{"id":15195,"date":"2011-05-27T22:34:22","date_gmt":"2011-05-28T02:34:22","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=15195"},"modified":"2011-05-27T22:34:22","modified_gmt":"2011-05-28T02:34:22","slug":"may-27-2011","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=15195","title":{"rendered":"May 27, 2011"},"content":{"rendered":"

US housing sales are slow<\/a>:<\/p>\n

The number of Americans signing contracts to buy previously owned homes plunged more than forecast in April, a sign the industry that triggered the recession continues to struggle.<\/p>\n

The index of pending home resales declined 12 percent after a revised 3.5 percent increase the prior month, the National Association of Realtors said today in Washington. The median forecast in a Bloomberg News survey called for a 1 percent decline.<\/p>\n

The prospect that foreclosures will continue to drive down property values may keep buyers on the sidelines awaiting further price declines. Unemployment at 9 percent and stricter credit requirements are further signs that a housing recovery may take years to unfold.<\/p><\/blockquote>\n

And things are unfolding elsewhere, too<\/a>:<\/p>\n

Dexia SA (DEXB), the bank that took the most Federal Reserve discount-window help in October 2008, said it will take a charge of 3.6 billion euros ($5.1 billion) for the anticipated sale of mostly U.S. residential mortgage-backed securities and long-term bond disposals.
…<\/b>
By writing down the U.S. asset-backed securities to their market value, Dexia said it will be in a position to waive the Belgian and French state guarantees covering losses on those assets and renegotiate the terms and consequences arising from the state support.<\/p><\/blockquote>\n

Note that they’re going to “take a charge” rather than cover the loss with reserves. That gives you a nice warm feeling about European bank balance sheets, doesn’t it?<\/p>\n

Long-term readers of PrefBlog will recognize one of my hobby-horses: genetic modification of cellular organisms to take carbon dioxide out of the air (good) and convert it to fuel (better). So I was pleased to see news of the Solazyme IPO<\/a>:<\/p>\n

Solazyme Inc., the developer of oil products from genetically modified algae, jumped as much as 22 percent in its first day of trading.<\/p>\n

The shares rose $3.15, or 18 percent, to $21.15 at 1:18 p.m. in Nasdaq Stock Market trading. Earlier it reached $22, a 22 percent gain from its initial price of $18 a share. The South San Francisco, California-based company sold 10.975 million shares, raising $197.55 million, according to a regulatory filing.<\/p>\n

The demand validates the technology used to convert organic material into biofuels and specialty chemicals, according to Pavel Molchanov, an analyst for Raymond James & Associates Inc. It remains to be seen whether Solazyme, or rivals that are developing similar products such as Gevo Inc., and Amyris Inc. (AMRS), can do so cost-effectively.<\/p>\n

\u201cThe science in their process works,\u201d Molchanov said today in a telephone interview. \u201cSo as we think about the risk factors that investors in these companies have to confront, it\u2019s not a science risk. It\u2019s how successfully can they scale up to be a large production business.\u201d <\/p><\/blockquote>\n

The logic of the third paragraph there rivals that seen during the Tech Boom, but never mind (the demand validates the science? Let’s take a vote on gravity!). Note that I have no idea of whether the science works, whether the engineering for scale-up is promising, or whether the shares are good value at the price … I’m just happy to see that a technology I’ve wondered about for thirty years is coming to market.<\/p>\n

What the world needs is a new phrase, something along the lines of “as vindictive as an American”. When one of them takes a stand against retroactive rules<\/a>, it’s considered news:<\/p>\n

I join the Chairman in thanking the Division of Corporation Finance and the other divisions and offices that have contributed to the proposal under consideration today.<\/p>\n

As required by Sec. 926 of the Dodd-Frank Act, we are proposing rules that would disqualify securities offerings involving certain \u201cfelons and other \u2018bad actors\u2019\u201d from reliance on the safe harbor from Securities Act registration provided by Rule 506 of Regulation D.<\/p>\n

