{"id":14899,"date":"2011-05-02T19:30:40","date_gmt":"2011-05-02T23:30:40","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=14899"},"modified":"2011-05-02T19:30:40","modified_gmt":"2011-05-02T23:30:40","slug":"may-2-2011","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=14899","title":{"rendered":"May 2, 2011"},"content":{"rendered":"

The drive to protect incompetent traders<\/a> continues:<\/p>\n

U.S. prosecutors have joined regulators\u2019 investigation into whether some high-speed traders are manipulating markets by posting and immediately canceling waves of rapid-fire orders, two officials said.<\/p>\n

Justice Department investigators are \u201cworking closely\u201d with the Securities and Exchange Commission to review practices \u201cthat are potentially manipulative, like quote-stuffing,\u201d Marc Berger, chief of the Securities and Commodities Task Force at the U.S. Attorney\u2019s Office for the Southern District of New York, said today at an event in New York.<\/p>\n

While regulators previously said they were probing possibly abusive algorithmic trading practices, the attention of criminal authorities ramps up the stakes.<\/p><\/blockquote>\n

While researching something else, I ran across an opinion piece by Ed Waitzer titled New IIROC plan avoids putting duty on advisors to act in clients\u2019 interest<\/a> that illustrates the complete inability of professional regulators to analyze the simplest transaction. In talking about the “fiduciary responsibility” issue, he states:<\/p>\n

To understand the difference between a \u201csuitability\u201d and \u201cbest-interest\u201d standard, think of a student seeking advice at an electronics store about her need for a laptop. The salesperson recommends a highly priced unit with an expensive extended warranty \u2014 all designed to generate the highest commission. The laptop is suitable \u2014 it will satisfy the student\u2019s needs. It clearly isn\u2019t the best solution and a disclosure obligation isn\u2019t likely to stand in the way of a motivated salesperson. If the salesperson had been bound by a \u201cbest-interest\u201d standard, he would recommend a simpler, more reliable and affordable unit.<\/p><\/blockquote>\n

What utter balderdash. If the salesperson was bound by the “best-interest” standard and was being paid on commission, he would simply ensure that he had a plausible rationale for recommending the more profitable product as being in the student’s best interest. “What if it breaks? You’re on a tight budget! It might break at a bad time! You’re better off buying the extended warranty and fixing your costs. Then you can concentrate on your studies, instead of worrying about malfunctions in your machine.” No purpose would be served by a “best-interest” standard in the presence of commissioned sales except for the – very important, with respect to the employment prospects of some – generation of paperwork and checklists for the electronic consumer goods’ salesmen’s regulator.<\/p>\n

I get hate mail whenever I write about the fiduciary responsibility issue – such as January 24<\/a> – so all I can suggest is: if you want a fiduciary, hire one. I’m a Portfolio Manager, for instance. I get paid for Assets Under Management, not for transactions. I’m a fiduciary – in fact, I’m legally (OSC) and ethically (CFA) required to be. If you don’t want a fiduciary, don’t hire a Portfolio Manager – hire a stockbroker or mutual fund salesman. It’s really quite simple.<\/p>\n

It looks like Berkshire Hathaway has been stung by recent criticism<\/a> and is now attempting to worm its way back into the good graces of morons by criticisizing investment banks<\/a>:<\/p>\n

Charles Munger, whose Berkshire Hathaway Inc. (BRK\/A) holds $5 billion of options on Goldman Sachs Group Inc. (GS) stock, said the role of investment bankers in helping to mask Greece\u2019s financial troubles was \u201cperfectly disgusting.\u201d<\/p>\n

\u201cWall Street to some extent is deliberately trying to profit from sin, and I think it\u2019s a mistake,\u201d Munger told reporters yesterday after Berkshire\u2019s annual press conference in Omaha, Nebraska. \u201cWhy should an investment banker go to Greece to teach them how to pretend their finances are different from what they really are? Why isn\u2019t that a perfectly disgusting bit of human behavior?\u201d<\/p><\/blockquote>\n

Goldman’s conduct with respect to Greece was discussed on PrefBlog when the issue became fashionable (see, for example, March 1, 2010<\/a>). I eagerly await Munger’s next pronouncement, which may be on the topic of whether lawyers should represent Bad People. Still, I can’t blame him for chanting the slogan of the ‘finance as a cooperative game’ crowd – the Berkshire \/ Buffett \/ Munger mystique is worth what? 10%? 20% of their stock price? Who wants to guess?<\/p>\n

