I see that commodity ETF promoters have had good idea – and the boohoohoo brigade is in full cry:
Plans by ETF Securities and others to launch a range of base metal exchange-traded funds (ETFs) backed by metal in LME-registered warehouses rather than futures contracts have been met with a mix of skepticism and fear.
…
Returns on futures funds have disappointed because the cost of rolling expiring contracts forward in a contango, or where the futures price is higher, has offset gains in spot prices. Physical ETFs are unlikely to perform better because fund owners will be charged fees to cover the cost of storing the metal, which could be as high as 6 percent per year.But there is fear too that if physical ETFs actually did become popular they would disrupt the normal flow of raw materials from producers to consumers that lies at the heart of the industrial economy.
If consumers want some physical metal, they can buy ETFs and cash them in. They’ll be in a better position to negotiate now, because they have another vendor – which will reduce the influence of the oligopolies.
As predicted, there is a movement from prop-trading into hedge funds:
UBS AG, the largest Swiss bank, said it has been in talks with “dozens” of proprietary traders from firms worldwide who may start their own hedge funds as banks seek to comply with new U.S. rules aimed at curbing risk.
…
Some traders are teaming up to form groups, said [UBS’s global head of prime brokerage Stuart] Hendel, who is based in New York and was in Singapore to attend UBS’s annual hedge fund conference. Managers will also leave existing hedge-fund firms that haven’t reached their high-water mark, or the historical peak net asset value of a hedge fund, he said.“Funds with poor performance will splinter,” he said.
It will be harder to raise assets as investors need managers to put in place the necessary infrastructure and risk management platforms before putting their money into hedge funds, he said.
“The bar is going up,” Hendel said. “You can’t start with three people in a garage anymore on your Mastercard.”
I agree – regulation is crushing entrepreneurialism. Is this a good thing or a bad thing? Who knows, who cares, nobody’s ever bothered to think it through.
It seems that Countrywide’s Angelo Mozilo did nothing wrong – he merely attracted the attention of extortionists:
Former Countrywide Financial Corp. Chief Executive Officer Angelo Mozilo agreed to pay a record $67.5 million to settle U.S. Securities and Exchange Commission allegations that he misled investors.
Mozilo, 71, will pay a $22.5 million penalty and disgorge $45 million in gains from the sale of shares at inflated prices under the terms of the settlement read today at a hearing in federal court in Los Angeles. Former Chief Financial Officer Eric Sieracki and former Chief Operating Officer David Sambol also reached settlements. None of the men, who had been scheduled to go on trial Oct. 19, admitted wrongdoing.
The Canadian preferred share market was down today on continued heavy volume, with PerpetualDiscounts losing 12bp and FixedResets off 5bp.
| 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 | -0.1632 % | 2,186.2 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.1632 % | 3,311.8 |
| Floater | 2.86 % | 3.19 % | 76,123 | 19.27 | 3 | -0.1632 % | 2,360.5 |
| OpRet | 4.93 % | 3.91 % | 77,548 | 0.12 | 9 | -0.3967 % | 2,362.1 |
| SplitShare | 5.90 % | -28.07 % | 63,546 | 0.09 | 2 | -0.2838 % | 2,387.9 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.3967 % | 2,159.9 |
| Perpetual-Premium | 5.71 % | 5.10 % | 144,684 | 4.84 | 19 | -0.0742 % | 2,010.9 |
| Perpetual-Discount | 5.44 % | 5.42 % | 236,394 | 14.69 | 58 | -0.1217 % | 2,005.3 |
| FixedReset | 5.27 % | 3.08 % | 338,963 | 3.27 | 47 | -0.0517 % | 2,270.0 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| BAM.PR.I | OpRet | -3.42 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2012-07-30 Maturity Price : 25.00 Evaluated at bid price : 25.11 Bid-YTW : 5.41 % |
| PWF.PR.I | Perpetual-Premium | -1.55 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2011-05-30 Maturity Price : 25.25 Evaluated at bid price : 25.35 Bid-YTW : 4.91 % |
| RY.PR.G | Perpetual-Discount | -1.21 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-10-15 Maturity Price : 21.90 Evaluated at bid price : 22.01 Bid-YTW : 5.18 % |
| BNS.PR.L | Perpetual-Discount | -1.17 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-10-15 Maturity Price : 21.54 Evaluated at bid price : 21.89 Bid-YTW : 5.14 % |
| BAM.PR.P | FixedReset | -1.12 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-10-30 Maturity Price : 25.00 Evaluated at bid price : 27.30 Bid-YTW : 4.56 % |
| RY.PR.A | Perpetual-Discount | -1.08 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-10-15 Maturity Price : 21.58 Evaluated at bid price : 21.90 Bid-YTW : 5.14 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| CM.PR.A | OpRet | 116,600 | Called for redemption. Desjardins bought 100,000 from Nesbitt at 24.98. YTW SCENARIO Maturity Type : Call Maturity Date : 2010-11-30 Maturity Price : 25.00 Evaluated at bid price : 24.97 Bid-YTW : 4.45 % |
| BNS.PR.Y | FixedReset | 86,517 | TD crossed 25,000 at 25.25. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-10-15 Maturity Price : 25.08 Evaluated at bid price : 25.13 Bid-YTW : 3.03 % |
| TD.PR.O | Perpetual-Discount | 53,675 | RBC crossed 25,000 at 23.60. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-10-15 Maturity Price : 23.33 Evaluated at bid price : 23.57 Bid-YTW : 5.15 % |
| BMO.PR.O | FixedReset | 50,250 | RBC crossed 20,000 at 28.49. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-06-24 Maturity Price : 25.00 Evaluated at bid price : 28.45 Bid-YTW : 2.82 % |
| BNS.PR.K | Perpetual-Discount | 49,760 | TD crossed 36,300 at 23.20. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-10-15 Maturity Price : 22.82 Evaluated at bid price : 23.03 Bid-YTW : 5.22 % |
| BNS.PR.Q | FixedReset | 49,472 | TD crossed 30,000 at 26.40. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-11-24 Maturity Price : 25.00 Evaluated at bid price : 26.38 Bid-YTW : 2.97 % |
| There were 55 other index-included issues trading in excess of 10,000 shares. | |||