{"id":1044,"date":"2007-08-08T21:55:11","date_gmt":"2007-08-09T01:55:11","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=1044"},"modified":"2007-08-08T21:55:11","modified_gmt":"2007-08-09T01:55:11","slug":"august-8-2007","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=1044","title":{"rendered":"August 8, 2007"},"content":{"rendered":"

OK, everybody, we can relax now! George W. Bush has stated<\/a> “I’m not an economist, but my hope is that the market, if it functions normally, will be able to yield a soft landing. That’s kind of what it looks like so far.”\u00a0 The equity markets immediately responded with a huge advances, both in the US<\/a> and in Canada<\/a>.<\/p>\n

Sub-prime is old news, as evidenced by the fact that the IMF is pontifficating<\/a> on the subject. The Europeans say investors can take their lumps<\/a> anyway.\u00a0Of far greater interest is rumblings from China<\/a> that they may be willing, under certain circumstances, to flex their treasury muscle and use their currency reserves as\u00a0a political weapon. Bush says<\/a> that this would be foolhardy, and it’s therefore surprising that anybody is still taking the threat seriously. But … there is some concern<\/a> the Fed doesn’t have the same influence over longer-term rates that it used to. Tom Graff has some comments<\/a> and I have previously noted<\/a> the effect of Chinese investment on Treasuries. Their trade surplus rose again<\/a> in July, so they’ve got plenty of ammunition.<\/p>\n

Treasuries got thumped<\/a>, and whether that’s a rebound of the flight to quality or a China Syndrome is a matter of taste. Canadas followed Treasuries, unnoticed by media\u00a0and bloggers.<\/p>\n

The Wall Street Murdoch is Magnificent Journal posted an interesting comparison<\/a> of credit markets, now vs. the LCTM blow-up. Given the state of economic education<\/a>, however, nobody will notice.<\/p>\n

It was a good day in pref-land, with volume picking up a bit and numerous “Scraps” issues (those not included in the indices due to either low volume or poor credit) gaining over 1% in price (bid \/ bid). The PerpetualDiscount index continued to shine and – who knows – might even make it back to its 2006-6-30 level of 1,000.00 before too long.<\/p>\n