The US Administration recently announced drastic measures against a Public Enemy<\/a>. You know who I mean:<\/p>\n

\"\"<\/div>\n

Citing an epidemic of childhood obesity, regulators are taking aim at a range of tactics used to market foods high in sugar, fat or salt to children, including the use of cartoon characters like Toucan Sam, the brightly colored Froot Loops pitchman, who appears in television commercials and online games as well as on cereal boxes.<\/p>\n

Regulators are asking food makers and restaurant companies to make a choice: make your products healthier or stop advertising them to youngsters.<\/p>\n

\u201cToucan Sam can sell healthy food or junk food,\u201d said Dale Kunkel, a communications professor at the University of Arizona who studies the marketing of children\u2019s food. \u201cThis forces Toucan Sam to be associated with healthier products.\u201d<\/p><\/blockquote>\n

Walk the plank, Cap’n!<\/p>\n

\"\"<\/div>\n

It was another mixed day for the Canadian preferred share market, with DeemedRetractibles bouncing back (a little, anyway) from a sub-par month of April: PerpetualDiscounts lost 1bp, FixedResets gained 13bp and DeemedRetractibles won 31bp. The badly beaten up DeemedRetractibles from insurers were prominent on the performance highlights table. Volume was good. And now it’s time to watch the election news…<\/p>\n\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>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n0.5562 %<\/td>\n2,438.2<\/td>\n<\/tr>\n
FixedFloater<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n0.5562 %<\/td>\n3,667.0<\/td>\n<\/tr>\n
Floater<\/td>\n2.47 %<\/td>\n2.26 %<\/td>\n38,192<\/td>\n21.62<\/td>\n4<\/td>\n0.5562 %<\/td>\n2,632.6<\/td>\n<\/tr>\n
OpRet<\/td>\n4.91 %<\/td>\n3.20 %<\/td>\n59,032<\/td>\n2.04<\/td>\n8<\/td>\n0.0626 %<\/td>\n2,416.4<\/td>\n<\/tr>\n
SplitShare<\/td>\n5.21 %<\/td>\n-2.23 %<\/td>\n77,671<\/td>\n0.62<\/td>\n6<\/td>\n0.0750 %<\/td>\n2,497.1<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n0.0626 %<\/td>\n2,209.6<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.78 %<\/td>\n5.65 %<\/td>\n116,502<\/td>\n1.11<\/td>\n8<\/td>\n0.0149 %<\/td>\n2,054.6<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n5.57 %<\/td>\n5.58 %<\/td>\n147,548<\/td>\n14.40<\/td>\n16<\/td>\n-0.0119 %<\/td>\n2,126.6<\/td>\n<\/tr>\n
FixedReset<\/td>\n5.17 %<\/td>\n3.44 %<\/td>\n218,609<\/td>\n2.89<\/td>\n57<\/td>\n0.1330 %<\/td>\n2,295.7<\/td>\n<\/tr>\n
Deemed-Retractible<\/td>\n5.22 %<\/td>\n5.04 %<\/td>\n314,948<\/td>\n8.12<\/td>\n53<\/td>\n0.3083 %<\/td>\n2,100.9<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\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
GWO.PR.I<\/td>\nDeemed-Retractible<\/td>\n1.00 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 21.13
\nBid-YTW : 6.62 %<\/td>\n<\/tr>\n
SLF.PR.B<\/td>\nDeemed-Retractible<\/td>\n1.06 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 22.94
\nBid-YTW : 5.93 %<\/td>\n<\/tr>\n
TD.PR.C<\/td>\nFixedReset<\/td>\n1.10 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-03-02
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.70
\nBid-YTW : 3.10 %<\/td>\n<\/tr>\n
SLF.PR.E<\/td>\nDeemed-Retractible<\/td>\n1.14 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 21.36
\nBid-YTW : 6.49 %<\/td>\n<\/tr>\n
SLF.PR.D<\/td>\nDeemed-Retractible<\/td>\n1.14 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 21.26
\nBid-YTW : 6.49 %<\/td>\n<\/tr>\n
BNS.PR.O<\/td>\nDeemed-Retractible<\/td>\n1.21 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2017-05-26
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.00
\nBid-YTW : 4.88 %<\/td>\n<\/tr>\n
SLF.PR.C<\/td>\nDeemed-Retractible<\/td>\n1.24 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 21.30
\nBid-YTW : 6.47 %<\/td>\n<\/tr>\n
PWF.PR.A<\/td>\nFloater<\/td>\n1.25 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2041-05-02
\nMaturity Price : 23.19
\nEvaluated at bid price : 23.49
\nBid-YTW : 2.20 %<\/td>\n<\/tr>\n
MFC.PR.C<\/td>\nDeemed-Retractible<\/td>\n1.28 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 21.37
\nBid-YTW : 6.50 %<\/td>\n<\/tr>\n
BAM.PR.O<\/td>\nOpRet<\/td>\n1.44 %<\/td>\nYTW SCENARIO
\nMaturity Type : Option Certainty
\nMaturity Date\t: 2013-06-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.05
\nBid-YTW : 3.20 %<\/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
BNS.PR.O<\/td>\nDeemed-Retractible<\/td>\n81,675<\/td>\nNesbitt crossed 50,000 at 26.01.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2017-05-26
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.00
\nBid-YTW : 4.88 %<\/td>\n<\/tr>\n
BMO.PR.L<\/td>\nDeemed-Retractible<\/td>\n69,173<\/td>\nNesbitt crossed 60,000 at 25.85.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2017-06-24
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.76
\nBid-YTW : 5.18 %<\/td>\n<\/tr>\n
TRP.PR.C<\/td>\nFixedReset<\/td>\n36,135<\/td>\nScotia crossed 25,000 at 25.54.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2016-02-29
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.55
\nBid-YTW : 3.90 %<\/td>\n<\/tr>\n
TD.PR.G<\/td>\nFixedReset<\/td>\n35,911<\/td>\nRBC crossed 25,000 at 27.25.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-05-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 27.16
\nBid-YTW : 3.36 %<\/td>\n<\/tr>\n
HSB.PR.E<\/td>\nFixedReset<\/td>\n35,406<\/td>\nRBC crossed 25,000 at 27.35.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-07-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 27.35
\nBid-YTW : 3.76 %<\/td>\n<\/tr>\n
BMO.PR.Q<\/td>\nFixedReset<\/td>\n31,060<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.02
\nBid-YTW : 3.85 %<\/td>\n<\/tr>\n
There were 37 other index-included issues trading in excess of 10,000 shares.<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\n\n\n\n\n
Wide Spread Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nQuote Data and Yield Notes<\/td>\n<\/tr>\n
TRI.PR.B<\/td>\nFloater<\/td>\nQuote: 23.05 – 23.72
\nSpot Rate : 0.6700
\nAverage : 0.4321<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2041-05-02
\nMaturity Price : 22.77
\nEvaluated at bid price : 23.05
\nBid-YTW : 2.26 %<\/td>\n<\/tr>\n

