PrefBlog

OSFI has announced:

the results of its latest solvency testing of federally regulated private pension plans.

As part of its regular monitoring activities, OSFI tracks the ratio of plan assets to plan liabilities for the 400 defined benefit plans it regulates. The results show that the average estimated solvency ratio of federally regulated defined benefit private pension plans at December 31, 2008 was 0.85, a decrease from 0.98 as reported in June 2008.

One of my favourite examples of boneheaded compensation schemes has always been the Soviet system for evaluating tractor factories’ meeting of goals set in five year plans. They weren’t evaluated on quality of tractors. They weren’t evaluated on quantity of tractors. They were evaluated on weight of tractors. Guess which world economy had the heaviest tractors?

But maybe now I have a new favourite: the SEC system for evaluation of case officers:

The SEC and Finra receive thousands of complaints each year. SEC enforcement offices were evaluated on the number of cases, or “stats,” they brought in, rather than on the seriousness or difficulty of action, said Walter Ricciardi, the agency’s deputy chief of enforcement from 2005 through 2008, in a speech April 1 in New York.

“So if you brought an Enron, that’s one,” Ricciardi said. “If you brought a WorldCom, that’s two.” Delisting 135 defunct companies in a week for failing to file annual reports gave an enforcer 135 cases to count, he said.

But there’s some good news in the bond world, anyway:

JPMorgan Chase & Co., the second- largest U.S. bank by assets, plans to sell dollar-denominated debt without the backing of the U.S. government for the first time since August, according to a person familiar with the transaction.

The New York-based bank plans to sell 10-year notes in a benchmark offering, said the person, who declined to be identified because terms aren’t set. Benchmark typically means at least $500 million.

There are rumours about that the objective of this issue is not so much as to get the money as to establish a market clearing price.

But naturally, recessions mean there are some losers: General Growth and Abitibi have filed for creditor protection.

Yet another solidly positive day for preferred shares on continued relatively heavy volume. PerpetualDiscounts outperformed – as might be expected, given that their duration is now officially well in excess of the FixedResets.

This entry was posted on Thursday, April 16th, 2009 at 6:45 pm and is filed under Market Action. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.