Nothing happened today except for the the usual decline in equities and related decline in government bond yields, so instead I will devote this post to the Dalhouse Dental Disaster.
For those of you unfamiliar with the news, the basic story is that a group of male Dalhousie dental students started a private group on Facebook, in which they made a lot of juvenile remarks about sex and women, and some that crossed the line into offensive territory, with a poll on which of their female peers should be ‘hate-fucked’. An informer took 70+ screenshots of this stuff and distributed it and it has now become a major talking point – to the point at which dental regulators are opining on the topic:
Also Tuesday, the Alberta Dental Association and College joined Ontario’s dental regulatory body to call on Dalhousie’s dentistry faculty to release the names of the 13 students who posted misogynist comments, “if and when they graduate.”
In a statement, the college said it is “profoundly disturbed about the alleged inappropriate behaviour of some dental students” at Dalhousie and expects dentists who want to practise in Alberta to supply evidence of their good character.
On Monday, the Royal College of Dental Surgeons of Ontario, which regulates 9,000 dentists, said it had asked Dalhousie for the names of the 13 men.
In a statement Tuesday, Dalhousie said “it will not be releasing the names of the individuals involved. The university has an obligation to protect the privacy and confidentiality of our students.”
Irwin Fefergrad, the college’s registrar, had warned that if Dalhousie does not provide the names, the College will ask each Dal graduate if they have been the subject of a university complaint or inquiry. “My members have been appalled and disgusted by the students. I’ve had more e-mails on this issue than I can remember on anything else,” he said.
The Provincial Dental Board of Nova Scotia has also said in a statement it will consider the outcome of the inquiries at Dalhousie in any decision to allow the students to practise.
The men have been suspended from clinical activities while an academic committee considers further penalties, such as academic suspension or expulsion.
Now, by me this is just craziness. The stuff was definitely puerile, but the fact that it’s gotten to the point that it’s career threatening is indicative of a hysterical over-reaction. Regrettably, I’ve seen only one column in the media that agrees with my view but even that went too far in advocating “serious consequences”.
I mean, really, why should the university – or any other authority – be involved at all? It strikes me as much more rational and natural that the women involved should tell the men what goofs they are, receive shamefaced apologies, and then everybody gets on with their lives.
But it is the regulatory involvement that fascinates me, because if juvenile sexual remarks made in supposed privacy are career threatening then basically everybody in the securities industry is about to get fired. So it occurred to me that all of this nonsense about rules and official involvement might be related to the increasing number of women in the workforce in general and in the regulatory industry in particular. My rationale for this is not dependent upon ‘women sticking up for each other’, but on my perception that women in general like process, rules and consequences. But does this perception make me a sexist pig?
I am relieved to state that as far as I can tell it does not. I discovered something called Regulatory Focus Theory:
Regulatory focus theory (RFT) is a goal pursuit theory[1] formulated by Columbia University psychology professor and researcher E. Tory Higgins regarding peoples’ perceptions in the decision making process. RFT examines the relationship between the motivation of a person and the way in which they go about achieving their goal.[2] RFT posits two separate and independent self-regulatory orientations: prevention and promotion (Higgins, 1997).
This psychological theory, like many others, is applied in communication, specifically in the subfields of nonverbal communication and persuasion.Chronic regulatory focus is measured using the Regulatory Focus Questionnaire (Higgins et al., 2001) or the Regulatory Strength measure. Momentary regulatory focus can be primed or induced.
To understand RFT, it is important to understand another of E. Tory Higgins’ theories, Regulatory Fit Theory. When a person believes that there is “fit”, they will involve themselves more in what they are doing and “feel right” about it.[3] Regulatory fit should not directly affect the hedonic occurrence of a thing or occasion, but should influence a person’s assurance in their reaction to the object or event.
Regulatory fit theory suggests that a match between orientation to a goal and the means used to approach that goal produces a state of regulatory fit that both creates a feeling of rightness about the goal pursuit and increases task engagement (Higgins, 2001, 2005). Regulatory fit intensifies responses, such as the value of a chosen object, persuasion, and job satisfaction (Kruglanski, Pierro, & Higgins, 2007).
