Good news! The CEO of RBS says LIBOR rigging isn’t his fault:
Royal Bank of Scotland confirmed for the first time on Friday it had dismissed staff over an interest rate rigging scandal but the bank gave no indication whether it might settle soon with investigators.
Reporting a drop in first-half operating profit, RBS said it was co-operating with governments and regulators which are investigating the role of a number of banks in the setting of Libor and other inter-bank lending rates.
“I think that the regulators must decide how they want to deal with the situation. We will stand up and take any punishment that comes our way,” Chief Executive Stephen Hester said. He said he believed the Libor issue had been a result of “wrongdoing by individuals” rather than a “systemic problem” within the industry.
“The Libor situation is a stark reminder of the damage that individual wrongdoing and inadequate systems and controls can have in terms of financial and reputational impact.”
The inadequate systems and controls aren’t his fault, either. Me, I blame society.
There’s an interesting piece in the Globe about corporate cash in Canada:
“Corporate businesses are flush with cash, which they still seem hesitant to deploy, presumably due to the uncertain economic outlook,” said David Madani, Canadian economist for the London-based research firm [Capital Economics]. “This obviously leaves scope for firms to increase dividends, which could boost personal income and consumption significantly.”
In a recent research note, Mr. Madani said Canada’s non-financial-sector corporate cash balances stood at $526-billion at the beginning of 2012 – up 42 per cent since the recession ended in mid-2009. Since the Canadian economy is roughly one-tenth the size of our U.S. neighbour, this Canadian cash pile, in relative terms, dwarfs the roughly $1.3-trillion (U.S.) in cash held by U.S. corporations.
The US had a better than expected jobs number, albeit not “good”:
The payrolls increase of 163,000 followed a revised 64,000 gain in June, Labor Department figures showed today in Washington. The median estimate of 89 economists surveyed by Bloomberg called for a gain of 100,000. The jobless rate, based on a separate survey of households, climbed to a five-month high of 8.3 percent
I don’t understand all this anger management stuff:
A survey published in American Journal of Nursing in 2002, reported that 90 percent of hospital workers, including doctors and nurses, reported “yelling,” “abusive language” as well as “condescension” and “berating colleagues.” A quarter of the 1,200 people surveyed said they witnessed such behavior weekly.
“There isn’t a doctor alive who hasn’t seen it,” says William Norcross, executive director of a program at the University of California at San Diego that uses anger management to treat irascible physicians.
Medical professionals present [anger management guru George] Anderson with unique challenges. Their hours are brutal, the stakes are high, and the threat of malpractice suits is ever-present. The life-or-death nature of the work wears at steely nerves even on the best days, Anderson says.
If things have got to the point where you have to yell at your staff, the sensible thing to do is fire them instead. If you don’t have the authority to fire them … well, then you don’t have the authority to yell at them either, do you?
This sort of prima-donna behaviour was one of the things that took down RT Capital Management back in about 2000 – big-shot portfolio managers yelling at the back-office. Why is there “a program at the University of California at San Diego that uses anger management to treat irascible physicians”?
I’ve got a better idea: you yell at my staff, you’re fired. No matter how good you are at your tiny little specialty, you’re no good at all without good support staff … right down to the janitor who keeps the washroom clean, and if the support staff hates their jobs, they’re not going to do them very well. Sorry, buddy, but your hospital privileges are withdrawn. These guys indulge in their temper tantrums for the same reason bratty five-year-olds do: because there are no repercussions.
So, I finally got everything working again, with the proviso that I’m back to where I started and the conversion of the HIMIPref™ Web Services from Visual C++ 2002 to Visual C++ 2010 has been delayed. What a total nightmare. Everything worked just fine under VC 2002 … but VC 2002 won’t run under Windows 7.
Like everybody else, I have a love-hate relationship with Microsoft … some of their design decisions drive me nuts, but whenever I compare one of their products to its competitor, they almost always come out on top. Spreadsheets … C++ compilers … operating systems … the only exception I can remember is Rapid Application Development software, in which I consider Visual Basic to be pretty horrible – and that’s almost certainly because they insist that it be usuable throughout their entire suite of software.
