August 31, 2020

Here’s what Britain is talking about by way of paying the coronavirus debt:

Treasury officials in Britain are pushing for tax hikes to plug holes blown in public finances by the coronavirus pandemic, two leading British newspapers said.

Such hikes will enable the Exchequer to raise at least £20-billion ($35-billion) a year, and some could be introduced in https://www.theglobeandmail.com/business/article-liberals-revised-covid-19-emergency-benefits-resemble-a-national/#commentsthe November budget, the Sunday Telegraph said.

The Sunday Times newspaper said officials were drawing up plans for a £30-billion “tax raid” on the wealthy, businesses, pensions and foreign aid.

In its budget, the government also plans to raise both capital gains tax and corporation tax, the Sunday Times added.

Finance Minister Rishi Sunak is considering a proposal to boost corporation tax to 24 per cent from 19 per cent, a move that would raise £12-billion next year, rising to £17-billion in 2023-24, the paper said.

I was infuriated by a recent article about the new coronavirus supports and their similarity to Guaranteed Annual Income:

According to the tenets of a guaranteed basic income program, all adults are eligible for government benefits that establish a floor for income, but those payments decline as earnings from wages rise. That gradual reduction, or clawback, means that the basic income benefit is eliminated entirely for higher earners.

Wrong, wrong, wrong!

A ‘clawback’ implies that there is a higher marginal rate on low earnings that is hidden from obvious view. This leads to such things as welfare recipients facing a marginal tax rate in excess of 50% on earnings which is often claimed to be a disincentive to work.

You want guaranteed basic income? Fine. Good. But it must work as follows:
i) Cut everybody a cheque for $X.
ii) This $X is included in taxable income
iii) Then tax the taxable income in the usual way.

The Bank of Canada has published its 2019 Cash Alternative Survey Results:

The role of cash in Canadians’ lives has been evolving, as innovations in digital payments have become more widely adopted over the past decade. The emergence of privately issued digital currencies has motivated many central banks to conduct research into central bank digital currencies (CBDCs). We contribute to the Bank of Canada’s research on CBDC by monitoring Canadians’ use of cash and their adoption of digital payment methods.

The Bank conducted the 2019 Cash Alternative Survey (CAS) in August and September 2019. The 2019 CAS asked respondents to report their cash holdings, adoption of cryptocurrencies, and views regarding the potential impact of cash disappearing from the Canadian economy.

We find that Canadians’ cash holdings remain stable, and cryptocurrency adoption remains limited and concentrated among few demographics. Looking ahead, we find few Canadians plan to stop using cash and a significant share report they would find the disappearance of cash problematic. We plan to conduct further iterations of the Cash Alternative Study to further analyze Canadians’ cash use, including their withdrawal and spending behaviour.