Click for Big
And in confirmation of my bias, there’s an interesting paper by Sassenberg, Brazy, Jonas and Shah titled When gender fits self-regulatory preferences: The impact of regulatory fit on gender-based ingroup favoritism, which is available here in full. It interests me more for the introductory literature review than for the specifics of the study:
Females are perceived to have less power than males. These differences in perceived power might render different self-regulatory strategies appropriate: women should (as member of other low power groups) care about security, whereas men should (as members of other high power groups) strive for accomplishment. These regulatory implications of gender provide the basis for regulatory fit between individuals’ gender and their regulatory focus. Higher fit should lead to stronger gender-based in group favoritism: Prevention focused females and promotion focused males were expected to show more ingroup favoritism than both genders in the respective other regulatory focus. According to the regulatory fit hypothesis this effect should occur for evaluative but not stereotype based ingroup favoritism. Three studies supported these hypotheses.
…
Regulatory focus theory (Higgins, 1997, 1998) distinguishes two motivational systems: promotion and prevention focus. These foci differ in their underlying needs(achievement in a promotion focus vs. security in a prevention focus) and in turn imply the pursuit of differing types of goals (ideals, wishes, and aspirations in a promotion focus vs. oughts, duties, and responsibilities in a prevention focus). Individuals in a promotion focus tend to think global and are primarily concerned with the absence and presence of positive outcomes. Individuals in a prevention focus strive to avoid errors, follow rules and are primarily concerned with the absence and presence of negative outcomes. Regulatory focus may vary between situations and between persons.
…
Nonetheless, we assume that the impact of regulatory focus and power on ingroup favoritism generalizes to gender, as females and males share the features of high and low power groups which provide the opportunity for experiencing regulatory fit. Sassenberg et al. (2007) argued that the crucial difference between high and low power groups is that high power groups are perceived to provide the opportunity to apply promotion strategies whereas low power groups are perceived to come with the necessity to apply prevention strategies. Such perceptions also exist for females and males. Gender roles and gender stereotypes indicate that females are(among other things) sensitive, caring, dependent, and submissive, which indicates that a security-oriented strategy is perceived as appropriate for them. Male roles and stereotypes include (among other things) the characteristics daring, competitive, ambitious, and persistent(Bem, 1974; Deaux & Lewis, 1983; Oswald & Lindstedt, 2006; Williams & Best, 1982),suggesting that an achievement-oriented strategy is perceived as appropriate for males. Hence, the roles, stereotypes, and the implied behavioral strategies ascribed to the genders suggest a regulatory fit between females and a prevention focus as well as males and a promotion focus. Therefore, we assume that the fit between regulatory focus and group power also occurs for the genders.
So my interpretation of all this is:
- Women are disproportionately drawn towards regulatory work because it involves rulemaking and process
- Therefore the culture of the regulatory bodies becomes more feminine – i.e., is more strongly tilted towards the ‘prevention focus’
- Therefore more rules get invented and the power of the regulatory body increases
Let’s just hope that broader public regulation does not become as intrusive and vindictive as that exemplified by the Dalhousie dentist fiasco!
It was another poor day for the Canadian preferred share market, with PerpetualDiscounts off 5bp, FixedResets losing 28bp and DeemedRetractibles down 19bp. FixedResets and insurance DeemedRetractibles were prominent on the bad side of the lengthy Performance Highlights table. Volume was low.
For as long as the FixedReset market is so violently unsettled, I’ll keep publishing updates of the more interesting and meaningful series of FixedResets’ Implied Volatilities. This doesn’t include Enbridge because although Enbridge has a large number of issues outstanding, all of which are quite liquid, the range of Issue Reset Spreads is too small for decent conclusions. The low is 212bp (ENB.PR.H; second-lowest is ENB.PR.D at 237bp) and the high is a mere 268 for ENB.PF.G.
