November 26, 2012

Lapdog Carney got a better job:

Bank of Canada Governor Mark Carney was unexpectedly named head of the Bank of England as the U.K. government looked abroad for a candidate untainted by financial turmoil to lead the beefed-up central bank.

Carney, a 47-year old former Goldman Sachs Group Inc. managing director, will become the first foreigner to run the 318-year-old institution as it absorbs new powers to oversee banks. He’ll replace Mervyn King from July as policy makers pursue record-low interest rates and asset-buying to propel the economy from its first double-dip recession since the 1970s.

“Carney is a surprise choice but he is a highly respected central banker,” said Philip Shaw, an economist at Investec Securities in London. “The Canadian banking system is widely regarded to be in good shape because of the Bank of Canada’s approach to regulation ahead of the credit crisis, and this may have been a factor in his appointment.”

In announcing his selection and seeking to get ahead of any criticism about his decision to look overseas for talent, Chancellor of the Exchequer George Osborne described Carney as “quite simply the best, most experienced and most qualified person in the world to do the job.”

Mr. Shaw will doubtless be surprised to learn that the BoC does not, in fact, regulate banks in Canada – that’s what OSFI pretends to do – as Dickson was very quick to point out:

“Mr. Carney brings tremendous credibility in this new role and I will miss his counsel as a member of the team of government agencies in Canada that work together in support of a sound and stable financial system.”

Now we are all on tenterhooks: will Carney be able to read Osborne’s handwriting properly when drafting speeches? Osborne & Cameron remind me of another political pair:

David Cameron has ruled out George Osborne giving up his political strategy role to focus on being Chancellor.

Despite fierce criticism of Mr Osborne for grim economic figures, the Prime Minister told colleagues that Downing Street and the Treasury working hand in hand was a ‘strength, not a weakness’.

But Lord Ryder, a former Tory chief whip, has claimed both men are ‘obsessed with management of 24-hour news’ and called for there to be a ‘full-time’ Chancellor.

Revenge of the nerds?:

Having left the heavy-lifting to technology companies until early this year, San Francisco’s non-tech employers are playing a growing role in the city’s labor recovery. Positions in everything from retail to construction to hospitality now comprise about 75 percent of the city’s job growth, helping the Northern Californian hub add jobs at among the fastest rates in the nation and reduce its unemployment rate to 6.5 percent.

San Francisco’s experience is also seen in broadening expansions in other U.S. technology centers such as Seattle and Boston, easing concerns that innovation would create work for only the most highly-skilled and highly-paid while others get left behind. Every new technology job in a city creates five additional local jobs outside the sector over time, according to an analysis by Enrico Moretti, an economics professor at the University of California, Berkeley.

“People were missing the big picture,” said Moretti, author of “The New Geography of Jobs” published in May. “Tech cannot offer jobs to the average worker, but every software engineer attracted to Twitter will indirectly support many more service jobs. My research suggests that this multiplier effect is particularly large for high-tech jobs.”

The OSC has released OSC Staff Notice 33-738: 2012 OSC Annual Summary Report for Dealers, Advisers and Investment Fund Managers. The associated NOTICE AND REQUEST FOR COMMENT ON PROPOSED AMENDMENTS TO NATIONAL INSTRUMENT 31-103

(v) Percentage return calculation method

We are proposing to mandate that registrants use the dollar-weighted method in calculating the percentage return on a client’s account or portfolio, in order to promote consistency and comparability in investor reporting from one registrant to another.

We had previously considered permitting registrants to choose between a time-weighted and dollar-weighted performance calculation method. We have decided to mandate the dollar-weighted method because it most accurately reflects the actual return of the client’s investments. This is in keeping with one of the main themes of the project — allowing investors to measure how their investments have performed.

Time-weighted methods are generally used to evaluate the registrant’s performance in managing an account, as the returns are calculated without taking into consideration any external cash flows. These methods isolate the portion of an account’s return that is attributable solely to the registrant’s actions. The philosophy behind time-weighted methods is that a registrant’s performance should be measured independently of external cash flows, because contributions and withdrawals by an investor are out of the registrant’s control.

– – – – – – – – – – – – – – – – – – – –

Issue for comment

We invite comments on the benefits and constraints of the proposal to mandate the use of the dollar-weighted method, in particular as they relate to providing meaningful information to investors.

We are not prohibiting the use of the time-weighted method, but if a registered firm uses such a method, it must be in addition to the dollar-weighted calculation.

Given the very well known tendency of investors to make bad timing decisions , this will probably result in a decline of most honestly reported performance figures. There is no indication as yet as to whether mutual funds will be bound by the same rules.

Some Ontario lawyers are saying there are too many lawyers:

In another vote Thursday, the council responded to a critical shortage of articling positions by creating an alternative path to the profession. It calls for four months of extra classroom education as well as an unpaid, co-op work placement.

During debate, some council members expressed misgivings about the competency of many students flocking to a legal career.

“The law schools are now sending us flood upon flood of students,” said lawyer Bradley Wright. “Because no one fails any more, being accepted into first-year law school guarantees you a call to the bar. … Just show up at the door and you will be accepted into our profession.”