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 0.1168 % 1,669.9
FixedFloater 0.00 % 0.00 % 0 0.00 0 0.1168 % 3,064.1
Floater 5.00 % 5.08 % 63,879 15.27 3 0.1168 % 1,765.9
OpRet 0.00 % 0.00 % 0 0.00 0 0.0694 % 3,532.3
SplitShare 4.68 % 4.39 % 40,851 3.24 8 0.0694 % 4,218.3
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 0.0694 % 3,291.3
Perpetual-Premium 5.51 % 4.60 % 82,252 2.76 4 0.4152 % 3,119.7
Perpetual-Discount 5.30 % 5.14 % 79,410 14.68 31 0.6930 % 3,445.0
FixedReset Disc 5.45 % 4.30 % 120,354 16.26 67 0.0008 % 2,102.5
Deemed-Retractible 5.11 % 5.09 % 102,778 14.91 27 0.5886 % 3,373.7
FloatingReset 2.82 % 2.29 % 40,730 1.40 3 0.7143 % 1,819.1
FixedReset Prem 5.26 % 4.39 % 234,013 0.87 11 -0.1328 % 2,615.9
FixedReset Bank Non 1.95 % 2.33 % 126,911 1.39 2 0.0604 % 2,845.7
FixedReset Ins Non 5.68 % 4.43 % 90,299 16.19 22 0.1966 % 2,119.4
Performance Highlights
Issue Index Change Notes
BMO.PR.Y FixedReset Disc -4.76 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 18.00
Evaluated at bid price : 18.00
Bid-YTW : 4.35 %
MFC.PR.M FixedReset Ins Non -4.52 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 15.85
Evaluated at bid price : 15.85
Bid-YTW : 4.74 %
BAM.PR.R FixedReset Disc -3.42 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 12.70
Evaluated at bid price : 12.70
Bid-YTW : 5.44 %
BAM.PF.A FixedReset Disc -2.68 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 17.04
Evaluated at bid price : 17.04
Bid-YTW : 5.42 %
TD.PF.I FixedReset Disc -2.33 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 21.00
Evaluated at bid price : 21.00
Bid-YTW : 4.25 %
MFC.PR.F FixedReset Ins Non -1.47 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 10.05
Evaluated at bid price : 10.05
Bid-YTW : 4.54 %
CM.PR.S FixedReset Disc -1.46 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 18.92
Evaluated at bid price : 18.92
Bid-YTW : 4.11 %
PWF.PR.P FixedReset Disc -1.44 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 10.25
Evaluated at bid price : 10.25
Bid-YTW : 4.95 %
TRP.PR.K FixedReset Disc -1.38 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 23.98
Evaluated at bid price : 24.31
Bid-YTW : 5.05 %
RY.PR.S FixedReset Disc -1.36 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 20.33
Evaluated at bid price : 20.33
Bid-YTW : 3.87 %
TRP.PR.E FixedReset Disc -1.22 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 13.77
Evaluated at bid price : 13.77
Bid-YTW : 5.51 %
PWF.PR.E Perpetual-Discount 1.00 % YTW SCENARIO
Maturity Type : Call
Maturity Date : 2020-09-30
Maturity Price : 25.00
Evaluated at bid price : 25.15
Bid-YTW : 3.89 %
GWO.PR.T Deemed-Retractible 1.02 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 24.35
Evaluated at bid price : 24.83
Bid-YTW : 5.25 %
IFC.PR.C FixedReset Ins Non 1.09 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 16.76
Evaluated at bid price : 16.76
Bid-YTW : 4.66 %
CU.PR.E Perpetual-Discount 1.14 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 23.67
Evaluated at bid price : 23.97
Bid-YTW : 5.12 %
PWF.PR.L Perpetual-Discount 1.19 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 23.56
Evaluated at bid price : 23.83
Bid-YTW : 5.40 %
RY.PR.M FixedReset Disc 1.24 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 19.59
Evaluated at bid price : 19.59
Bid-YTW : 3.88 %
GWO.PR.I Deemed-Retractible 1.25 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 21.62
Evaluated at bid price : 21.87
Bid-YTW : 5.22 %
CU.PR.F Perpetual-Discount 1.25 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 22.40
Evaluated at bid price : 22.68
Bid-YTW : 4.97 %
BAM.PF.B FixedReset Disc 1.26 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 16.11
Evaluated at bid price : 16.11
Bid-YTW : 5.29 %
GWO.PR.N FixedReset Ins Non 1.30 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 10.15
Evaluated at bid price : 10.15
Bid-YTW : 4.29 %
CU.PR.G Perpetual-Discount 1.31 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 22.15
Evaluated at bid price : 22.44
Bid-YTW : 5.03 %
GWO.PR.P Deemed-Retractible 1.32 % YTW SCENARIO
Maturity Type : Call
Maturity Date : 2020-09-30
Maturity Price : 25.00
Evaluated at bid price : 25.33
Bid-YTW : 0.48 %
GWO.PR.R Deemed-Retractible 1.35 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 22.91
Evaluated at bid price : 23.32
Bid-YTW : 5.21 %
CU.PR.H Perpetual-Premium 1.40 % YTW SCENARIO
Maturity Type : Call
Maturity Date : 2023-09-01
Maturity Price : 25.25
Evaluated at bid price : 25.38
Bid-YTW : 5.05 %
CIU.PR.A Perpetual-Discount 1.50 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 22.10
Evaluated at bid price : 22.38