Remember that all rich /cheap assessments are:
- based on Implied Volatility Theory only
- are relative only to other FixedResets from the same issuer
- assume constant GOC-5 yield
- assume constant Implied Volatility
- assume constant spread
Here’s TRP:
Click for Big
So according to this, TRP.PR.A, bid at 21.36, is $1.06 cheap, but it has already reset (at +192). TRP.PR.C, bid at 21.02 and resetting at +154bp on 2016-1-30 is $1.26 rich.
Click for Big
MFC.PR.F continues to be on the line defined by its peers. Implied Volatility continues to be a conundrum. It is far too high if we consider that NVCC rules will never apply to these issues; it is still too low if we consider them to be NVCC non-compliant issues (and therefore with Deemed Maturities in the call schedule).
Click for Big
There continues to be cheapness in the lowest-spread issue, BAM.PR.X, resetting at +180bp on 2017-6-30, which is bid at 21.24 and appears to be $0.80 cheap, while BAM.PR.R, resetting at +230bp 2016-6-30 is bid at 25.01 and appears to be $0.86 rich.
It seems clear that the higher-spread issues define a curve with significantly more Implied Volatility than is calculated when the low-spread outlier is included.
Click for Big
This is just weird because the middle is expensive and the ends are cheap but anyway … FTS.PR.H, with a spread of +145bp, and bid at 18.81, looks $1.04 cheap and resets 2015-6-1. FTS.PR.K, with a spread of +205bp, and bid at 25.26, looks $1.10 expensive and resets 2019-3-1
Click for Big
Pairs equivalence is all over the map.
| 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 | 0.6728 % | 2,536.7 |
| FixedFloater | 4.39 % | 3.62 % | 23,825 | 18.10 | 1 | 0.0925 % | 3,983.7 |
| Floater | 2.99 % | 3.10 % | 59,006 | 19.49 | 4 | 0.6728 % | 2,696.6 |
| OpRet | 4.05 % | 1.63 % | 101,372 | 0.44 | 1 | 0.0395 % | 2,752.0 |
| SplitShare | 4.27 % | 4.18 % | 35,681 | 4.05 | 5 | -0.1426 % | 3,199.7 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0395 % | 2,516.4 |
| Perpetual-Premium | 5.43 % | -2.45 % | 61,589 | 0.08 | 19 | -0.0783 % | 2,487.5 |
| Perpetual-Discount | 5.17 % | 5.05 % | 105,806 | 15.29 | 16 | -0.0503 % | 2,679.4 |
| FixedReset | 4.19 % | 3.49 % | 213,130 | 16.71 | 77 | -0.2800 % | 2,552.1 |
| Deemed-Retractible | 4.95 % | 1.28 % | 93,213 | 0.23 | 39 | -0.1947 % | 2,618.6 |
| FloatingReset | 2.68 % | 1.92 % | 60,496 | 3.41 | 7 | -0.0067 % | 2,484.5 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| SLF.PR.B | Deemed-Retractible | -2.51 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.05 Bid-YTW : 5.33 % |
| TRP.PR.B | FixedReset | -2.14 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-01-06 Maturity Price : 17.41 Evaluated at bid price : 17.41 Bid-YTW : 3.71 % |
| ENB.PR.Y | FixedReset | -1.90 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-01-06 Maturity Price : 21.77 Evaluated at bid price : 22.17 Bid-YTW : 4.23 % |
| SLF.PR.A | Deemed-Retractible | -1.84 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.06 Bid-YTW : 5.28 % |
| SLF.PR.C | Deemed-Retractible | -1.75 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.03 Bid-YTW : 5.52 % |
| ENB.PR.F | FixedReset | -1.68 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-01-06 Maturity Price : 22.63 Evaluated at bid price : 23.41 Bid-YTW : 4.06 % |
| MFC.PR.C | Deemed-Retractible | -1.60 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.37 Bid-YTW : 5.41 % |
