attracts a 35% Risk-Weight for bank capital calculation purposes. OK, keep that, but then say … ‘if your bank has more than 35% real-estate exposure, the Risk-Weight on the amount over 35% is 40%. And the Risk-Weight on the amount over 40% is 45%. This is infinitely preferable to micro-managing banks’ credit decisions and creating a morrass of complex rules to be applied (or ignored, if you’re good friends with the loan officer) at the retail level.

BIS has often warned about the tsunami of maturities soon to be experienced by global banks. So is Moody’s:

Of the the roughly US$11-trillion in long-term bank debt outstanding globally, nearly half will come due between now and the end of 2014, according to Moody’s.

The sudden rise in maturing debt “leaves the banking system exposed to refinancing risk” as the current low-interest rate environment is not expected to continue indefinitely, the rating agency said in a report on Thursday.

According to Moody’s, about US$3.4-trillion, or 33%, will come due by the end of 2012, and $4.9-trillion (45%) by the end of 2013.
…
Moody’s said the most likely scenario as banks deal with the challenge is higher funding costs and lower profitability.

New book idea: “The Statement of Dorian Yellow”, in which an investor shows the world the statment of most of his invetments, with YLO issues being kept secret.

It was a downish day on the Canadian preferred share market, with PerpetualDiscounts flat, FixedResets flat and DeemedRetractibles down 7bp. There were no performance highlights, but volume was really good, with quite a few issues trading in good size.

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	-0.0816 %	2,471.8
FixedFloater	0.00 %	0.00 %	0	0.00	0	-0.0816 %	3,717.6
Floater	2.45 %	2.22 %	41,353	21.75	4	-0.0816 %	2,668.9
OpRet	4.88 %	3.07 %	65,537	0.37	9	0.0646 %	2,429.2
SplitShare	5.25 %	-0.07 %	64,611	0.49	6	-0.0513 %	2,496.3
Interest-Bearing	0.00 %	0.00 %	0	0.00	0	0.0646 %	2,221.2
Perpetual-Premium	5.66 %	5.13 %	145,861	0.92	12	-0.0230 %	2,073.7
Perpetual-Discount	5.46 %	5.58 %	118,468	14.44	18	-0.0047 %	2,177.6
FixedReset	5.16 %	3.32 %	204,097	2.81	57	0.0040 %	2,311.3
Deemed-Retractible	5.08 %	4.90 %	294,001	8.19	47	-0.0748 %	2,151.8

Performance Highlights
Issue	Index	Change	Notes
No individual gains or losses exceeding 1%!

Volume Highlights
Issue	Index	Shares Traded	Notes
TD.PR.M	OpRet	426,000	Nesbitt crossed 423,000 at 25.70. Nice ticket! YTW SCENARIO Maturity Type : Call Maturity Date : 2011-07-16 Maturity Price : 25.50 Evaluated at bid price : 25.70 Bid-YTW : 2.27 %
TD.PR.Y	FixedReset	211,600	Nesbitt crossed blocks of 105,000 and 100,000, both at 26.26. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-11-30 Maturity Price : 25.00 Evaluated at bid price : 26.24 Bid-YTW : 3.28 %
TRI.PR.B	Floater	152,985	Nesbitt crossed 150,000 at 23.25. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-06-16 Maturity Price : 22.99 Evaluated at bid price : 23.26 Bid-YTW : 2.22 %
TD.PR.I	FixedReset	129,300	Nesbitt crossed 120,000 at 27.48. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-08-30 Maturity Price : 25.00 Evaluated at bid price : 27.43 Bid-YTW : 3.32 %
BNS.PR.X	FixedReset	119,013	Nesbitt crossed 100,000 at 27.45. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-05-25 Maturity Price : 25.00 Evaluated at bid price : 27.40 Bid-YTW : 3.16 %
BNS.PR.P	FixedReset	115,151	Nesbitt crossed blocks of 20,000 atnd 65,000 at 26.15. RBC crossed 25,000 at the same price. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-05-25 Maturity Price : 25.00 Evaluated at bid price : 26.12 Bid-YTW : 2.88 %
TD.PR.K	FixedReset	110,885	Nesbitt crossed 100,000 at 27.52. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-08-30 Maturity Price : 25.00 Evaluated at bid price : 27.43 Bid-YTW : 3.32 %
TD.PR.E	FixedReset	108,020	Nesbitt crossed 100,000 at 27.42. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-05-30 Maturity Price : 25.00 Evaluated at bid price : 27.32 Bid-YTW : 3.26 %
TRP.PR.A	FixedReset	101,276	Nesbitt crossed 80,000 at 25.89. YTW SCENARIO Maturity Type : Call Maturity Date : 2015-01-30 Maturity Price : 25.00 Evaluated at bid price : 25.75 Bid-YTW : 3.68 %
There were 48 other index-included issues trading in excess of 10,000 shares.