BAM had an interesting day, with two of its floating-rate issues and one of its perpetualDiscounts gaining over 1% (bid \/ bid). There seems to have been some pickup in activity in the BAM.PR.M \/ BAM.PR.N issues but whether this is meaningful remains to be seen. The fund<\/a> has a position! An attractive yield, anyway – but I will confess I don’t know how many, if any, the underwriters of BAM.PR.N still have to unload. Certain the blow-out sale on EPP.PR.A<\/a> I was told about has fizzled – the issue immediately started trading below the price I was told and has remained there since.<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n
Note that these indices are experimental; the absolute and relative daily values are expected to change in the final version. In this version, index values are based at 1,000.0 on 2006-6-30<\/strong><\/td>\n<\/tr>\n
Index<\/td>\nMean Current Yield (at bid)<\/td>\nMean YTW<\/td>\nMean Average Trading Value<\/td>\nMean Mod Dur (YTW)<\/td>\nIssues<\/td>\nDay’s Perf.<\/td>\nIndex Value<\/td>\n<\/tr>\n
Ratchet<\/td>\n4.76%<\/td>\n4.79%<\/td>\n29,027<\/td>\n15.94<\/td>\n1<\/td>\n+0.7842%<\/td>\n1,044.6<\/td>\n<\/tr>\n
Fixed-Floater<\/td>\n4.98%<\/td>\n5.00%<\/td>\n128,065<\/td>\n14.18<\/td>\n8<\/td>\n-0.1729%<\/td>\n1,022.0<\/td>\n<\/tr>\n
Floater<\/td>\n4.87%<\/td>\n0.32%<\/td>\n72,172<\/td>\n8.22<\/td>\n4<\/td>\n+0.9444%<\/td>\n1,050.7<\/td>\n<\/tr>\n
Op. Retract<\/td>\n4.83%<\/td>\n4.07%<\/td>\n81,890<\/td>\n3.43<\/td>\n16<\/td>\n-0.0089%<\/td>\n1,022.9<\/td>\n<\/tr>\n
Split-Share<\/td>\n5.04%<\/td>\n4.58%<\/td>\n103,213<\/td>\n3.91<\/td>\n15<\/td>\n-0.0171%<\/td>\n1,046.9<\/td>\n<\/tr>\n
Interest Bearing<\/td>\n6.20%<\/td>\n6.58%<\/td>\n62,625<\/td>\n4.65<\/td>\n3<\/td>\n+0.7230%<\/td>\n1,039.9<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.52%<\/td>\n5.20%<\/td>\n102,727<\/td>\n5.65<\/td>\n24<\/td>\n+0.0182%<\/td>\n1,024.7<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n5.07%<\/td>\n5.11%<\/td>\n308,888<\/td>\n15.32<\/td>\n39<\/td>\n+0.1314%<\/td>\n977.3<\/td>\n<\/tr>\n<\/table>\n<\/div>\n
\n\n\n\n\n\n\n\n\n\n
Major Price Changes<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nChange<\/td>\nNotes<\/td>\n<\/tr>\n
BCE.PR.Z<\/td>\nFixFloat<\/td>\n-1.0305%<\/td>\n\u00a0<\/td>\n<\/tr>\n
BNS.PR.M<\/td>\nPerpetualDiscount<\/td>\n+1.0545%<\/td>\nNow with a pre-tax bid-YTW of 4.92% based on a bid of 23.00 and a limitMaturity<\/a>.<\/td>\n<\/tr>\n
BAM.PR.B<\/td>\nFloater<\/td>\n+1.1438%<\/td>\nPays 70% of Canadian Prime; currently redeemable at $25.00; now bid at 24.76.<\/td>\n<\/tr>\n
BAM.PR.M<\/td>\nPerpetualDiscount<\/td>\n+1.1933%<\/td>\nNow with a pre-tax bid-YTW of 5.68% based on a bid of 21.20 and a limitMaturity. The virtually identical BAM.PR.N<\/a> issue is bid at 20.62 for a pre-tax bid-YTW of 5.84, and its redemption period starts six months later.<\/td>\n<\/tr>\n
BSD.PR.A<\/td>\nInterestBearing<\/td>\n+1.6129%<\/td>\nNow with a pre-tax bid-YTW of 7.15% (as interest) based on a bid of 9.45 and a hardMaturity<\/a> 2015-3-31 at 10.00<\/td>\n<\/tr>\n
BAM.PR.K<\/td>\nFloater<\/td>\n+2.6217%<\/td>\nPays 70% of Canada Prime, currently redeemable at 25.00, now bid at 24.66<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\n\n\n\n
Volume Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nVolume<\/td>\nNotes<\/td>\n<\/tr>\n
BNS.PR.M<\/td>\nPerpetualDiscount<\/td>\n94,840<\/td>\nNational Bank crossed 70,000 at 23.00. Also a big price-mover – see above.<\/td>\n<\/tr>\n
RY.PR.G<\/td>\nPerpetualDiscount<\/td>\n56,060<\/td>\nNow with a pre-tax bid-YTW of 4.98% based on a bid of 22.65 and a limitMaturity.<\/td>\n<\/tr>\n
CM.PR.I<\/td>\nPerpetualDiscount<\/td>\n31,230<\/td>\nNow with a pre-tax bid-YTW of 5.10% based on a bid of 23.19 and a limitMaturity.<\/td>\n<\/tr>\n
BNS.PR.L<\/td>\nPerpetualDiscount<\/td>\n17,360<\/td>\nNow with a pre-tax bid-YTW of 4.93% based on a bid of 22.95 and a limitMaturity.<\/td>\n<\/tr>\n
BAM.PR.M<\/td>\nPerpetualDiscount<\/td>\n15,060<\/td>\nAlso a big price-mover – see above.<\/td>\n<\/tr>\n<\/table>\n<\/div>\n

There were sixteen other $25-equivalent index-included issues trading over 10,000 shares today.\n<\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

OK, everybody, we can relax now! George W. Bush has stated “I’m not an economist, but my hope is that the market, if it functions normally, will be able to yield a soft landing. That’s …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[],"class_list":["post-1044","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/1044","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1044"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/1044\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1044"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1044"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1044"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}