So their tools are first class, but they’ve got a problem: there is, as far as I can tell, an institutional culture that supposes that because they do development in teams numbering in the hundreds – and because they guys they talk to also have huge development teams – that’s the way it works everywhere. It doesn’t. Lots of programming gets done in small shops (like mine!). I don’t need ultra-finicky version control! I can do all my version control on the back of an envelope! I don’t have a full time staff member in charge of compiling, who has daily meetings with the guy who does version control! But they think I do, so there are all kinds of finicky adjustments to be made to compiler settings and version control that all have to agree with each other or the damn thing blows up. And there’s no “Turn Off Version Control” setting on the damn compiler.
Such is life.
It was a slightly negative day for the Canadian preferred share market, with PerpetualPremiums down 4bp, and both FixedResets and DeemedRetractibles off 2bp. Volatility was muted. Volume was ridiculously low – there’s usually more volume on Christmas Eve!
| 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 | -0.1410 % | 2,289.7 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.1410 % | 3,425.1 |
| Floater | 3.18 % | 3.20 % | 63,371 | 19.20 | 3 | -0.1410 % | 2,472.2 |
| OpRet | 4.77 % | 2.41 % | 32,762 | 0.88 | 5 | -0.2145 % | 2,530.5 |
| SplitShare | 5.48 % | 4.98 % | 67,331 | 4.65 | 3 | -0.2793 % | 2,759.4 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.2145 % | 2,313.9 |
| Perpetual-Premium | 5.30 % | 3.93 % | 104,247 | 1.16 | 28 | -0.0417 % | 2,272.2 |
| Perpetual-Discount | 4.97 % | 4.95 % | 103,011 | 15.54 | 3 | 0.0558 % | 2,515.9 |
| FixedReset | 4.99 % | 3.07 % | 180,934 | 3.95 | 71 | -0.0223 % | 2,422.4 |
| Deemed-Retractible | 4.95 % | 3.36 % | 141,628 | 1.20 | 46 | -0.0238 % | 2,352.0 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| BAM.PR.T | FixedReset | -1.32 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-08-03 Maturity Price : 23.33 Evaluated at bid price : 25.46 Bid-YTW : 3.65 % |
| HSE.PR.A | FixedReset | 1.24 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-08-03 Maturity Price : 23.62 Evaluated at bid price : 26.12 Bid-YTW : 2.99 % |
| GWO.PR.I | Deemed-Retractible | 1.44 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.98 Bid-YTW : 5.13 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| MFC.PR.I | FixedReset | 75,605 | Scotia crossed 27,300 at 25.05; RBC crossed 25,000 at 25.15. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.05 Bid-YTW : 4.42 % |
| HSB.PR.D | Deemed-Retractible | 51,345 | National Bank crossed 46,500 at 25.90. YTW SCENARIO Maturity Type : Call Maturity Date : 2012-12-31 Maturity Price : 25.50 Evaluated at bid price : 25.80 Bid-YTW : 3.13 % |
| BNS.PR.Z | FixedReset | 37,153 | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.11 Bid-YTW : 3.03 % |
| MFC.PR.G | FixedReset | 34,000 | RBC crossed 25,000 at 25.45. YTW SCENARIO Maturity Type : Call Maturity Date : 2016-12-19 Maturity Price : 25.00 Evaluated at bid price : 25.38 Bid-YTW : 4.17 % |
| IFC.PR.A | FixedReset | 25,337 | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.64 Bid-YTW : 3.50 % |
| ENB.PR.N | FixedReset | 21,484 | Recent new issue. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-08-03 Maturity Price : 23.16 Evaluated at bid price : 25.20 Bid-YTW : 3.83 % |
| There were 8 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| TD.PR.K | FixedReset | Quote: 26.76 – 27.07 Spot Rate : 0.3100 Average : 0.1955 YTW SCENARIO |
| NA.PR.L | Deemed-Retractible | Quote: 25.56 – 25.84 Spot Rate : 0.2800 Average : 0.1924 YTW SCENARIO |
| PWF.PR.M | FixedReset | Quote: 26.10 – 26.40 Spot Rate : 0.3000 Average : 0.2239 YTW SCENARIO |
| BAM.PR.B | Floater | Quote: 16.65 – 16.89 Spot Rate : 0.2400 Average : 0.1697 YTW SCENARIO |
| IAG.PR.G | FixedReset | Quote: 25.51 – 25.75 Spot Rate : 0.2400 Average : 0.1842 YTW SCENARIO |
| PWF.PR.R | Perpetual-Premium | Quote: 26.41 – 26.60 Spot Rate : 0.1900 Average : 0.1342 YTW SCENARIO |