Oh joy, oh bliss! US monetary policy is being politicized – and in pretty polemical terms:
Texas Governor Rick Perry, finishing his first full day of campaigning for the U.S. Republican presidential nomination in Iowa, said it would be “almost treacherous — or treasonous” for Federal Reserve Chairman Ben S. Bernanke to increase stimulus spending before the 2012 election.
“If this guy prints more money between now and the election, I don’t know what you would do with him,” Perry said at a backyard appearance in Cedar Rapids, Iowa. “We would treat him pretty ugly down in Texas. Printing more money to play politics at this particular time in American history is almost treacherous — or treasonous in my opinion.”
It’s pretty hard to walk away from language like that … even as the US slides slowly towards total dysfunction.
On a cheerier note, France and Germany propose to eliminate the European financial sector, allowing business opportunities for the rest of us:
France and Germany will propose a financial transaction tax in September, President Nicolas Sarkozy said after talks with German Chancellor Angela Merkel.
There were further details:
German Chancellor Angela Merkel and French President Nicolas Sarkozy said they’ll press for closer euro-area economic integration with tougher deficit rules and stricter supervision to stamp out the debt crisis.
Merkel and Sarkozy rejected euro bonds and expanding the 440 billion-euro ($633 billion) rescue fund. A plan to resubmit a financial-transaction tax, which was rejected in 2010, extended declines in U.S. stocks. They proposed debt limits be written into national law and a “euro council” to be headed by European Union President Herman van Rompuy established as part of a planned “economic government” for Europe.
It was a strong day for the Canadian preferred share market, with PerpetualDiscounts winning 40bp, FixedResets up 13bp and DeemedRetractibles gaining 25bp. Volatility was good. Volume was average.
Sorry this is so late, folks! Either PrefLetter weekend causes a lot of dislocation, or I’m getting pretty lazy, one or the other.
| 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 | -0.6740 % | 2,169.9 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.6740 % | 3,263.5 |
| Floater | 2.79 % | 2.63 % | 30,798 | 20.72 | 4 | -0.6740 % | 2,342.9 |
| OpRet | 4.88 % | 3.60 % | 57,670 | 0.84 | 9 | 0.0344 % | 2,444.3 |
| SplitShare | 5.30 % | 2.46 % | 59,450 | 0.53 | 4 | 0.0984 % | 2,500.4 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0344 % | 2,235.1 |
| Perpetual-Premium | 5.68 % | 5.15 % | 135,053 | 2.02 | 14 | 0.0679 % | 2,099.6 |
| Perpetual-Discount | 5.41 % | 5.50 % | 109,267 | 14.59 | 16 | 0.4036 % | 2,207.8 |
| FixedReset | 5.17 % | 3.14 % | 214,695 | 2.71 | 59 | 0.1322 % | 2,310.4 |
| Deemed-Retractible | 5.07 % | 4.73 % | 272,103 | 7.99 | 46 | 0.2505 % | 2,176.0 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| PWF.PR.A | Floater | -2.44 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-08-16 Maturity Price : 20.00 Evaluated at bid price : 20.00 Bid-YTW : 2.63 % |
| IAG.PR.E | Deemed-Retractible | -1.15 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2018-12-31 Maturity Price : 25.00 Evaluated at bid price : 25.85 Bid-YTW : 5.60 % |
| CIU.PR.C | FixedReset | -1.02 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-08-16 Maturity Price : 20.30 Evaluated at bid price : 20.30 Bid-YTW : 3.69 % |
| RY.PR.L | FixedReset | 1.02 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-02-24 Maturity Price : 25.00 Evaluated at bid price : 26.62 Bid-YTW : 2.89 % |
| MFC.PR.C | Deemed-Retractible | 1.06 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.95 Bid-YTW : 6.23 % |
| BAM.PR.O | OpRet | 1.18 % | YTW SCENARIO Maturity Type : Option Certainty Maturity Date : 2013-06-30 Maturity Price : 25.00 Evaluated at bid price : 25.80 Bid-YTW : 3.60 % |
| PWF.PR.M | FixedReset | 1.21 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-01-31 Maturity Price : 25.00 Evaluated at bid price : 26.66 Bid-YTW : 3.29 % |
| FTS.PR.F | Perpetual-Discount | 1.46 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-08-16 Maturity Price : 23.97 Evaluated at bid price : 24.25 Bid-YTW : 5.05 % |
| BMO.PR.H | Deemed-Retractible | 2.61 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2013-02-25 Maturity Price : 25.00 Evaluated at bid price : 26.30 Bid-YTW : 1.75 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| SLF.PR.H | FixedReset | 199,950 | Recent new issue. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.70 Bid-YTW : 3.90 % |
| BNS.PR.P | FixedReset | 91,655 | Nesbitt crossed blocks of 50,000 and 25,000, both at 25.85. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-04-25 Maturity Price : 25.00 Evaluated at bid price : 25.81 Bid-YTW : 3.18 % |
| BAM.PR.K | Floater | 43,815 | Nesbitt crossed 40,000 at 16.10. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-08-16 Maturity Price : 16.11 Evaluated at bid price : 16.11 Bid-YTW : 3.29 % |
| RY.PR.F | Deemed-Retractible | 40,343 | Desjardins crossed 15,000 at 24.70. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.65 Bid-YTW : 4.63 % |
| BMO.PR.P | FixedReset | 36,410 | Nesbitt crossed 24,700 at 27.00. YTW SCENARIO Maturity Type : Call Maturity Date : 2015-02-25 Maturity Price : 25.00 Evaluated at bid price : 26.93 Bid-YTW : 3.05 % |
| TD.PR.P | Deemed-Retractible | 35,981 | RBC crossed 25,000 at 25.95. YTW SCENARIO Maturity Type : Call Maturity Date : 2016-11-01 Maturity Price : 25.00 Evaluated at bid price : 25.94 Bid-YTW : 4.51 % |
| There were 33 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| CIU.PR.C | FixedReset | Quote: 20.30 – 24.75 Spot Rate : 4.4500 Average : 3.7123 YTW SCENARIO |
| PWF.PR.A | Floater | Quote: 20.00 – 21.20 Spot Rate : 1.2000 Average : 1.0214 YTW SCENARIO |
| IAG.PR.F | Deemed-Retractible | Quote: 25.86 – 26.54 Spot Rate : 0.6800 Average : 0.5054 YTW SCENARIO |
| BAM.PR.J | OpRet | Quote: 26.29 – 26.96 Spot Rate : 0.6700 Average : 0.5357 YTW SCENARIO |
| BAM.PR.X | FixedReset | Quote: 23.72 – 24.30 Spot Rate : 0.5800 Average : 0.4661 YTW SCENARIO |
| TRP.PR.B | FixedReset | Quote: 25.10 – 25.37 Spot Rate : 0.2700 Average : 0.1763 YTW SCENARIO |