Moody’s downgraded some French banks:
BNP Paribas SA (BNP), Societe Generale SA and Credit Agricole SA (ACA) had their credit ratings cut by Moody’s Investors Service, which cited funding constraints and deteriorating economic conditions amid Europe’s debt crisis.
Moody’s cut the long-term debt ratings for BNP Paribas and Credit Agricole by one level to Aa3, the fourth-highest investment grade. Societe Generale’s rating was cut to A1, the fifth highest. Moody’s also cut the standalone assessments of financial strength of the three banks, while saying there’s a “very high” chance they will get state support if needed.
“Liquidity and funding conditions have deteriorated significantly,” the ratings company said in a statement. The likelihood that they “will face further funding pressures has risen in line with the worsening European debt crisis.”
The US MMFs have awesome influence:
The eight largest prime U.S. money- market mutual funds cut holdings in French banks by 68 percent in November, shifting investments to Swiss, Swedish, Canadian and Japanese banks.
French bank holdings declined by $11.7 billion to $5.56 billion, according to an analysis of fund disclosures by the Bloomberg Risk newsletter. The eight funds have reduced French bank debt by $76.8 billion in the past 12 months.
Senator Snowe is upset with Amazon:
Amazon.com Inc. (AMZN) should end its price- checking promotion because it gives consumers an incentive to gather price data from small retailers and leave stores without spending money, said Senator Olympia Snowe.
The world’s largest online retailer is offering a 5 percent discount to entice users to try a new mobile application that compares prices with physical retailers. The app, called Price Check, allows shoppers to look up Amazon’s prices by scanning products at a store using their phones.
“Amazon’s promotion — paying consumers to visit small businesses and leave empty-handed — is an attack on Main Street businesses that employ workers in our communities,” Snowe, a Maine Republican, said in a statement yesterday. “Small businesses are fighting everyday to compete with giant retailers, such as Amazon, and incentivizing consumers to spy on local shops is a bridge too far.”
That’s right, Senator, competition is un-American.
However, the issue highlights something I’ve been pondering for the past ten-odd years: what is the future of retail? I have a friend who retails computers: he pays more for his inventory than a retail customer can buy for at the big guys. And we’re seeing more and more of this type of thing all of the time.
My suspicion is that retail stores will eventually become show-rooms. For anything that’s not perishable, you’ll go into a store, look at the merchandise and if you like it – you’ll place an order. Then you pick it up a week later – or, perhaps, have it delivered for an extra five bucks.
There’s aways a possibility that retail will disappear completely – for non-perishable items – but I don’t think that will happen. You can’t covet what you don’t know about and people always want to see things. So manufacturers (like Apple) and distributors (like Amazon) will (i) obviously, pay a commission on sales, and (ii) pay a fee for shelf space (which has been the case for years in the grocery industry and, I’m sure, lots of other places). Maybe it’s a relatively low shelf-space fee, then a huge commission on the first sale or two, then the regular commission on more; just to keep the retailers honest.
Doesn’t this make sense? Why should I pay an extra $100 for a television, just so that Future Shop can keep fifty of each model stacked behind their enormous store on expensive urban land? Is it really worth that much to get same-day delivery of my television?
