I’m glad to see someone resisting the politicization of the Fed:
Richard Fisher, president of the Federal Reserve Bank of Dallas, said the White House botched the nomination for Chairman Ben S. Bernanke’s successor by allowing an unprecedented public debate over who would be the best choice.
“The White House has mishandled this terribly,” Fisher said today in response to a question from the audience after giving a speech in San Antonio, Texas. “This should not be a public debate,” he said, adding that the Fed “must never be a political instrument.”
There is some concern regarding the seasonal adjustments in the US jobs number:
Yet a new paper presented by Johns Hopkins economist Jonathan Wright at the Brookings Institution’s Panel of Economic Activity indicates that the Fed may have been misled by meaningless data. The evidence suggests that employment growth was just as anemic in July, when the Bureau of Labor Statistics reported 332,000 new jobs, as it was in February, when the BLS reported that only 104,000 jobs were added.
The problem is due to some peculiarities in the formula for seasonal adjustments. Weather, the school calendar and holidays all affect how many people are working in any given month, creating a lot of volatility in the raw jobs numbers. For example, the BLS reported that 1.2 million jobs were lost in July and 378,000 were added in August. Thanks to seasonal adjustments, however, most people think that 104,000 jobs were added in July and 169,000 were added in August. The truth is somewhere in between.
…
First, the Fed has become hypersensitive to monthly jobs data. Second, the process by which the BLS smooths out its raw data seems to have been corrupted by a statistical artifact. As Wright explains, the job losses associated with the Great Recession were concentrated at the end of 2008 and the beginning of 2009 — the coldest months of the year. That distorted the BLS’s seasonal adjustment algorithm, which uses the past three years of data to determine the “normal” pattern of employment growth in different months.This was first suspected by economists at Nomura and Goldman Sachs, as Cardiff Garcia reported at FT Alphaville. However, Wright’s paper presents the first conclusive evidence.
It is becoming apparent that Obamacare is more like wealth transfer than insurance:
Binko is one of 2.7 million healthy 18- to 34-year-olds, dubbed the young invincibles, that the Obama administration has said are needed in the exchanges to offset the cost of providing care for millions of other uninsured people who are likely to be older and sicker. Without young adults, who pay for insurance yet rarely use it, premium costs in the exchanges may soar.
“For young people learning to take care of ourselves, it’s foolish if we have to take care of the older generation too,” Binko, who now lives in Los Angeles, said in an interview.
Young invincibles are the focus of a pitched battle between Obamacare backers and the law’s opponents as the U.S. nears the Oct. 1 roll-out of government-run insurance exchanges. It’s a conflict playing out on television and the Internet, on college campuses and in door-to-door campaigns by volunteers nationwide.
“This demographic is critical,” Caroline Pearson, a vice president at Washington-based consulting firm Avalere Health LLC, said in an interview. “If you mostly have high risk people, premiums go up. It becomes a death spiral.”
Whether or not wealth transfer is desirable, if indulged in it should be financed through the tax system, rather than dressed up as something it isn’t.
Here are some illuminating tech facts:
BlackBerry, which released the flagship Z10 touchscreen phone earlier this year, sold 5.9 million smartphones during the last three months. Apple sold more than 9 million over the weekend.
The companies’ different trajectories became even more vivid today when BlackBerry said it tentatively agreed to a $4.7 billion buyout by a group led by Fairfax Financial Holdings. Meanwhile, Apple’s stock rose 5 percent following the sales announcement, giving the California company a market value of almost $446 billion.
Speaking of Blackberry, it’s setting records:
BlackBerry Ltd. (BBRY), once valued at $83 billion, may be stuck with the cheapest valuation ever for a North American technology or telecommunications takeover.
The smartphone maker said yesterday it reached a tentative agreement for a $4.7 billion buyout by a group led by Fairfax Financial Holdings Ltd. (FFH), its biggest shareholder. Including net cash, the proposal values the Waterloo, Ontario-based company at an 80 percent discount to its book value and just 0.17 times its sales, the cheapest revenue multiple on record among similar-sized North American telecommunications or technology acquisitions, according to data compiled by Bloomberg.
AltaGas Ltd., proud issuer of ALA.PR.A, was confirmed at Pfd-3 [Stable] by DBRS:
DBRS has today confirmed the ratings on both the Medium-Term Notes and Issuer Rating of AltaGas Ltd. (AltaGas or the Company) at BBB and on the Preferred Shares – Cumulative at Pfd-3, all with Stable trends. The confirmation reflects Company’s: (1) improving business risk profile, as almost 80% of the Company’s earnings are supported by either stable regulated returns or long-term contacts; (2) diversified sources of revenue from its Utilities, Power and Gas segments operating in Canada and the United States; (3) improved quality of earnings since the addition of utilities (SEMCO Energy Inc. and Pacific Northern Gas Ltd.) and cleaner power generation assets (Blythe Energy, LLC (Blythe)) to the Company’s portfolio. These new assets are primarily underpinned by long-term take-or-pay commitments, resulting in no incremental direct exposure to commodity price risk.
…
DBRS notes that in the past five years, AltaGas’s credit metrics have weakened due to its aggressive growth capital expenditures (capex) program, which has added approximately $4 billion in new and expanded assets. Company’s key credit metrics are expected to remain weak over the near term, but are expected to recover in the medium term as major projects come on stream and full-year benefits from new assets are realized. Going forward, DBRS expects the Company to finance its capex program with a prudent mix of equity and debt and maintain credit metrics consistent with its current rating.