FTS.PR.G<\/td>\nFixedReset<\/td>\nQuote: 26.26 – 26.73
\nSpot Rate : 0.4700
\nAverage : 0.3457<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2013-10-01
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.26
\nBid-YTW : 3.39 %<\/td>\n<\/tr>\n

BAM.PR.X<\/td>\nFixedReset<\/td>\nQuote: 24.63 – 24.96
\nSpot Rate : 0.3300
\nAverage : 0.2165<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2041-05-02
\nMaturity Price : 22.97
\nEvaluated at bid price : 24.63
\nBid-YTW : 4.38 %<\/td>\n<\/tr>\n

NA.PR.N<\/td>\nFixedReset<\/td>\nQuote: 26.15 – 26.50
\nSpot Rate : 0.3500
\nAverage : 0.2617<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2013-09-14
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.15
\nBid-YTW : 3.19 %<\/td>\n<\/tr>\n

CIU.PR.B<\/td>\nFixedReset<\/td>\nQuote: 27.68 – 27.94
\nSpot Rate : 0.2600
\nAverage : 0.1733<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-07-01
\nMaturity Price : 25.00
\nEvaluated at bid price : 27.68
\nBid-YTW : 3.54 %<\/td>\n<\/tr>\n

NA.PR.P<\/td>\nFixedReset<\/td>\nQuote: 27.75 – 28.05
\nSpot Rate : 0.3000
\nAverage : 0.2141<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-03-17
\nMaturity Price : 25.00
\nEvaluated at bid price : 27.75
\nBid-YTW : 2.58 %<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

The drive to protect incompetent traders continues: U.S. prosecutors have joined regulators\u2019 investigation into whether some high-speed traders are manipulating markets by posting and immediately canceling waves of rapid-fire orders, two officials said. Justice Department …<\/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-14899","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/14899","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=14899"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/14899\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14899"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14899"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14899"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}