Bernanke upped the stakes in the fiscal cliff negotiations:
Federal Reserve Chairman Ben S. Bernanke said that an agreement on ways to reduce long-term federal budget deficits could remove an impediment to growth, while failure to avoid the so-called fiscal cliff would pose a “substantial threat” to the recovery.
“Cooperation and creativity to deliver fiscal clarity — in particular, a plan for resolving the nation’s longer-term budgetary issues without harming the recovery — could help make the new year a very good one for the American economy,” Bernanke said today in a speech in New York. “The realization of all of the automatic tax increases and spending cuts that make up the fiscal cliff, absent offsetting changes, would pose a substantial threat to the recovery.”
One of the guys caught up in the SEC’s war against capital markets has come out OK:
Brian Stoker, who fended off regulators’ claims that he helped Citigroup Inc. (C) mislead investors in a $1 billion deal, has joined StormHarbour Securities LP in a sales position.
Stoker, 41, will focus on the sale of structured products such as collateralized debt obligations, or CDOs, and mortgage- backed securities, according to Sohail Khan, a StormHarbour managing principal and former Citigroup executive. Stoker started yesterday as a managing director and will have more responsibilities “over time,” Khan said.
The hire comes three months after a jury cleared Stoker of any wrongdoing in a $1 billion CDO offering Citigroup sold in 2007. The U.S. Securities and Exchanges Commission alleged that the New York-based bank failed to tell investors that it had picked about half of the CDO’s underlying assets and was betting they’d decline. Stoker, who helped to structure the deal, argued that he wasn’t responsible for the way the deal was pitched to investors.
As I have noted several times before, perhaps it would help if all future prospectuses contained twenty pages of legalese to the effect that all of a fund’s assets have been sold to it by somebody else.
Fabulous Fab is still awaiting vindication:
U.S. District Judge Katherine Forrest in Manhattan, who took over the case from her colleague Barbara Jones last month, rejected the SEC’s argument that a recent court decision made a $150 million note sale to Germany’s IKB Deutsche Industriebank AG sufficiently “domestic” to give her jurisdiction.
Monday’s decision does not affect the rest of the SEC’s lawsuit against Tourre, which arose from charges filed against him and Goldman in April 2010.
In an astonishing developement, it appears Greece will need more debt write-offs before it stabilizes:
Greece’s debt cannot be cut to 120 per cent of GDP by 2020, the level deemed sustainable by the IMF, unless euro-zone member states write off a portion of their loans to Greece, a document prepared for finance ministers shows.
The 15-page document, circulated among ministers, the European Central Bank and the International Monetary Fund for a meeting that began on Tuesday and took more than 10 hours, sets out in black-and-white how far off-track Greece is in reducing its debt to the IMF-imposed target, from the current level of around 170 per cent of GDP.
Even more surprisingly, this resulted in the scheduling of an emergency meeting:
European finance ministers failed to agree on a debt-reduction package for Greece after battling with the International Monetary Fund over how to nurse the recession- wracked country back to fiscal health.
With creditors led by Germany refusing to put up fresh money or offer debt relief, the finance chiefs were unable to scrounge together enough funds from other sources to help alleviate Greece’s debt burden, set to hit 190 percent of gross domestic product in 2014.
More than 11 hours of talks broke up early today in Brussels with praise for the Athens government’s economic overhaul and a declaration that an accord on the financing package will wait at least until a hastily arranged meeting of the ministers on Nov. 26.
In today’s laugh from Ottawa, the Junior Republicans are accusing the Dippers of having sound economic policy, which they deny:
The Conservatives have a new line of attack when it comes to the NDP, using television panels and Question Period exchanges to claim the Official Opposition is advocating a GST hike.
The NDP say the Conservatives are lying.