Wide Spread Highlights
Issue	Index	Quote Data and Yield Notes
FTS.PR.F	Perpetual-Discount	Quote: 23.30 – 23.95 Spot Rate : 0.6500 Average : 0.4102 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-06-16 Maturity Price : 23.09 Evaluated at bid price : 23.30 Bid-YTW : 5.29 %
GWO.PR.F	Deemed-Retractible	Quote: 25.31 – 25.78 Spot Rate : 0.4700 Average : 0.3425 YTW SCENARIO Maturity Type : Call Maturity Date : 2011-10-30 Maturity Price : 25.25 Evaluated at bid price : 25.31 Bid-YTW : 4.59 %
SLF.PR.E	Deemed-Retractible	Quote: 22.60 – 22.87 Spot Rate : 0.2700 Average : 0.1708 YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.60 Bid-YTW : 5.73 %
BAM.PR.J	OpRet	Quote: 26.60 – 26.97 Spot Rate : 0.3700 Average : 0.2895 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-30 Maturity Price : 26.00 Evaluated at bid price : 26.60 Bid-YTW : 4.29 %
RY.PR.I	FixedReset	Quote: 26.06 – 26.32 Spot Rate : 0.2600 Average : 0.1811 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-03-26 Maturity Price : 25.00 Evaluated at bid price : 26.06 Bid-YTW : 3.43 %
BAM.PR.M	Perpetual-Discount	Quote: 21.30 – 21.53 Spot Rate : 0.2300 Average : 0.1604 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-06-16 Maturity Price : 21.30 Evaluated at bid price : 21.30 Bid-YTW : 5.60 %

Greece is teetering:

Greek economic prospects darkened as European bickering risked delaying the next rescue payment and defections weakened Prime Minister George Papandreou’s majority.

An emergency session of euro finance chiefs in Brussels yesterday failed to break a deadlock on how to enroll investors in a second bailout without triggering a default, casting doubt on funds due from the International Monetary Fund next month.

“enroll investors without triggering a default”! Having thrown out bankruptcy law, the politicians are now working on commercial law!

The FRB-Kansas City has published a paper by Edward S. Knotek II and Shujaat Khan titled How Do Households Respond to Uncertainty Shocks? (they don’t):

Uncertainty surged during the financial crisis in 2008 and remained high through a considerable portion of the recovery into 2010. Since then, uncertainty has risen again due to the recent oil price spikes and the March 11, 2011, earthquake and tsunami in Japan. This heightened uncertainty raises the question: How does it affect economic activity?

This article focuses on how households respond to uncertainty shocks—sudden, unexpected events that raise the possibility of extreme future outcomes, either good or bad. Economic theory predicts that household purchases would decline immediately following an uncertainty shock because households would find a value in waiting to make big, irreversible purchases to see how the uncertain environment plays out.

The empirical results, however, suggest that uncertainty shocks tend to curtail household spending only modestly. In some cases, these responses manifest themselves only after a considerable period. In addition, uncertainty shocks account for only a small portion of the total fluctuations in household spending. These results suggest that commonly used measures of uncertainty shocks do not appear to be a key factor driving households’ spending decisions and, in turn, economic weakness.