I’ll believe it when prices come down.

The Canadian preferred share market suffered a small decline today, with PerpetualPremiums and FixedResets down 7bp and DeemedRetractibles off 2bp. Volatility was non-existent. Volume was average and dominated by ENB issues in the wake of the new issue announcement.

HIMIPref™ Preferred Indices
These values reflect the December 2008 revision of the HIMIPref™ Indices

Values are provisional and are finalized monthly
Index Mean
(at bid)
Mod Dur
Issues Day’s Perf. Index Value
Ratchet 0.00 % 0.00 % 0 0.00 0 0.0134 % 2,462.5
FixedFloater 4.20 % 3.55 % 28,066 18.21 1 0.0000 % 3,829.6
Floater 2.81 % 3.02 % 55,240 19.63 4 0.0134 % 2,658.8
OpRet 4.60 % 0.26 % 35,932 0.58 4 0.1139 % 2,598.3
SplitShare 5.44 % 4.77 % 60,949 4.45 3 -0.2509 % 2,856.9
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 0.1139 % 2,375.9
Perpetual-Premium 5.26 % 2.29 % 71,653 0.25 30 -0.0723 % 2,317.9
Perpetual-Discount 4.83 % 4.88 % 103,264 15.62 3 0.1357 % 2,635.3
FixedReset 4.99 % 2.99 % 205,705 4.18 75 -0.0724 % 2,450.5
Deemed-Retractible 4.90 % 3.21 % 119,796 0.65 46 -0.0224 % 2,405.1
Performance Highlights
Issue Index Change Notes
No individual gains or losses exceeding 1%!
Volume Highlights
Issue Index Shares
BNS.PR.P FixedReset 132,418 RBC bought blocks of 20,000 at 25.08 and 37,800 at 25.06 from Scotia, as well as crossing 30,000 at 25.08.
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 25.10
Bid-YTW : 3.44 %
ENB.PR.N FixedReset 113,700 Nesbitt crossed 60,000 at 25.20 and bought 10,000 from TD at 25.25.
Maturity Type : Limit Maturity
Maturity Date : 2042-11-26
Maturity Price : 23.18
Evaluated at bid price : 25.21
Bid-YTW : 3.81 %
HSE.PR.A FixedReset 108,450 RBC crossed 98,400 at 25.70.
Maturity Type : Limit Maturity
Maturity Date : 2042-11-26
Maturity Price : 23.54
Evaluated at bid price : 25.65
Bid-YTW : 2.99 %
ENB.PR.B FixedReset 97,981 RBC crossed 30,000 at 25.25.
Maturity Type : Limit Maturity
Maturity Date : 2042-11-26
Maturity Price : 23.28
Evaluated at bid price : 25.25
Bid-YTW : 3.60 %
ENB.PR.P FixedReset 82,222 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2042-11-26
Maturity Price : 23.14
Evaluated at bid price : 25.14
Bid-YTW : 3.71 %
ENB.PR.F FixedReset 73,983 Nesbitt bought 14,300 from Scotia at 25.25.
Maturity Type : Limit Maturity
Maturity Date : 2042-11-26
Maturity Price : 23.21
Evaluated at bid price : 25.26
Bid-YTW : 3.69 %
There were 34 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: 22.61 – 23.50
Spot Rate : 0.8900
Average : 0.6234

Maturity Type : Limit Maturity
Maturity Date : 2042-11-26
Maturity Price : 22.98
Evaluated at bid price : 22.61
Bid-YTW : 3.55 %

POW.PR.D Perpetual-Premium Quote: 25.35 – 25.69
Spot Rate : 0.3400
Average : 0.2119

Maturity Type : Call
Maturity Date : 2014-10-31
Maturity Price : 25.00
Evaluated at bid price : 25.35
Bid-YTW : 4.58 %

BNA.PR.D SplitShare Quote: 26.18 – 26.60
Spot Rate : 0.4200
Average : 0.3223

Maturity Type : Call
Maturity Date : 2012-12-26
Maturity Price : 26.00
Evaluated at bid price : 26.18
Bid-YTW : -3.95 %

GWO.PR.P Deemed-Retractible Quote: 26.52 – 26.75
Spot Rate : 0.2300
Average : 0.1518

Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 26.52
Bid-YTW : 4.72 %

BNA.PR.E SplitShare Quote: 25.09 – 25.50
Spot Rate : 0.4100
Average : 0.3402

Maturity Type : Hard Maturity
Maturity Date : 2017-12-10
Maturity Price : 25.00
Evaluated at bid price : 25.09
Bid-YTW : 4.77 %

PWF.PR.G Perpetual-Premium Quote: 25.40 – 25.60
Spot Rate : 0.2000
Average : 0.1342

Maturity Type : Call
Maturity Date : 2012-12-26
Maturity Price : 25.00
Evaluated at bid price : 25.40
Bid-YTW : -8.19 %

One Response to “November 26, 2012”

  1. […] November 26 I referred to Ontario lawyers’ claims that there were too many lawyers; I was interested to […]

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