It was a suddenly negative day for the Canadian preferred share market as it welcomed the new ETF (ZPR), with PerpetualPremiums losing 26bp, FixedResets down 21bp and DeemedRetractibles off 16bp. Volatility was average. 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 |
|||||||
| 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 | 0.1073 % | 2,455.6 |
| FixedFloater | 4.19 % | 3.53 % | 29,610 | 18.25 | 1 | -0.2198 % | 3,844.9 |
| Floater | 2.81 % | 3.02 % | 54,324 | 19.64 | 4 | 0.1073 % | 2,651.4 |
| OpRet | 4.61 % | 0.71 % | 36,719 | 0.60 | 4 | -0.0475 % | 2,590.9 |
| SplitShare | 5.44 % | 4.82 % | 59,086 | 4.47 | 3 | 0.4429 % | 2,861.1 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0475 % | 2,369.1 |
| Perpetual-Premium | 5.26 % | 2.74 % | 73,204 | 0.44 | 30 | -0.2659 % | 2,314.9 |
| Perpetual-Discount | 4.86 % | 4.90 % | 100,939 | 15.58 | 3 | 0.1912 % | 2,619.9 |
| FixedReset | 4.99 % | 3.06 % | 199,707 | 4.15 | 75 | -0.2131 % | 2,445.1 |
| Deemed-Retractible | 4.91 % | 3.57 % | 123,211 | 1.07 | 46 | -0.1571 % | 2,397.8 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| BAM.PF.B | FixedReset | -1.73 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-11-20 Maturity Price : 23.12 Evaluated at bid price : 25.06 Bid-YTW : 3.92 % |
| MFC.PR.F | FixedReset | -1.02 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.25 Bid-YTW : 3.67 % |
| BMO.PR.J | Deemed-Retractible | 1.01 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2013-02-25 Maturity Price : 25.75 Evaluated at bid price : 26.06 Bid-YTW : -0.38 % |
| BNA.PR.C | SplitShare | 1.12 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2019-01-10 Maturity Price : 25.00 Evaluated at bid price : 24.35 Bid-YTW : 4.83 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| BMO.PR.Q | FixedReset | 156,985 | RBC crossed 20,000 at 25.15; National crossed 75,000 at the same price; Desjardins crossed 20,000 at the same price again. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.12 Bid-YTW : 3.01 % |
| RY.PR.B | Deemed-Retractible | 79,324 | RBC crossed 75,000 at 25.70. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-08-24 Maturity Price : 25.50 Evaluated at bid price : 25.70 Bid-YTW : 3.53 % |
| TD.PR.S | FixedReset | 63,562 | Desjardins crossed 47,400 at 24.90. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.81 Bid-YTW : 3.19 % |
| FTS.PR.J | Perpetual-Premium | 51,533 | Recent new issue. YTW SCENARIO Maturity Type : Call Maturity Date : 2021-12-01 Maturity Price : 25.00 Evaluated at bid price : 25.19 Bid-YTW : 4.68 % |
| SLF.PR.I | FixedReset | 43,189 | TD crossed 25,000 at 26.00. YTW SCENARIO Maturity Type : Call Maturity Date : 2016-12-31 Maturity Price : 25.00 Evaluated at bid price : 25.93 Bid-YTW : 3.45 % |
| SLF.PR.H | FixedReset | 30,775 | Scotia crossed 25,000 at 25.05. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.05 Bid-YTW : 3.71 % |
| There were 34 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| TRP.PR.A | FixedReset | Quote: 25.33 – 25.65 Spot Rate : 0.3200 Average : 0.1968 YTW SCENARIO |
| GWO.PR.N | FixedReset | Quote: 24.06 – 24.39 Spot Rate : 0.3300 Average : 0.2240 YTW SCENARIO |
| MFC.PR.F | FixedReset | Quote: 24.25 – 24.60 Spot Rate : 0.3500 Average : 0.2584 YTW SCENARIO |
| CM.PR.D | Perpetual-Premium | Quote: 25.88 – 26.06 Spot Rate : 0.1800 Average : 0.1042 YTW SCENARIO |
| NA.PR.P | FixedReset | Quote: 26.25 – 26.60 Spot Rate : 0.3500 Average : 0.2742 YTW SCENARIO |
| RY.PR.T | FixedReset | Quote: 26.66 – 26.94 Spot Rate : 0.2800 Average : 0.2060 YTW SCENARIO |