Speaking of uncertainty in the stock market…:

U.S. investors last week pulled the most money from domestic stock funds in six months after equities fell on concerns that the economic recovery may be faltering.

Funds that invest in U.S. stocks lost $5.46 billion in the week ended June 8, the biggest redemptions since the week ended Dec. 8, when investors withdrew $7.6 billion, according to the Washington-based Investment Company Institute. Funds that invest in international equities had $291 million in withdrawals last week, the ICI said today in an e-mail.

There is no word as to whether the authorities are still blaming equity mutual fund outflows on the flash crash of 2010-5-6.

The Yellow Badge of Damage was prominent today:

It was a poor day for the Canadian preferred share market, with PerpetualDiscounts down 9bp, FixedResets losing 9bp and DeemedRetractibles getting hit for 16bp. Not much volatility, volume was again above average.

PerpetualDiscounts now yield 5.51%, equivalent to 7.16% interest at the standard equivalency factor of 1.3x. Long Corporates yield about 5.3%, so the pre-tax interest-equivalent spread is now about 185bp, unchanged from June 1.

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	-0.2441 %	2,473.9
FixedFloater	0.00 %	0.00 %	0	0.00	0	-0.2441 %	3,720.7
Floater	2.45 %	2.21 %	41,281	21.78	4	-0.2441 %	2,671.1
OpRet	4.89 %	3.44 %	66,390	0.93	9	-0.2062 %	2,427.6
SplitShare	5.25 %	-0.26 %	64,856	0.50	6	-0.0546 %	2,497.6
Interest-Bearing	0.00 %	0.00 %	0	0.00	0	-0.2062 %	2,219.8
Perpetual-Premium	5.66 %	4.77 %	149,401	0.77	12	-0.0493 %	2,074.2
Perpetual-Discount	5.46 %	5.51 %	119,966	14.45	18	-0.0935 %	2,177.7
FixedReset	5.16 %	3.29 %	190,006	2.81	57	-0.0920 %	2,311.2
Deemed-Retractible	5.08 %	4.91 %	297,267	8.17	47	-0.1588 %	2,153.4

Performance Highlights
Issue	Index	Change	Notes
RY.PR.H	Deemed-Retractible	-1.36 %	YTW SCENARIO Maturity Type : Call Maturity Date : 2017-06-23 Maturity Price : 25.00 Evaluated at bid price : 26.10 Bid-YTW : 4.90 %
HSB.PR.D	Deemed-Retractible	-1.12 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.72 Bid-YTW : 5.14 %
GWO.PR.N	FixedReset	1.63 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.90 Bid-YTW : 3.58 %

Volume Highlights
Issue	Index	Shares Traded	Notes
TD.PR.N	OpRet	348,775	YTW SCENARIO Maturity Type : Call Maturity Date : 2012-05-30 Maturity Price : 25.25 Evaluated at bid price : 25.66 Bid-YTW : 3.44 %
BNS.PR.P	FixedReset	312,485	YTW SCENARIO Maturity Type : Call Maturity Date : 2013-05-25 Maturity Price : 25.00 Evaluated at bid price : 26.14 Bid-YTW : 2.83 %
TD.PR.Y	FixedReset	305,440	YTW SCENARIO Maturity Type : Call Maturity Date : 2013-11-30 Maturity Price : 25.00 Evaluated at bid price : 26.25 Bid-YTW : 3.26 %
TD.PR.M	OpRet	166,700	YTW SCENARIO Maturity Type : Call Maturity Date : 2012-05-30 Maturity Price : 25.25 Evaluated at bid price : 25.65 Bid-YTW : 3.60 %
BMO.PR.M	FixedReset	108,380	YTW SCENARIO Maturity Type : Call Maturity Date : 2013-09-24 Maturity Price : 25.00 Evaluated at bid price : 26.25 Bid-YTW : 2.73 %
CM.PR.I	Deemed-Retractible	76,550	YTW SCENARIO Maturity Type : Call Maturity Date : 2016-03-01 Maturity Price : 25.00 Evaluated at bid price : 25.17 Bid-YTW : 4.70 %
There were 43 other index-included issues trading in excess of 10,000 shares.