It was a strong day for the Canadian preferred share market, with PerpetualDiscounts winning 31bp, FixedResets gaining 17bp and DeemedRetractibles up 27bp. The Performance Highlights table is suitable skewed towards winners. Volume was very extremely awfully high.
| 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 | -0.6688 % | 2,562.6 |
| FixedFloater | 4.11 % | 3.43 % | 29,363 | 18.43 | 1 | 1.7621 % | 4,037.7 |
| Floater | 2.64 % | 2.87 % | 62,895 | 20.05 | 5 | -0.6688 % | 2,766.9 |
| OpRet | 4.63 % | 2.44 % | 65,857 | 0.51 | 3 | 0.1415 % | 2,638.8 |
| SplitShare | 4.76 % | 4.82 % | 59,666 | 4.05 | 6 | -0.0944 % | 2,944.8 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1415 % | 2,412.9 |
| Perpetual-Premium | 5.86 % | 5.88 % | 126,314 | 13.95 | 2 | -0.0197 % | 2,263.2 |
| Perpetual-Discount | 5.53 % | 5.54 % | 140,017 | 14.34 | 36 | 0.3079 % | 2,354.0 |
| FixedReset | 4.91 % | 3.59 % | 240,667 | 3.65 | 85 | 0.1741 % | 2,464.9 |
| Deemed-Retractible | 5.11 % | 4.51 % | 195,581 | 4.71 | 43 | 0.2658 % | 2,381.4 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| TRI.PR.B | Floater | -3.28 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-09-24 Maturity Price : 21.25 Evaluated at bid price : 21.52 Bid-YTW : 2.40 % |
| SLF.PR.E | Deemed-Retractible | 1.06 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.86 Bid-YTW : 6.07 % |
| BNS.PR.Y | FixedReset | 1.09 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.16 Bid-YTW : 3.73 % |
| IFC.PR.A | FixedReset | 1.10 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.92 Bid-YTW : 4.42 % |
| GWO.PR.Q | Deemed-Retractible | 1.19 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.76 Bid-YTW : 5.78 % |
| SLF.PR.D | Deemed-Retractible | 1.21 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.83 Bid-YTW : 6.03 % |
| SLF.PR.B | Deemed-Retractible | 1.39 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.64 Bid-YTW : 5.98 % |
| BAM.PF.B | FixedReset | 1.62 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-09-24 Maturity Price : 22.70 Evaluated at bid price : 23.88 Bid-YTW : 4.64 % |
| BAM.PR.G | FixedFloater | 1.76 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-09-24 Maturity Price : 23.23 Evaluated at bid price : 23.10 Bid-YTW : 3.43 % |
| FTS.PR.J | Perpetual-Discount | 1.82 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-09-24 Maturity Price : 22.57 Evaluated at bid price : 22.93 Bid-YTW : 5.21 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| TRP.PR.B | FixedReset | 677,768 | RBC crossed five blocks; two of 258,900 each, two of 25,000 each and the last for 97,000, all at 20.59. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-09-24 Maturity Price : 20.58 Evaluated at bid price : 20.58 Bid-YTW : 4.06 % |
| FTS.PR.J | Perpetual-Discount | 133,955 | Nesbitt crossed blocks of 63,000 and 60,000, both at 22.60. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-09-24 Maturity Price : 22.57 Evaluated at bid price : 22.93 Bid-YTW : 5.21 % |
| FTS.PR.F | Perpetual-Discount | 107,755 | Desjardins crossed blocks of 43,800 and 50,000, both at 22.90. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-09-24 Maturity Price : 22.70 Evaluated at bid price : 22.99 Bid-YTW : 5.37 % |
| PWF.PR.P | FixedReset | 63,871 | RBC crossed 38,200 at 24.30. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-09-24 Maturity Price : 23.15 Evaluated at bid price : 24.15 Bid-YTW : 3.78 % |
| BMO.PR.O | FixedReset | 63,170 | RBC crossed 50,000 at 25.81. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-05-25 Maturity Price : 25.00 Evaluated at bid price : 25.78 Bid-YTW : 2.54 % |
| CU.PR.F | Perpetual-Discount | 59,765 | Scotia crossed 47,200 at 21.59. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2043-09-24 Maturity Price : 21.47 Evaluated at bid price : 21.75 Bid-YTW : 5.21 % |
| There were 80 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| TRI.PR.B | Floater | Quote: 21.52 – 22.49 Spot Rate : 0.9700 Average : 0.6428 YTW SCENARIO |
| IFC.PR.A | FixedReset | Quote: 23.92 – 24.70 Spot Rate : 0.7800 Average : 0.4842 YTW SCENARIO |
| ELF.PR.H | Perpetual-Discount | Quote: 24.00 – 24.70 Spot Rate : 0.7000 Average : 0.5125 YTW SCENARIO |
| HSB.PR.D | Deemed-Retractible | Quote: 24.95 – 25.50 Spot Rate : 0.5500 Average : 0.3815 YTW SCENARIO |
| PWF.PR.P | FixedReset | Quote: 24.15 – 24.60 Spot Rate : 0.4500 Average : 0.3004 YTW SCENARIO |
| SLF.PR.A | Deemed-Retractible | Quote: 22.40 – 22.86 Spot Rate : 0.4600 Average : 0.3192 YTW SCENARIO |