Here’s another fascinating unintended consequence:
China’s one-child policy has produced adults that tend to have personality traits unsuited for starting businesses or managing companies, according to a study that adds to economic concerns surrounding the rule.
Using surveys of 421 men and women in Beijing and testing their skills in economic games, researchers in Australia found those born after the 1979 policy were more pessimistic, nervous, less conscientious, less competitive and more risk averse. They also found them to be 23 percent less prone to choose an occupation that entails business risk, such as becoming a stockbroker, entrepreneur or private firm manager.
Of course, criticizing the government is a form of risk – especially in China! – so perhaps the consequence was actually intended!
Penson Worldwide has filed for bankruptcy:
Penson Worldwide Inc. (PNSN), a provider of financial clearing services and related operational and technology products, filed for bankruptcy in Delaware with a plan to liquidate its business.
The Plano, Texas-based company listed both assets and debt of $100 million to $500 million in Chapter 11 documents filed today in U.S. Bankruptcy Court in Wilmington, Delaware. Chapter 11 is the section of the U.S. Bankruptcy Code used by companies to reorganize. In 2011, Penson had revenue of $217.3 million, court papers show.
“Average daily trading volume in equities fell by 5 percent in 2010 and 8 percent in 2011, and short selling continued to fall in each of the years from 2009 through 2011,” Bryce B. Engel, chief operating officer of Penson Worldwide, said in court papers.
The fall of Penson had implications for Northern Securities’ retail operations as discussed on December 14:
A subsidiary of Northern Financial Corp. is assigning client accounts to two unnamed brokerage firms under a consent order with IIROC.
The move by the subsidiary, Northern Investment Securities, will see investment advisers responsible for the accounts transferred to the new firms as well, Northern said in a release Monday.
The order was issued as a result of NSI being unable to obtain an alternative carrying broker or other alternative arrangement to replace Penson Financial Services Canada Inc., which is discontinuing its carrying broker business as of Dec. 31.
During a question-and-answer session at the KPMG 21st Annual Insurance Issues Conference, Julie Dickson of OSFI made an oblique defence of the 2008 Manulife Rule Change:
Well, in terms of capital, it’s a reality because all risk-based capital rules are, to some extent, pro-cyclical. And when risk goes up, required capital goes up. So it is part and parcel of the pro-cyclicality phenomenon. 2008 I think was a good example, where we noticed that capital was spiking. It’s OK for capital to rise as you enter a recession, but it was spiking with the decline in equity markets. And when we looked at how the rules worked, we realized that that was inappropriate because the formulas were requiring a lot of extra capital for obligations which were many, many years off. And that was felt to be, too risk sensitive. We didn’t think it appropriately reflected the risk, and made a change.
Bombardier – proud issuer of BBD.PR.B, BBD.PR.C and BBD.PR.D – has issued ten year notes at 6.125%.
Meanwhile, I see that HSBC Bank Canada – proud issuer of HSB.PR.C, HSB.PR.D and HSB.PR.E – has issued eight year deposit notes at 2.938%.
It was another mixed day for the Canadian preferred share market, with PerpetualPremiums gaining 2bp, FixedResets up 15bp and DeemedRetractibles off 6bp. Volatility was low. Volume was well 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 | 0.0797 % | 2,496.0 |
| FixedFloater | 4.29 % | 3.60 % | 29,735 | 18.19 | 1 | 0.1678 % | 3,791.9 |
| Floater | 2.79 % | 3.01 % | 60,278 | 19.71 | 4 | 0.0797 % | 2,695.1 |
| OpRet | 4.62 % | -1.46 % | 51,117 | 0.39 | 4 | -0.1143 % | 2,598.7 |
| SplitShare | 4.60 % | 4.57 % | 43,627 | 4.33 | 2 | 0.0000 % | 2,893.2 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.1143 % | 2,376.3 |
| Perpetual-Premium | 5.25 % | -1.87 % | 74,507 | 0.14 | 30 | 0.0181 % | 2,344.3 |
| Perpetual-Discount | 4.83 % | 4.86 % | 133,057 | 15.72 | 4 | -0.1414 % | 2,656.8 |
| FixedReset | 4.92 % | 2.90 % | 208,516 | 3.61 | 78 | 0.1459 % | 2,476.1 |
| Deemed-Retractible | 4.88 % | 0.12 % | 114,509 | 0.30 | 46 | -0.0563 % | 2,434.4 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| IFC.PR.C | FixedReset | -1.13 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2016-09-30 Maturity Price : 25.00 Evaluated at bid price : 26.35 Bid-YTW : 2.71 % |
| SLF.PR.I | FixedReset | 1.04 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2016-12-31 Maturity Price : 25.00 Evaluated at bid price : 26.25 Bid-YTW : 2.96 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| GWO.PR.H | Deemed-Retractible | 233,756 | Nesbitt crossed 225,400 at 25.20. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-09-30 Maturity Price : 25.00 Evaluated at bid price : 25.24 Bid-YTW : 4.39 % |
| BAM.PR.B | Floater | 210,235 | Nesbitt crossed 171,900 at 17.50; Desjardins crossed 26,200 at the same price. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-01-11 Maturity Price : 17.50 Evaluated at bid price : 17.50 Bid-YTW : 3.01 % |
| MFC.PR.B | Deemed-Retractible | 191,000 | RBC crossed 10,000, sold 16,400 to anonymous and sold 10,000 to Desjardins, all at 25.00. Desjardins crossed 100,000 at the same price. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.00 Bid-YTW : 4.72 % |
| RY.PR.R | FixedReset | 164,272 | TD crossed 160,200 at 26.45. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-02-24 Maturity Price : 25.00 Evaluated at bid price : 26.36 Bid-YTW : 2.07 % |
| MFC.PR.D | FixedReset | 125,921 | RBC crossed 120,000 at 26.50. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-06-19 Maturity Price : 25.00 Evaluated at bid price : 26.41 Bid-YTW : 2.90 % |
| CM.PR.L | FixedReset | 118,781 | RBC crossed 29,100 at 26.45; National crossed blocks of 24,700 and 49,400 at the same price. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-30 Maturity Price : 25.00 Evaluated at bid price : 26.45 Bid-YTW : 1.72 % |
| BNS.PR.P | FixedReset | 111,100 | Nesbitt crossed 100,000 at 25.05. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-04-25 Maturity Price : 25.00 Evaluated at bid price : 25.10 Bid-YTW : 2.58 % |
| There were 41 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| PWF.PR.L | Perpetual-Premium | Quote: 25.60 – 25.94 Spot Rate : 0.3400 Average : 0.2254 YTW SCENARIO |
| BAM.PR.J | OpRet | Quote: 26.75 – 27.09 Spot Rate : 0.3400 Average : 0.2280 YTW SCENARIO |
| GWO.PR.R | Deemed-Retractible | Quote: 25.52 – 25.74 Spot Rate : 0.2200 Average : 0.1306 YTW SCENARIO |
| GWO.PR.N | FixedReset | Quote: 22.96 – 23.55 Spot Rate : 0.5900 Average : 0.5008 YTW SCENARIO |
| MFC.PR.D | FixedReset | Quote: 26.41 – 26.65 Spot Rate : 0.2400 Average : 0.1624 YTW SCENARIO |
| BNS.PR.Q | FixedReset | Quote: 25.01 – 25.22 Spot Rate : 0.2100 Average : 0.1334 YTW SCENARIO |