Moody’s has a good idea:
Governments, which have been criticizing credit-rating companies over sovereign-debt downgrades, should start a competing firm, according to Moody’s Corp. (MCO) Chief Executive Officer Ray McDaniel.
“Public institutions that have both the expertise and credibility among market participants should provide credit views on sovereigns,” McDaniel wrote today in a paper called “A Solution for the Credit Rating Agency Debate” that was posted on the New York-based company’s website.
European lawmakers have blamed Moody’s, Standard & Poor’s and Fitch Ratings for complicating efforts to resolve the region’s debt crisis by cutting countries’ ratings, leading the European Union to adopt tougher regulations. While some have considered prohibiting the companies from publishing their opinions, that won’t stop investors from speculating on creditworthiness, McDaniel said.
Looking to see how much credibility and influence a government-run CRA would have would be a hoot!
Spend-Every-Penny said something sensible today:
“I find it a bit odd that some of the bank executives are taking the position that the minister of finance or the government somehow should tell them how to run their business,” Flaherty said during an appearance in Stittsville, Ont., just west of Ottawa.
“We have bank executives in Canada going and saying ‘really, the rules on insured mortgages should be tightened up.’ They must forget that they are actually the ones that issue the mortgages. It’s their market. It’s not my market. They decide what they want to charge in interest rates.
“They’re the ones that make the profits out of this business, so I do find it a bit much when some of the bank executives turn to the government … and say ‘you ought to change the rules and make it tighter.’ It’s very interesting commentary from them.”
Downtown members of Toronto Shitty Council were able to record a political victory today over Mayor Rob Ford. All they had to do was throw Scarborough under the bus streetcar LRT and destroy city finances! Bargain! In related news, daredevil Star reporter Kate Allen was able to drive 6.5 km along St. Clair in only twenty minutes! I’m surprised she didn’t get a ticket!
It was another down day for the Canadian preferred share market, with PerpetualPremiums losing 19bp, FixedResets off 1bp and DeemedRetractibles down 9bp. However, the Performance Highlights table is fairly short. Volume was on the low side of average.
| 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 | 0.0191 % | 2,399.8 |
| FixedFloater | 4.54 % | 3.93 % | 38,000 | 17.38 | 1 | 0.0000 % | 3,432.2 |
| Floater | 3.01 % | 2.98 % | 45,171 | 19.77 | 3 | 0.0191 % | 2,591.1 |
| OpRet | 4.93 % | 3.34 % | 50,517 | 1.24 | 6 | 0.0129 % | 2,497.2 |
| SplitShare | 5.29 % | -3.06 % | 83,292 | 0.73 | 4 | -0.0100 % | 2,673.0 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0129 % | 2,283.5 |
| Perpetual-Premium | 5.44 % | 3.32 % | 101,274 | 1.49 | 25 | -0.1933 % | 2,203.5 |
| Perpetual-Discount | 5.20 % | 5.26 % | 190,172 | 15.06 | 7 | -0.5381 % | 2,381.8 |
| FixedReset | 5.07 % | 3.21 % | 194,921 | 2.25 | 67 | -0.0057 % | 2,375.0 |
| Deemed-Retractible | 4.98 % | 4.07 % | 209,887 | 3.08 | 46 | -0.0892 % | 2,289.1 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| CIU.PR.A | Perpetual-Premium | -2.88 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-03-22 Maturity Price : 23.67 Evaluated at bid price : 23.94 Bid-YTW : 4.83 % |
| BAM.PR.N | Perpetual-Discount | -2.49 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-03-22 Maturity Price : 22.02 Evaluated at bid price : 22.33 Bid-YTW : 5.32 % |
| BAM.PR.P | FixedReset | 1.02 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-09-30 Maturity Price : 25.00 Evaluated at bid price : 26.85 Bid-YTW : 3.86 % |
| RY.PR.Y | FixedReset | 1.09 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-11-24 Maturity Price : 25.00 Evaluated at bid price : 26.90 Bid-YTW : 3.32 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| RY.PR.N | FixedReset | 78,478 | TD crossed 25,000 at 26.50. Scotia bought two blocks of 10,000 each from National at 26.50, then crossed 25,000 at 26.51. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-02-24 Maturity Price : 25.00 Evaluated at bid price : 26.52 Bid-YTW : 3.25 % |
| TD.PR.Y | FixedReset | 66,301 | TD crossed 64,000 at 26.15. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-10-31 Maturity Price : 25.00 Evaluated at bid price : 26.06 Bid-YTW : 2.86 % |
| BAM.PF.A | FixedReset | 55,170 | Recent new issue. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-03-22 Maturity Price : 23.08 Evaluated at bid price : 24.97 Bid-YTW : 4.45 % |
| ENB.PR.F | FixedReset | 43,619 | YTW SCENARIO Maturity Type : Call Maturity Date : 2018-06-01 Maturity Price : 25.00 Evaluated at bid price : 25.30 Bid-YTW : 3.93 % |
| RY.PR.T | FixedReset | 31,159 | RBC crossed 25,000 at 26.90. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-08-24 Maturity Price : 25.00 Evaluated at bid price : 26.92 Bid-YTW : 3.17 % |
| RY.PR.R | FixedReset | 28,621 | RBC crossed 24,900 at 26.60. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-02-24 Maturity Price : 25.00 Evaluated at bid price : 26.60 Bid-YTW : 3.08 % |
| There were 27 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| FTS.PR.E | OpRet | Quote: 26.25 – 27.11 Spot Rate : 0.8600 Average : 0.6410 YTW SCENARIO |
| PWF.PR.O | Perpetual-Premium | Quote: 26.20 – 26.69 Spot Rate : 0.4900 Average : 0.3246 YTW SCENARIO |
| RY.PR.L | FixedReset | Quote: 26.27 – 26.54 Spot Rate : 0.2700 Average : 0.1631 YTW SCENARIO |
| SLF.PR.E | Deemed-Retractible | Quote: 22.41 – 22.64 Spot Rate : 0.2300 Average : 0.1428 YTW SCENARIO |
| GWO.PR.L | Deemed-Retractible | Quote: 25.52 – 25.77 Spot Rate : 0.2500 Average : 0.1734 YTW SCENARIO |
| BAM.PR.N | Perpetual-Discount | Quote: 22.33 – 22.58 Spot Rate : 0.2500 Average : 0.1736 YTW SCENARIO |