Bid-YTW : 5.15 %
GWO.PR.H Deemed-Retractible 1.55 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 23.24
Evaluated at bid price : 23.54
Bid-YTW : 5.22 %
PWF.PR.K Perpetual-Discount 1.63 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 22.81
Evaluated at bid price : 23.09
Bid-YTW : 5.41 %
TD.PF.D FixedReset Disc 1.64 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 20.47
Evaluated at bid price : 20.47
Bid-YTW : 3.94 %
PWF.PR.F Perpetual-Discount 1.66 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 24.17
Evaluated at bid price : 24.43
Bid-YTW : 5.42 %
CU.PR.D Perpetual-Discount 1.70 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 23.65
Evaluated at bid price : 23.95
Bid-YTW : 5.13 %
MFC.PR.C Deemed-Retractible 1.70 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 21.88
Evaluated at bid price : 22.12
Bid-YTW : 5.09 %
BAM.PR.T FixedReset Disc 1.80 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 13.61
Evaluated at bid price : 13.61
Bid-YTW : 5.22 %
BAM.PR.M Perpetual-Discount 1.81 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 21.64
Evaluated at bid price : 21.89
Bid-YTW : 5.51 %
GWO.PR.S Deemed-Retractible 1.91 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 24.79
Evaluated at bid price : 25.09
Bid-YTW : 5.31 %
TRP.PR.D FixedReset Disc 2.19 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 14.00
Evaluated at bid price : 14.00
Bid-YTW : 5.46 %
RY.PR.Z FixedReset Disc 2.23 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 18.30
Evaluated at bid price : 18.30
Bid-YTW : 3.86 %
MFC.PR.N FixedReset Ins Non 2.32 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 16.75
Evaluated at bid price : 16.75
Bid-YTW : 4.38 %
BIP.PR.A FixedReset Disc 2.40 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 17.93
Evaluated at bid price : 17.93
Bid-YTW : 5.53 %
TRP.PR.F FloatingReset 2.85 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 10.82
Evaluated at bid price : 10.82
Bid-YTW : 4.75 %
TRP.PR.A FixedReset Disc 2.94 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 12.61
Evaluated at bid price : 12.61
Bid-YTW : 5.18 %
CM.PR.R FixedReset Disc 2.99 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 23.05
Evaluated at bid price : 23.40
Bid-YTW : 4.13 %
MFC.PR.G FixedReset Ins Non 4.73 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 19.03
Evaluated at bid price : 19.03
Bid-YTW : 4.39 %
Volume Highlights
Issue Index Shares
Traded
Notes
MFC.PR.G FixedReset Ins Non 165,700 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 19.03
Evaluated at bid price : 19.03
Bid-YTW : 4.39 %
SLF.PR.I FixedReset Ins Non 154,800 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 18.43
Evaluated at bid price : 18.43
Bid-YTW : 4.32 %
BAM.PR.R FixedReset Disc 102,000 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 12.70
Evaluated at bid price : 12.70
Bid-YTW : 5.44 %
RY.PR.M FixedReset Disc 83,658 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 19.59
Evaluated at bid price : 19.59
Bid-YTW : 3.88 %
BMO.PR.D FixedReset Disc 81,200 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 22.34
Evaluated at bid price : 22.65
Bid-YTW : 4.03 %
PWF.PR.F Perpetual-Discount 69,300 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 24.17
Evaluated at bid price : 24.43
Bid-YTW : 5.42 %
There were 29 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
Issue Index Quote Data and Yield Notes
TRP.PR.G FixedReset Disc Quote: 15.60 – 22.00
Spot Rate : 6.4000
Average : 3.5282

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 15.60
Evaluated at bid price : 15.60
Bid-YTW : 5.42 %

MFC.PR.M FixedReset Ins Non Quote: 15.85 – 16.81
Spot Rate : 0.9600
Average : 0.6318

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 15.85
Evaluated at bid price : 15.85
Bid-YTW : 4.74 %

BAM.PF.A FixedReset Disc Quote: 17.04 – 18.00
Spot Rate : 0.9600
Average : 0.6350

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 17.04
Evaluated at bid price : 17.04
Bid-YTW : 5.42 %

TD.PF.I FixedReset Disc Quote: 21.00 – 22.74
Spot Rate : 1.7400
Average : 1.4467

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 21.00
Evaluated at bid price : 21.00
Bid-YTW : 4.25 %

BMO.PR.Y FixedReset Disc Quote: 18.00 – 19.20
Spot Rate : 1.2000
Average : 0.9774

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 18.00
Evaluated at bid price : 18.00
Bid-YTW : 4.35 %

BAM.PR.R FixedReset Disc Quote: 12.70 – 13.54
Spot Rate : 0.8400
Average : 0.7012

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-08-31
Maturity Price : 12.70
Evaluated at bid price : 12.70
Bid-YTW : 5.44 %

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