The Greek crisis is resolved! Or is it?:
Seven months of negotiations ended in the pre-dawn hours in Brussels with Greece winning 130 billion euros ($172 billion) in aid it needs to avoid a March bankruptcy. Any respite may prove temporary after it signed up to a program of austerity and economic reform aimed at slashing debt to 120.5 percent of gross domestic product by 2020 from about 160 percent last year.
Even with investors and central bankers chipping in to relieve the debt burden, economists from Citigroup Inc. to Commerzbank AG concluded Greece may again fail to deliver amid a fifth year of recession, looming elections and social unrest. The upshot could be the removal of aid and renewed debate over the merits of fresh assistance before year-end as policy makers shift toward doing more to inoculate the rest of Europe.
I think all they’re doing is providing the incubator for the next Hitler. I wonder what this one will be like. Fortunately, Greece isn’t as large or industrialized or revanchist as 1930 Germany … except for maybe Macedonia.
The internal report isn’t too cheery:
Experts from the European Commission, the European Central Bank and the International Monetary Fund highlighted the risks and questioned the assumption that Greece will be able to return to capital markets in the coming years.
“There is a fundamental tension between the program objectives of reducing debt and improving competitiveness, in that the internal devaluation needed to restore Greece’s competitiveness will inevitably lead to a higher debt to GDP ratio in the near term,” the analysis said.
“Given the risks, the Greek program may thus remain accident-prone, with questions about sustainability hanging over it.”
However, the Europeans are trying very hard to prove the truth of the maxim: Don’t invest in European sovereigns unless you’ve got a little bit of insider pull:
Euro-area central banks will swap the Greek bonds in their investment portfolios for similar securities to avoid enforced losses during a debt restructuring, a euro-area official said.
The swap will happen today and is identical to one the European Central Bank carried out last week with the Greek bonds acquired in its asset-purchase program, the official said. The new Greek bonds will be immune to collective action clauses, or CACs, ensuring central banks don’t incur any losses when a private-sector debt write-down takes place, the official said on condition of anonymity. A spokesman for the Frankfurt-based ECB declined to comment.
The Canadian preferred share market came back a little today,with PerpetualPremiums winning 13bp, FixedResets gaining 7bp and DeemedRetractibles up 5bp. Reasonable volatility, with the Performance Highlights table skewed towards the upside and to insurance issues. Volume was a little above average.
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
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| 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 | 0.4817 % | 2,387.3 |
| FixedFloater | 4.62 % | 4.00 % | 38,366 | 17.32 | 1 | -1.6276 % | 3,373.1 |
| Floater | 2.80 % | 3.03 % | 58,003 | 19.60 | 3 | 0.4817 % | 2,577.7 |
| OpRet | 4.90 % | 2.76 % | 59,881 | 1.25 | 6 | -0.2490 % | 2,499.3 |
| SplitShare | 5.30 % | -0.90 % | 81,978 | 0.80 | 4 | 0.1905 % | 2,664.7 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.2490 % | 2,285.4 |
| Perpetual-Premium | 5.40 % | 3.52 % | 114,833 | 0.19 | 26 | 0.1326 % | 2,195.5 |
| Perpetual-Discount | 5.17 % | 5.21 % | 74,890 | 15.06 | 4 | 0.3506 % | 2,389.0 |
| FixedReset | 5.07 % | 2.86 % | 211,753 | 2.28 | 65 | 0.0696 % | 2,374.5 |
| Deemed-Retractible | 4.96 % | 3.81 % | 199,140 | 2.96 | 45 | 0.0543 % | 2,285.6 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| SLF.PR.H | FixedReset | -1.96 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.55 Bid-YTW : 4.58 % |
| BAM.PR.G | FixedFloater | -1.63 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-02-21 Maturity Price : 21.60 Evaluated at bid price : 20.55 Bid-YTW : 4.00 % |
| GWO.PR.G | Deemed-Retractible | 1.00 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2013-12-31 Maturity Price : 25.00 Evaluated at bid price : 25.25 Bid-YTW : 5.08 % |
| CIU.PR.A | Perpetual-Premium | 1.10 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-02-21 Maturity Price : 24.42 Evaluated at bid price : 24.71 Bid-YTW : 4.65 % |
| BAM.PR.N | Perpetual-Discount | 1.24 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-02-21 Maturity Price : 23.15 Evaluated at bid price : 23.59 Bid-YTW : 5.09 % |
| MFC.PR.D | FixedReset | 1.25 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-06-19 Maturity Price : 25.00 Evaluated at bid price : 26.65 Bid-YTW : 3.43 % |
| MFC.PR.B | Deemed-Retractible | 1.39 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.32 Bid-YTW : 5.52 % |
| PWF.PR.A | Floater | 1.40 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-02-21 Maturity Price : 21.54 Evaluated at bid price : 21.80 Bid-YTW : 2.39 % |
| PWF.PR.K | Perpetual-Premium | 1.56 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-02-21 Maturity Price : 24.16 Evaluated at bid price : 24.68 Bid-YTW : 5.03 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| RY.PR.D | Deemed-Retractible | 74,555 | TD crossed 50,000 at 25.56. YTW SCENARIO Maturity Type : Call Maturity Date : 2016-02-24 Maturity Price : 25.00 Evaluated at bid price : 25.56 Bid-YTW : 3.91 % |
| TD.PR.I | FixedReset | 65,417 | TD crossed 50,000 at 27.05. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-31 Maturity Price : 25.00 Evaluated at bid price : 27.13 Bid-YTW : 2.79 % |
| MFC.PR.D | FixedReset | 58,725 | RBC crossed 13,000 at 26.72. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-06-19 Maturity Price : 25.00 Evaluated at bid price : 26.65 Bid-YTW : 3.43 % |
| RY.PR.Y | FixedReset | 53,476 | RBC crossed 49,100 at 27.25. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-11-24 Maturity Price : 25.00 Evaluated at bid price : 27.16 Bid-YTW : 2.83 % |
| RY.PR.P | FixedReset | 51,755 | TD crossed 50,000 at 26.77. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-02-24 Maturity Price : 25.00 Evaluated at bid price : 26.72 Bid-YTW : 2.71 % |
| BMO.PR.J | Deemed-Retractible | 50,102 | Nesbitt crossed 22,400 at 25.70. YTW SCENARIO Maturity Type : Call Maturity Date : 2016-02-25 Maturity Price : 25.00 Evaluated at bid price : 25.65 Bid-YTW : 3.81 % |
| There were 36 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| BAM.PR.G | FixedFloater | Quote: 20.55 – 21.00 Spot Rate : 0.4500 Average : 0.2966 YTW SCENARIO |
| GWO.PR.M | Deemed-Retractible | Quote: 26.18 – 26.59 Spot Rate : 0.4100 Average : 0.2624 YTW SCENARIO |
| BAM.PR.K | Floater | Quote: 17.07 – 17.49 Spot Rate : 0.4200 Average : 0.2937 YTW SCENARIO |
| MFC.PR.C | Deemed-Retractible | Quote: 22.76 – 23.08 Spot Rate : 0.3200 Average : 0.2058 YTW SCENARIO |
| PWF.PR.I | Perpetual-Premium | Quote: 25.46 – 25.80 Spot Rate : 0.3400 Average : 0.2305 YTW SCENARIO |
| RY.PR.C | Deemed-Retractible | Quote: 25.71 – 26.02 Spot Rate : 0.3100 Average : 0.2081 YTW SCENARIO |