Wide Spread Highlights
Issue	Index	Quote Data and Yield Notes
HSB.PR.D	Deemed-Retractible	Quote: 24.72 – 25.05 Spot Rate : 0.3300 Average : 0.2238 YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.72 Bid-YTW : 5.14 %
IAG.PR.F	Deemed-Retractible	Quote: 25.60 – 25.89 Spot Rate : 0.2900 Average : 0.1850 YTW SCENARIO Maturity Type : Call Maturity Date : 2019-04-30 Maturity Price : 25.00 Evaluated at bid price : 25.60 Bid-YTW : 5.52 %
ELF.PR.F	Perpetual-Discount	Quote: 23.01 – 23.36 Spot Rate : 0.3500 Average : 0.2465 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-06-15 Maturity Price : 22.76 Evaluated at bid price : 23.01 Bid-YTW : 5.85 %
MFC.PR.D	FixedReset	Quote: 27.07 – 27.40 Spot Rate : 0.3300 Average : 0.2323 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-19 Maturity Price : 25.00 Evaluated at bid price : 27.07 Bid-YTW : 3.75 %
PWF.PR.F	Perpetual-Discount	Quote: 24.31 – 24.64 Spot Rate : 0.3300 Average : 0.2327 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-06-15 Maturity Price : 24.06 Evaluated at bid price : 24.31 Bid-YTW : 5.47 %
NA.PR.P	FixedReset	Quote: 27.61 – 27.90 Spot Rate : 0.2900 Average : 0.2017 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-03-17 Maturity Price : 25.00 Evaluated at bid price : 27.61 Bid-YTW : 2.88 %

OSFI’s revolving door revolved again, with the departure of the Assistant Croupier:

I am writing to announce the departure from OSFI of Mark White, Assistant Superintendent, Regulation Sector, effective October 31, 2011. Mark has accepted a position with a federally regulated financial institution and will assume his new role on November 1, 2011.

You can’t see the Sino-Forest for the trees:

Horsley, Chief Executive Officer Allen Chan, and director William Ardell held a 68-minute conference call with investors and analysts yesterday to refute assertions from Block’s Muddy Waters LLC that Sino-Forest overstated its timber holdings. Sino-Forest slumped 33 percent yesterday after the company’s earnings missed analysts’ estimates.

Paulson may have lost about C$515.5 million ($532.4 million) since June 1, the day before the Muddy Waters report on Sino-Forest was released.
…
“Because Muddy Waters never approached the company before it issued the report, it came as a total surprise to us,” Chan said. “Had Muddy Waters approached us before the release of the report, definitely we would have had lots of opportunity to explain to them, to show them all the errors that they have made in the report.”

The company has established an independent committee to investigate Muddy Waters’ allegations and appointed PricewaterhouseCoopers LLP to assist. The probe won’t be finished for two to three months, slowing the pace of timberland acquisitions, Sino-Forest said yesterday in its earnings statement.

From the last two paragraphs, I’m not sure whether refuting the allegations is supposed to be easy or hard!

Time for some yellow journalism!

It was a mixed day for the Canadian preferred share market, with PerpetualDiscounts up 15bp, FixedResets losing 1bp and DeemedRetractibles gaining 11bp. 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	0.1771 %	2,479.9
FixedFloater	0.00 %	0.00 %	0	0.00	0	0.1771 %	3,729.8
Floater	2.44 %	2.20 %	41,145	21.79	4	0.1771 %	2,677.6
OpRet	4.88 %	2.61 %	67,419	0.37	9	0.0903 %	2,432.6
SplitShare	5.25 %	-0.26 %	63,878	0.50	6	-0.0179 %	2,498.9
Interest-Bearing	0.00 %	0.00 %	0	0.00	0	0.0903 %	2,224.4
Perpetual-Premium	5.66 %	4.75 %	151,549	0.77	12	-0.0378 %	2,075.2
Perpetual-Discount	5.46 %	5.54 %	120,633	14.45	18	0.1475 %	2,179.8
FixedReset	5.15 %	3.28 %	192,360	2.82	57	-0.0053 %	2,313.4
Deemed-Retractible	5.07 %	4.88 %	294,447	6.32	47	0.1134 %	2,156.8