It was a mixed day for the Canadian preferred share market, with PerpetualDiscounts gaining 7bp, FixedResets down 3bp and DeemedRetractibles winning 8bp. Volatility was OK. Volume was very 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 | -0.9941 % | 2,052.5 |
| FixedFloater | 4.79 % | 4.50 % | 35,352 | 17.23 | 1 | 1.7949 % | 3,220.0 |
| Floater | 3.23 % | 3.52 % | 65,370 | 18.40 | 3 | -0.9941 % | 2,216.2 |
| OpRet | 4.90 % | 1.51 % | 59,626 | 1.43 | 6 | -0.1664 % | 2,473.5 |
| SplitShare | 5.79 % | 6.57 % | 59,850 | 5.12 | 3 | 0.3249 % | 2,534.6 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.1664 % | 2,261.8 |
| Perpetual-Premium | 5.51 % | 3.11 % | 91,299 | 0.86 | 18 | 0.0348 % | 2,161.7 |
| Perpetual-Discount | 5.23 % | 5.16 % | 105,461 | 14.89 | 12 | 0.0689 % | 2,313.0 |
| FixedReset | 5.10 % | 3.08 % | 223,008 | 2.50 | 64 | -0.0282 % | 2,340.4 |
| Deemed-Retractible | 5.03 % | 4.28 % | 194,789 | 3.32 | 46 | 0.0818 % | 2,230.0 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| PWF.PR.A | Floater | -2.56 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-12-09 Maturity Price : 19.00 Evaluated at bid price : 19.00 Bid-YTW : 2.78 % |
| CIU.PR.A | Perpetual-Discount | -1.26 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-12-09 Maturity Price : 23.76 Evaluated at bid price : 24.25 Bid-YTW : 4.75 % |
| CIU.PR.B | FixedReset | -1.25 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-06-01 Maturity Price : 25.00 Evaluated at bid price : 26.91 Bid-YTW : 3.55 % |
| HSB.PR.C | Deemed-Retractible | 1.06 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2013-06-30 Maturity Price : 25.25 Evaluated at bid price : 25.63 Bid-YTW : 4.71 % |
| GWO.PR.M | Deemed-Retractible | 1.13 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.99 Bid-YTW : 5.28 % |
| BAM.PR.G | FixedFloater | 1.79 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-12-09 Maturity Price : 25.00 Evaluated at bid price : 19.85 Bid-YTW : 4.50 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| ENB.PR.D | FixedReset | 66,136 | Recent new issue. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-12-09 Maturity Price : 23.16 Evaluated at bid price : 25.17 Bid-YTW : 3.61 % |
| RY.PR.H | Deemed-Retractible | 65,510 | Nesbitt crossed 60,000 at 26.80. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-05-24 Maturity Price : 26.00 Evaluated at bid price : 26.75 Bid-YTW : 3.55 % |
| MFC.PR.E | FixedReset | 51,240 | Nesbitt bought 16,500 from RBC at 25.70. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-09-19 Maturity Price : 25.00 Evaluated at bid price : 25.79 Bid-YTW : 4.35 % |
| BNS.PR.Z | FixedReset | 36,145 | Nesbitt bought 12,400 from RBC at 25.00. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.97 Bid-YTW : 3.17 % |
| RY.PR.I | FixedReset | 33,837 | TD crossed 25,200 at 26.06. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-02-24 Maturity Price : 25.00 Evaluated at bid price : 26.05 Bid-YTW : 3.13 % |
| TD.PR.Q | Deemed-Retractible | 26,500 | Scotia crossed 25,000 at 26.82. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-01-31 Maturity Price : 26.00 Evaluated at bid price : 26.84 Bid-YTW : 3.01 % |
| There were 19 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| CIU.PR.A | Perpetual-Discount | Quote: 24.25 – 24.82 Spot Rate : 0.5700 Average : 0.4026 YTW SCENARIO |
| CIU.PR.B | FixedReset | Quote: 26.91 – 27.45 Spot Rate : 0.5400 Average : 0.4223 YTW SCENARIO |
| PWF.PR.A | Floater | Quote: 19.00 – 20.00 Spot Rate : 1.0000 Average : 0.8882 YTW SCENARIO |
| GWO.PR.M | Deemed-Retractible | Quote: 25.99 – 26.30 Spot Rate : 0.3100 Average : 0.2142 YTW SCENARIO |
| BAM.PR.O | OpRet | Quote: 25.65 – 26.10 Spot Rate : 0.4500 Average : 0.3557 YTW SCENARIO |
| GWO.PR.J | FixedReset | Quote: 26.41 – 26.74 Spot Rate : 0.3300 Average : 0.2407 YTW SCENARIO |