{"id":11001,"date":"2010-05-31T20:12:11","date_gmt":"2010-06-01T00:12:11","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=11001"},"modified":"2010-05-31T20:12:11","modified_gmt":"2010-06-01T00:12:11","slug":"may-31-2010","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=11001","title":{"rendered":"May 31, 2010"},"content":{"rendered":"

There’s a scuffle brewing over FASB’s proposal that bank loans be marked-to-market<\/a>:<\/p>\n

A U.S. accounting board\u2019s proposal that would require banks to report the fair value of loans on their books will lead to reduced lending, a former chairman of the Federal Deposit Insurance Corp. said.<\/p>\n

\u201cThis is a terribly destructive idea to even propose,\u201d William Isaac said in a telephone interview today. Just by making the proposal, the Financial Accounting Standards Board will lead banks to quit making loans without an easily discernable market value, and keep the ones they do make to shorter maturities, Isaac said.
…<\/b>
The proposal comes \u201cin the face of worldwide condemnation,\u201d Isaac said. It conflicts with the recommendations of the Group of 20 nations, the Basel Committee on Banking Supervision and the International Accounting Standards Board, according to the American Bankers Association, which also opposes the plan.<\/p>\n

David Larsen, who serves on FASB\u2019s Valuation Resource Group, said the volatility created by markets and fair value \u201cis there whether or not it is measured.\u201d<\/p>\n

\u201cIt comes down to the question, is greater transparency of help to users of financial statements?\u201d said Larsen, a managing director at New York-based Duff & Phelps Corp.<\/p>\n

Mark-to-market accounting destroyed $500 billion of bank capital as traders marked down all assets during the crisis by a total of 27 percent, and many of those values have now returned to near par, Isaac said. \u201cNow FASB is going to spread this disease throughout the system,\u201d he said.<\/p><\/blockquote>\n

The trouble with mark-to-market is that it assumes an infinitely liquid market. Sometimes, this embedded assumption gets a little frayed around the edges.<\/p>\n

Congrats to my nephew Sam Arfin<\/a>:<\/p>\n

TORONTO INVITATIONAL<\/p>\n

Rowing \u2013 Champions … Boys\u2019 – 1000 m T1x – Sam Arfin, Birchmount Park, 4:39; 1000 m T2x \u2013 Sam Arfin and Oscar Kahu, Birchmount Park, 4:15;<\/p><\/blockquote>\n

It was a quiet but positive day for Canadian preferred shares, with PerpetualDiscounts gaining 15bp and FixedResets up 8bp.<\/p>\n

PerpetualDiscounts now yield 6.29%, equivalent to 8.81% interest at the standard equivalency factor of 1.4x. Long corporates<\/a> now yield 5.65% (maybe a hair more?) after scoring a total return of +0.46% for the month, so the pre-tax interest-equivalent spread (also called the Seniority Spread) now stands at 315bp, a 10bp tightening from the 325bp recorded on May 26<\/a>.<\/p>\n

