{"id":13082,"date":"2010-11-23T23:37:28","date_gmt":"2010-11-24T03:37:28","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=13082"},"modified":"2010-11-23T23:37:28","modified_gmt":"2010-11-24T03:37:28","slug":"november-23-2010","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=13082","title":{"rendered":"November 23, 2010"},"content":{"rendered":"

The Irish government has fallen<\/a>:<\/p>\n

Amid calls for his immediate resignation from at least two MPs in his own Fianna Fail party and the withdrawal of support from coalition partners the Green Party, Prime Minister Brian Cowen was forced on Monday to announce the pending dissolution of his government.<\/p>\n

\u201cThere will be a time for political accountability to the electorate,\u201d Mr. Cowen said in a terse address Monday night in which he pleaded with MPs to keep his government afloat until the austerity budget passes in exchange for an election in January.<\/p><\/blockquote>\n

But contagion has set in<\/a>:<\/p>\n

German Chancellor Angela Merkel said the prospect of serial European bailouts was \u201cexceptionally serious,\u201d sending the euro to a three-month low as officials estimated saving Ireland will cost 85 billion euros ($114 billion).<\/p>\n

Irish bonds dropped and the premium that investors demand to hold Spanish debt over German counterparts jumped to a euro- era record as the relief rallies triggered by Ireland\u2019s Nov. 21 aid request evaporated. Traders are now betting the turmoil that started in Greece a year ago will spread to Portugal and Spain.<\/p>\n

\u201cThe markets currently have virtually zero confidence that the bailout in Ireland will solve the European crisis,\u201d Charles Diebel and David Page, fixed-income strategists at Lloyds TSB Corporate Markets in London, said in a note today. \u201cWith markets effectively in a position to dictate policy, the risk is that the credibility crisis shifts to more sizeable European Union countries and thereby poses a greater risk to the system as a whole.\u201d <\/p><\/blockquote>\n

And S&P has downgraded Ireland<\/a>:<\/p>\n

S&P cut Ireland\u2019s long-term sovereign rating to A from AA- and the short-term grade to A-1 from A-1+, today\u2019s statement said.<\/p><\/blockquote>\n

Wanna buy a bank<\/a>?:<\/p>\n

Ireland’s banks are effectively up for sale, central bank Governor Patrick Honohan said on Tuesday as Dublin sought aid from the European Union and International Monetary Fund to prop up its lenders.<\/p>\n

“They are for sale as far as I am concerned,” Honohan said. “I’ve been an advocate for a number of years for small countries to have foreign owners for their banks.”<\/p><\/blockquote>\n

MFC is not having a nice time<\/a>:<\/p>\n

\nShares of Manulife Financial Corp. fell nearly 5% at one point on Monday after a downgrade at Citigroup. Analyst Colin Devine cut his rating to Sell from Buy and reduced his price target to US$14.50 from US$21 after a disappointing trip to the life insurance company\u2019s Annual Investor Day on Friday.<\/p>\n

Information provided at the meeting led Mr. Devine to estimate that roughly 35% of Manulife\u2019s capital is tied up supporting three products at its U.S. John Hancock operations: living benefit variable annuities (VA), individual long-term care (LTC), and secondary guarantee universal life (SGUL). By the analyst\u2019s count, each is responsible for losses of at least $1-billion since the beginning of 2009.<\/p>\n

Yet the analyst pointed out that management only provided one slide and \u201cdid not devote even five minutes to discussing what had gone wrong with these products or what steps were available and a timetable to address them.\u201d<\/p><\/blockquote>\n

Government Motors’ hybrids are a big hit<\/a>!<\/p>\n

President Barack Obama\u2019s administration has bought almost a fourth of the Ford Motor Co. and General Motors Co. hybrid vehicles sold since he took office, accelerating federal purchases as consumer demand wanes.<\/p><\/blockquote>\n

Q: What happens when a draconian law hits reality? A: Regulators ursurp power<\/a>:<\/p>\n

The Securities and Exchange Commission extended the ability of asset-backed bond issuers to omit credit ratings from filings to comply with the Dodd-Frank financial reform act that became U.S. law in July.<\/p>\n

Pending further notice, the SEC won\u2019t recommend enforcement action if an asset-backed issuer doesn\u2019t include the ratings disclosure required by the legislation, according to a letter today from Katherine Hsu, senior special counsel.
…<\/b>
\u201cWithout this extension, the entire public securitization market would have closed in late January,\u201d Tom Deutsch, executive director of the American Securitization Forum, said today in an e-mailed statement.<\/p><\/blockquote>\n

Well, sure. That’s what happens with every zero-tolerance law, right? Instead of a judicial process, you get a regulatory process, with selective reporting and private decisions.<\/p>\n

BMO redeemed some more BOaTS<\/a>:<\/p>\n

Bank of Montreal is back in the market to redeem its second batch of trust capital securities, better known as BMO BOaTS.<\/p>\n

This batch, Series B, totals $400-million and pays 6.64 per cent interest annually.
…<\/b>
There are two factors at play here in BMO\u2019s decision to redeem. For starters, as of year-end 2010, holders of these securities can exchange them into a series of preferred shares.<\/p>\n

But maybe more important now, under Basel III, these innovative securities will no longer count as Tier 1 capital. Starting in 2013, the amount that they contribute to Tier 1 capital will be phased out by 10 per cent each year, for 10 years.<\/p><\/blockquote>\n

The FDIC has released its Quarterly Banking Profile: 3Q10<\/a>, with highlights:<\/p>\n

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