October 4, 2013

No jobs number today!

The absence of jobs data leaves economists and their investor clients without the month’s most important numbers on which to place bets, ranging from friendly office pools to million-dollar wagers on the health of the world’s largest economy. The Bureau of Labor Statistics, which typically issues the report on the first Friday of each month at 8:30 a.m. in Washington, yesterday said a government shutdown now in its fourth day means the latest data aren’t ready.

Shades of Enron! Investment analysis isn’t the only field where fraud flourishes in a lazy culture:

A Bangladeshi factory that produces garments for The Gap and Old Navy kept two sets of books to conceal how it is coercing employees to perform 17-hour shifts every day of the week, a new report says, underlining the inability of clothing retailers to improve working conditions among their suppliers.

“It is easy, because auditors and buyers never come around late at night to check these things,” the factory manager said in an interview. “Sometimes, it is the only way to meet the orders on time.”

The report said it was easy to fool retailers visiting the factory, which is located outside the capital, Dhaka, and employs 3,750 people.

Earlier this summer, the report said, “white foreigners” – buyers from Gap and Old Navy – visited the factory late in the morning of June 22.

A loudspeaker alerted the workers ahead of the visit. They were instructed to respond to questions by claiming that conditions were good and that they needed to do “just two hours of overtime a day.”

There was an interesting wrinkle in the GM bankruptcy:

In 2005, GM lost $10 billion. Researching Nova Scotia notes that year, Truong, the Fortress analyst, called the treasurer of GM Canada and learned that GM Nova Scotia Finance had made intercompany loans to its parent, Truong testified.

Such knowledge would prove useful. Under the 1900 Nova Scotia Companies Act, a company’s owner is obligated to pay the debts of all subsidiaries. Such unlimited liability companies, or ULCs, confer tax advantages on their parents.

Truong believed that GM Nova Scotia Finance’s ULC status would allow creditors to reach up to its parents to collect repayment in the event of a bankruptcy, he wrote in a Dec. 10, 2008, e-mail presented at the trial.

I find it rather odd that an oil-linked currency is a reserve currency, but perhaps that’s the whole point:

Canada now boasts the world’s fifth-largest reserve currency.

According to an International Monetary Fund report this week, central banks boosted their holdings of Canadian money to $108.9-billion in the second quarter of this year, up from $94.9-billion in the first three months of the year and $90.1-billion in the final quarter of 2012.

It was a negative day for the Canadian preferred share market, with PerpetualDiscounts down 10bp, FixedResets off 8bp and DeemedRetractibles flat. Losing FixedResets were notable in the Performance Highlights table. Volume was 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 -0.2855 % 2,518.3
FixedFloater 4.32 % 3.64 % 31,736 18.01 1 1.8047 % 3,845.4
Floater 2.68 % 2.92 % 65,689 19.96 5 -0.2855 % 2,719.1
OpRet 4.63 % 2.90 % 60,110 0.48 3 0.0901 % 2,635.1
SplitShare 4.75 % 5.02 % 60,706 4.03 6 0.1500 % 2,951.1
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 0.0901 % 2,409.5
Perpetual-Premium 5.76 % 2.77 % 107,655 0.11 8 0.0000 % 2,276.8
Perpetual-Discount 5.54 % 5.56 % 146,264 14.39 30 -0.1003 % 2,344.5
FixedReset 4.94 % 3.66 % 236,746 3.62 85 -0.0845 % 2,455.7
Deemed-Retractible 5.13 % 4.41 % 192,233 6.89 43 0.0011 % 2,381.9
Performance Highlights
Issue Index Change Notes
FTS.PR.H FixedReset -1.91 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2043-10-04
Maturity Price : 21.00
Evaluated at bid price : 21.00
Bid-YTW : 4.09 %
HSE.PR.A FixedReset -1.90 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2043-10-04
Maturity Price : 22.35
Evaluated at bid price : 22.77
Bid-YTW : 4.07 %
TRP.PR.C FixedReset -1.32 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2043-10-04
Maturity Price : 22.60
Evaluated at bid price : 23.11
Bid-YTW : 3.77 %
CU.PR.F Perpetual-Discount -1.12 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2043-10-04
Maturity Price : 21.26
Evaluated at bid price : 21.26
Bid-YTW : 5.36 %
CIU.PR.C FixedReset -1.06 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2043-10-04
Maturity Price : 20.52
Evaluated at bid price : 20.52
Bid-YTW : 4.07 %
BNA.PR.C SplitShare 1.04 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2019-01-10
Maturity Price : 25.00
Evaluated at bid price : 24.35
Bid-YTW : 5.02 %
BAM.PR.G FixedFloater 1.80 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2043-10-04
Maturity Price : 22.42
Evaluated at bid price : 22.00
Bid-YTW : 3.64 %
Volume Highlights
Issue Index Shares
Traded
Notes
CM.PR.L FixedReset 103,537 RBC crossed blocks of 49,500 and 50,000, both at 25.53.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-04-30
Maturity Price : 25.00
Evaluated at bid price : 25.46
Bid-YTW : 2.41 %
RY.PR.X FixedReset 57,593 TD crossed 50,000 at 25.97.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-08-24
Maturity Price : 25.00
Evaluated at bid price : 25.96
Bid-YTW : 2.68 %
GWO.PR.R Deemed-Retractible 56,881 Desjardins crossed 25,000 at 22.50; TD crossed 16,900 at the same price.
YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 22.50
Bid-YTW : 6.08 %
CU.PR.C FixedReset 54,980 Desjardins crossed 49,500 at 25.00.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2017-06-01
Maturity Price : 25.00
Evaluated at bid price : 25.05
Bid-YTW : 4.07 %
TD.PR.K FixedReset 51,965 Desjardins crossed blocks of 30,000 and 15,000, both at 25.72.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-07-31
Maturity Price : 25.00
Evaluated at bid price : 25.67
Bid-YTW : 2.40 %
CM.PR.M FixedReset 51,232 RBC crossed 50,000 at 25.80.
YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-07-31
Maturity Price : 25.00
Evaluated at bid price : 25.75
Bid-YTW : 2.26 %
There were 36 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
Issue Index Quote Data and Yield Notes
MFC.PR.F FixedReset Quote: 22.50 – 23.39
Spot Rate : 0.8900
Average : 0.5794

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 22.50
Bid-YTW : 4.72 %

FTS.PR.K FixedReset Quote: 24.25 – 24.74
Spot Rate : 0.4900
Average : 0.3169

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2043-10-04
Maturity Price : 22.86
Evaluated at bid price : 24.25
Bid-YTW : 4.00 %

TD.PR.G FixedReset Quote: 25.29 – 25.59
Spot Rate : 0.3000
Average : 0.1770

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2014-04-30
Maturity Price : 25.00
Evaluated at bid price : 25.29
Bid-YTW : 3.33 %

BAM.PR.M Perpetual-Discount Quote: 19.80 – 20.08
Spot Rate : 0.2800
Average : 0.1871

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2043-10-04
Maturity Price : 19.80
Evaluated at bid price : 19.80
Bid-YTW : 6.05 %

BAM.PR.B Floater Quote: 18.05 – 18.32
Spot Rate : 0.2700
Average : 0.1799

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2043-10-04
Maturity Price : 18.05
Evaluated at bid price : 18.05
Bid-YTW : 2.92 %

ENB.PR.A Perpetual-Discount Quote: 25.10 – 25.40
Spot Rate : 0.3000
Average : 0.2104

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2043-10-04
Maturity Price : 24.88
Evaluated at bid price : 25.10
Bid-YTW : 5.54 %

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