Performance Highlights
Issue	Index	Change	Notes
HSB.PR.C	Deemed-Retractible	1.01 %	YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-30 Maturity Price : 25.00 Evaluated at bid price : 25.00 Bid-YTW : 5.05 %
GWO.PR.I	Deemed-Retractible	1.02 %	YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.79 Bid-YTW : 5.62 %
HSB.PR.D	Deemed-Retractible	1.21 %	YTW SCENARIO Maturity Type : Call Maturity Date : 2015-01-30 Maturity Price : 25.00 Evaluated at bid price : 25.00 Bid-YTW : 4.96 %
POW.PR.B	Perpetual-Discount	1.29 %	YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-06-14 Maturity Price : 24.10 Evaluated at bid price : 24.36 Bid-YTW : 5.58 %

Volume Highlights
Issue	Index	Shares Traded	Notes
MFC.PR.D	FixedReset	83,257	RBC crossed two blocks of 25,000 each, both at 27.25. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-19 Maturity Price : 25.00 Evaluated at bid price : 27.23 Bid-YTW : 3.54 %
NA.PR.L	Deemed-Retractible	74,976	Desjardins crossed 37.400 at 25.10. TD crossed 24,100 at the same price. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.10 Bid-YTW : 4.88 %
FTS.PR.C	OpRet	52,087	RBC crossed 50,000 at 25.83. YTW SCENARIO Maturity Type : Call Maturity Date : 2011-07-14 Maturity Price : 25.50 Evaluated at bid price : 25.83 Bid-YTW : -7.86 %
BMO.PR.H	Deemed-Retractible	51,117	RBC crossed 40,000 at 25.48. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-03-27 Maturity Price : 25.00 Evaluated at bid price : 25.38 Bid-YTW : 4.58 %
RY.PR.P	FixedReset	48,005	TD crossed 25,000 at 27.16. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-03-26 Maturity Price : 25.00 Evaluated at bid price : 27.16 Bid-YTW : 3.13 %
NA.PR.K	Deemed-Retractible	34,220	TD crossed 24,900 at 25.61. YTW SCENARIO Maturity Type : Call Maturity Date : 2011-07-14 Maturity Price : 25.25 Evaluated at bid price : 25.58 Bid-YTW : -4.23 %
There were 43 other index-included issues trading in excess of 10,000 shares.

Wide Spread Highlights
Issue	Index	Quote Data and Yield Notes
PWF.PR.O	Perpetual-Premium	Quote: 25.50 – 25.88 Spot Rate : 0.3800 Average : 0.2419 YTW SCENARIO Maturity Type : Call Maturity Date : 2018-11-30 Maturity Price : 25.00 Evaluated at bid price : 25.50 Bid-YTW : 5.63 %
IAG.PR.C	FixedReset	Quote: 26.70 – 27.00 Spot Rate : 0.3000 Average : 0.2144 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-01-30 Maturity Price : 25.00 Evaluated at bid price : 26.70 Bid-YTW : 3.39 %
BAM.PR.O	OpRet	Quote: 26.00 – 26.45 Spot Rate : 0.4500 Average : 0.3674 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 %
BNA.PR.E	SplitShare	Quote: 24.20 – 24.58 Spot Rate : 0.3800 Average : 0.3062 YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2017-12-10 Maturity Price : 25.00 Evaluated at bid price : 24.20 Bid-YTW : 5.49 %
MFC.PR.E	FixedReset	Quote: 26.56 – 26.79 Spot Rate : 0.2300 Average : 0.1673 YTW SCENARIO Maturity Type : Call Maturity Date : 2014-10-19 Maturity Price : 25.00 Evaluated at bid price : 26.56 Bid-YTW : 3.59 %
GWO.PR.N	FixedReset	Quote: 24.50 – 24.84 Spot Rate : 0.3400 Average : 0.2776 YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.50 Bid-YTW : 3.76 %