And that’s it for another month!<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n
HIMIPref™ Preferred Indices
These values reflect the December 2008 revision of the HIMIPref™ Indices<\/strong>
Values are provisional and are finalized monthly<\/td>\n<\/tr>\n
Index<\/td>\nMean
Current
Yield
(at bid)<\/td>\n		Median
YTW<\/td>\n		Median
Average
Trading
Value<\/td>\n		Median
Mod Dur
(YTW)<\/td>\n		Issues<\/td>\nDay’s Perf.<\/td>\nIndex Value<\/td>\n<\/tr>\n
Ratchet<\/td>\n2.67 %<\/td>\n2.74 %<\/td>\n45,481<\/td>\n20.70<\/td>\n1<\/td>\n0.0000 %<\/td>\n2,077.9<\/td>\n<\/tr>\n
FixedFloater<\/td>\n5.19 %<\/td>\n3.26 %<\/td>\n31,917<\/td>\n20.00<\/td>\n1<\/td>\n0.6728 %<\/td>\n3,083.4<\/td>\n<\/tr>\n
Floater<\/td>\n2.16 %<\/td>\n2.49 %<\/td>\n97,678<\/td>\n21.01<\/td>\n3<\/td>\n0.1281 %<\/td>\n2,249.1<\/td>\n<\/tr>\n
OpRet<\/td>\n4.90 %<\/td>\n4.00 %<\/td>\n95,458<\/td>\n1.71<\/td>\n11<\/td>\n-0.0568 %<\/td>\n2,301.4<\/td>\n<\/tr>\n
SplitShare<\/td>\n6.45 %<\/td>\n5.40 %<\/td>\n110,905<\/td>\n0.08<\/td>\n2<\/td>\n-0.3325 %<\/td>\n2,150.0<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n-0.0568 %<\/td>\n2,104.4<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.55 %<\/td>\n4.80 %<\/td>\n22,322<\/td>\n15.73<\/td>\n1<\/td>\n0.0000 %<\/td>\n1,817.0<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n6.22 %<\/td>\n6.29 %<\/td>\n208,177<\/td>\n13.50<\/td>\n77<\/td>\n0.1451 %<\/td>\n1,721.8<\/td>\n<\/tr>\n
FixedReset<\/td>\n5.48 %<\/td>\n4.28 %<\/td>\n439,196<\/td>\n3.53<\/td>\n45<\/td>\n0.0762 %<\/td>\n2,153.6<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\n\n\n\n
Performance Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nChange<\/td>\nNotes<\/td>\n<\/tr>\n
ENB.PR.A<\/td>\nPerpetual-Discount<\/td>\n-1.82 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2040-05-31
\nMaturity Price : 23.38
\nEvaluated at bid price : 23.67
\nBid-YTW : 5.83 %<\/td>\n<\/tr>\n
GWO.PR.M<\/td>\nPerpetual-Discount<\/td>\n-1.15 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2040-05-31
\nMaturity Price : 22.69
\nEvaluated at bid price : 22.81
\nBid-YTW : 6.36 %<\/td>\n<\/tr>\n
POW.PR.A<\/td>\nPerpetual-Discount<\/td>\n1.04 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2040-05-31
\nMaturity Price : 22.11
\nEvaluated at bid price : 22.33
\nBid-YTW : 6.37 %<\/td>\n<\/tr>\n
ELF.PR.F<\/td>\nPerpetual-Discount<\/td>\n1.32 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2040-05-31
\nMaturity Price : 19.25
\nEvaluated at bid price : 19.25
\nBid-YTW : 7.01 %<\/td>\n<\/tr>\n
CL.PR.B<\/td>\nPerpetual-Discount<\/td>\n1.62 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2040-05-31
\nMaturity Price : 24.54
\nEvaluated at bid price : 24.78
\nBid-YTW : 6.30 %<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\n\n\n\n\n\n
Volume Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nShares
Traded<\/td>\n		Notes<\/td>\n<\/tr>\n
GWO.PR.I<\/td>\nPerpetual-Discount<\/td>\n65,944<\/td>\nTD crossed blocks of 30,000 and 25,000 at 17.70.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2040-05-31
\nMaturity Price : 17.64
\nEvaluated at bid price : 17.64
\nBid-YTW : 6.39 %<\/td>\n<\/tr>\n
TD.PR.O<\/td>\nPerpetual-Discount<\/td>\n55,871<\/td>\nNesbitt crossed 30,000 at 20.20.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2040-05-31
\nMaturity Price : 20.22
\nEvaluated at bid price : 20.22
\nBid-YTW : 6.08 %<\/td>\n<\/tr>\n
TD.PR.M<\/td>\nOpRet<\/td>\n32,900<\/td>\nTD crosse 30,000 at 25.88.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2011-05-30
\nMaturity Price : 25.50
\nEvaluated at bid price : 25.80
\nBid-YTW : 3.82 %<\/td>\n<\/tr>\n
MFC.PR.A<\/td>\nOpRet<\/td>\n24,225<\/td>\nTD crossed 20,000 at 25.25.
\nYTW SCENARIO
\nMaturity Type : Soft Maturity
\nMaturity Date\t: 2015-12-18
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.10
\nBid-YTW : 4.00 %<\/td>\n<\/tr>\n
GWO.PR.G<\/td>\nPerpetual-Discount<\/td>\n22,884<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2040-05-31
\nMaturity Price : 20.60
\nEvaluated at bid price : 20.60
\nBid-YTW : 6.32 %<\/td>\n<\/tr>\n
SLF.PR.G<\/td>\nFixedReset<\/td>\n20,221<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2040-05-31
\nMaturity Price : 24.40
\nEvaluated at bid price : 24.45
\nBid-YTW : 4.25 %<\/td>\n<\/tr>\n
There were 16 other index-included issues trading in excess of 10,000 shares.<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

There’s a scuffle brewing over FASB’s proposal that bank loans be marked-to-market: A U.S. accounting board\u2019s proposal that would require banks to report the fair value of loans on their books will lead to reduced …<\/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-11001","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/11001","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=11001"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/11001\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11001"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11001"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11001"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}