There may be new restrictions on short-selling:
Concern that short-sellers accelerate stock declines may prompt the Securities and Exchange Commission to adopt a rule next month aimed at curbing bearish bets when equities are plunging.
…
Forcing short sellers to wait for a stock to rise above the best price bid may prevent them from flooding the market with sell orders and causing losses to multiply. Some exchange officials say the restrictions known as uptick rules don’t work, citing studies that shows they may be less effective during panics that drive prices down and volatility up.“There is no empirical data to support the introduction of a new rule,” Hyndman said yesterday at a securities industry conference in Chicago. “But this is the least intrusive of the proposals the SEC was considering.”
BIS has released its Compensation Principles and Standards Assessment Methodology. I was amused by Principle 3:
Staff engaged in financial and risk control must be independent, have appropriate authority, and be compensated in a manner that is independent of the business areas they oversee and commensurate with their key role in the firm. Effective independence and appropriate authority of such staff are necessary to preserve the integrity of financial and risk management’s influence on incentive compensation.
Standard 2: For employees in the risk and compliance function:
o remuneration should be determined independently of other business areas and be adequate to attract qualified and experienced staff;
o performance measures should be based principally on the achievement of the objectives of their functions.
The boxtickers are making sure their post-regulatory positions will be lucrative and unaffected by the firm’s stock price!
Econbrowser‘s James Hamilton writes a spirited argument regarding Why Bernanke should be reconfirmed:
I shake my head when I look at the list of senators who say they’ll vote “no.” How could there possibly be an alternative whom Barbara Boxer (D-CA) and Jim DeMint (R-SC) would both prefer to Bernanke?
Perhaps some senators reason that a “no” vote could score them political points. If so, it’s all the more reason to be alarmed. One of my big criticisms of Bernanke has been that he has put in peril the independence of the central bank from political pressure to help solve the nation’s fiscal challenges. Even if the present skirmish over reconfirmation proves to be just a shot across the bow, it is not an encouraging development in terms of the long-run health of U.S. monetary policy.
…Or if you’d like to hear others saying the same thing, check out
Edmund Andrews, King Banaian, Brad DeLong, Richard Green, and Mark Thoma.
POW.PR.C was relatively well-behaved today, easing off a little (gently, gently!) from its recent absurd highs. It traded a mere 5,890 shares on the TSX – back to normal there, anyway – in a range of 24.93-04 before closing at 24.90-04, 10×1. Still expensive! Dump ’em while they’re hot!
It was a good day for the Canadian Preferred Share market, as PerpetualDiscounts gained 10bp and FixedResets were up 12bp on good volume. The updraft was well-behaved, with only five issues showing a total return with an absolute value in excess of 1% on the day.
| 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 | 0.2917 % | 1,712.7 |
| FixedFloater | 5.63 % | 3.72 % | 35,037 | 19.37 | 1 | 1.6316 % | 2,807.3 |
| Floater | 2.29 % | 2.64 % | 107,286 | 20.65 | 3 | 0.2917 % | 2,139.7 |
| OpRet | 4.85 % | -5.74 % | 116,137 | 0.09 | 13 | -0.0856 % | 2,316.8 |
| SplitShare | 6.37 % | -0.83 % | 165,164 | 0.08 | 2 | 0.0880 % | 2,107.9 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0856 % | 2,118.5 |
| Perpetual-Premium | 5.81 % | 5.66 % | 152,927 | 13.81 | 12 | 0.1961 % | 1,889.8 |
| Perpetual-Discount | 5.76 % | 5.79 % | 180,697 | 14.19 | 63 | 0.0990 % | 1,827.3 |
| FixedReset | 5.41 % | 3.55 % | 344,038 | 3.82 | 42 | 0.1196 % | 2,182.6 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| MFC.PR.A | OpRet | -1.55 % | YTW SCENARIO Maturity Type : Soft Maturity Maturity Date : 2015-12-18 Maturity Price : 25.00 Evaluated at bid price : 26.09 Bid-YTW : 3.37 % |
| RY.PR.R | FixedReset | -1.08 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-03-26 Maturity Price : 25.00 Evaluated at bid price : 27.50 Bid-YTW : 3.57 % |
| PWF.PR.K | Perpetual-Discount | 1.19 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-01-25 Maturity Price : 21.26 Evaluated at bid price : 21.26 Bid-YTW : 5.86 % |
| HSB.PR.D | Perpetual-Discount | 1.23 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-01-25 Maturity Price : 22.12 Evaluated at bid price : 22.25 Bid-YTW : 5.68 % |
| BAM.PR.G | FixedFloater | 1.63 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-01-25 Maturity Price : 25.00 Evaluated at bid price : 19.31 Bid-YTW : 3.72 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| BAM.PR.B | Floater | 54,914 | Nesbitt crossed 42,500 at 15.00. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-01-25 Maturity Price : 14.97 Evaluated at bid price : 14.97 Bid-YTW : 2.64 % |
| NA.PR.L | Perpetual-Discount | 47,261 | RBC crossed two blocks of 20,000 each, both at 22.00. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-01-25 Maturity Price : 21.58 Evaluated at bid price : 21.89 Bid-YTW : 5.54 % |
| CM.PR.L | FixedReset | 43,698 | RBC crossed 30,000 at 27.80. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-05-30 Maturity Price : 25.00 Evaluated at bid price : 27.72 Bid-YTW : 3.79 % |
| BNS.PR.M | Perpetual-Discount | 36,297 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-01-25 Maturity Price : 20.59 Evaluated at bid price : 20.59 Bid-YTW : 5.50 % |
| BNS.PR.P | FixedReset | 35,811 | RBC crossed 20,000 at 26.42. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-05-25 Maturity Price : 25.00 Evaluated at bid price : 26.36 Bid-YTW : 3.23 % |
| TRP.PR.A | FixedReset | 34,898 | RBC crossed 14,000 at 26.04. YTW SCENARIO Maturity Type : Call Maturity Date : 2015-01-30 Maturity Price : 25.00 Evaluated at bid price : 26.05 Bid-YTW : 3.75 % |
| There were 44 other index-included issues trading in excess of 10,000 shares. | |||