| FTS.PR.F | Perpetual-Discount | -1.45 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-01-06 Maturity Price : 24.24 Evaluated at bid price : 24.49 Bid-YTW : 5.05 % |
| BNS.PR.Y | FixedReset | -1.41 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.71 Bid-YTW : 3.12 % |
| FTS.PR.H | FixedReset | -1.31 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-01-06 Maturity Price : 18.81 Evaluated at bid price : 18.81 Bid-YTW : 3.68 % |
| HSE.PR.A | FixedReset | -1.18 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-01-06 Maturity Price : 21.00 Evaluated at bid price : 21.00 Bid-YTW : 3.69 % |
| ENB.PR.B | FixedReset | -1.13 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-01-06 Maturity Price : 22.36 Evaluated at bid price : 22.76 Bid-YTW : 4.09 % |
| TRP.PR.D | FixedReset | -1.11 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-01-06 Maturity Price : 23.17 Evaluated at bid price : 24.86 Bid-YTW : 3.62 % |
| TRP.PR.C | FixedReset | -1.08 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-01-06 Maturity Price : 21.02 Evaluated at bid price : 21.02 Bid-YTW : 3.43 % |
| IAG.PR.A | Deemed-Retractible | 1.10 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.96 Bid-YTW : 5.17 % |
| PWF.PR.A | Floater | 1.30 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-01-06 Maturity Price : 19.50 Evaluated at bid price : 19.50 Bid-YTW : 2.71 % |
| PWF.PR.S | Perpetual-Discount | 1.32 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-01-06 Maturity Price : 24.24 Evaluated at bid price : 24.65 Bid-YTW : 4.93 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| TD.PF.C | FixedReset | 171,110 | Recent new issue. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-01-06 Maturity Price : 23.17 Evaluated at bid price : 25.03 Bid-YTW : 3.46 % |
| CM.PR.P | FixedReset | 149,360 | Recent new issue. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-01-06 Maturity Price : 23.13 Evaluated at bid price : 24.93 Bid-YTW : 3.47 % |
| PVS.PR.D | SplitShare | 44,850 | National bought blocks of 10,000 and 25,000 from Scotia, both at 24.70. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2021-10-08 Maturity Price : 25.00 Evaluated at bid price : 24.65 Bid-YTW : 4.84 % |
| CU.PR.G | Perpetual-Discount | 41,362 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-01-06 Maturity Price : 22.14 Evaluated at bid price : 22.45 Bid-YTW : 5.06 % |
| FTS.PR.M | FixedReset | 40,662 | Nesbitt crossed 33,200 at 25.60. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-01-06 Maturity Price : 23.34 Evaluated at bid price : 25.55 Bid-YTW : 3.63 % |
| FTS.PR.J | Perpetual-Discount | 31,177 | ITG bought 11,700 from Nesbitt at 24.25. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2045-01-06 Maturity Price : 23.92 Evaluated at bid price : 24.32 Bid-YTW : 4.92 % |
| There were 20 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| SLF.PR.A | Deemed-Retractible | Quote: 24.06 – 24.59 Spot Rate : 0.5300 Average : 0.3269 YTW SCENARIO |
| NEW.PR.D | SplitShare | Quote: 32.11 – 33.00 Spot Rate : 0.8900 Average : 0.7339 YTW SCENARIO |
| SLF.PR.B | Deemed-Retractible | Quote: 24.05 – 24.48 Spot Rate : 0.4300 Average : 0.2742 YTW SCENARIO |
| ENB.PR.Y | FixedReset | Quote: 22.17 – 22.60 Spot Rate : 0.4300 Average : 0.2860 YTW SCENARIO |
| BAM.PF.G | FixedReset | Quote: 25.65 – 26.00 Spot Rate : 0.3500 Average : 0.2282 YTW SCENARIO |
| ELF.PR.H | Perpetual-Premium | Quote: 25.12 – 25.56 Spot Rate : 0.4400 Average : 0.3349 YTW SCENARIO |