Unfortunately, however, I am not able to support this proposing release, because the proposed rules would apply retroactively by disqualifying transaction participants from engaging in Rule 506 offerings for conduct occurring prior to enactment of the Dodd-Frank Act.<\/p>\n

I want to emphasize at the outset that I do not disagree, as a policy matter, with disqualifying so-called \u201cbad actors\u201d from Rule 506 offerings.
…<\/b>
Where, as here, the statute and jurisprudence do not, in my view, support retroactive application of these rules, it would be more appropriate to apply our rules prospectively, and\/or seek from Congress a technical amendment to the statute to clarify that these provisions should be applied retroactively if that was indeed Congressional intent.<\/p><\/blockquote>\n

Rule 506 of Regulation D<\/a> is, basically, the accredited investor exemption.<\/p>\n

Yellow Fever continued to plague the market.<\/p>\n

\n\n\n\n\n\n\n\n
YLO Issues, 2011-5-27<\/td>\n<\/tr>\n
Ticker<\/td>\nQuote
5\/26<\/td>\n		Quote
5\/27<\/td>\n		Bid YTW
5\/27<\/td>\n		YTW
Scenario
5\/27<\/td>\n		Performance
5\/27
(bid\/bid)<\/td>\n<\/tr>\n
YLO.PR.A<\/td>\n22.75-85<\/td>\n23.10-20<\/td>\n10.02%<\/td>\nSoft Maturity
2012-12-30<\/td>\n		+1.54%<\/td>\n<\/tr>\n
YLO.PR.B<\/td>\n17.06-10<\/td>\n16.40-82<\/td>\n13.81%<\/td>\nSoft Maturity
2017-06-29<\/td>\n		-3.87%<\/td>\n<\/tr>\n
YLO.PR.C<\/td>\n18.20-60<\/td>\n17.67-33<\/td>\n9.56%<\/td>\nLimit Maturity<\/td>\n-2.91%<\/td>\n<\/tr>\n
YLO.PR.D<\/td>\n18.99-09<\/td>\n18.32-40<\/td>\n9.39%<\/td>\nLimit Maturity<\/td>\n-3.53%<\/td>\n<\/tr>\n<\/table>\n<\/div>\n

All that aside, the Canadian preferred share market had a reasonably good day overall, with PerpetualDiscounts gaining 18bp, FixedResets up 4bp and DeemedRetractibles off 1bp. Volatility was muted. Good volume was dominated by CM issues.<\/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>\n0.0466 %<\/td>\n2,463.7<\/td>\n<\/tr>\n
FixedFloater<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n0.0466 %<\/td>\n3,705.4<\/td>\n<\/tr>\n
Floater<\/td>\n2.45 %<\/td>\n2.25 %<\/td>\n43,834<\/td>\n21.63<\/td>\n4<\/td>\n0.0466 %<\/td>\n2,660.2<\/td>\n<\/tr>\n
OpRet<\/td>\n4.87 %<\/td>\n3.50 %<\/td>\n64,156<\/td>\n0.98<\/td>\n9<\/td>\n0.1203 %<\/td>\n2,421.4<\/td>\n<\/tr>\n
SplitShare<\/td>\n5.22 %<\/td>\n-2.17 %<\/td>\n60,519<\/td>\n0.55<\/td>\n6<\/td>\n-0.1144 %<\/td>\n2,511.3<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n0.1203 %<\/td>\n2,214.2<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.72 %<\/td>\n4.81 %<\/td>\n142,542<\/td>\n0.82<\/td>\n9<\/td>\n0.0505 %<\/td>\n2,073.1<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n5.47 %<\/td>\n5.55 %<\/td>\n132,712<\/td>\n14.49<\/td>\n15<\/td>\n0.1816 %<\/td>\n2,174.0<\/td>\n<\/tr>\n
FixedReset<\/td>\n5.15 %<\/td>\n3.19 %<\/td>\n196,387<\/td>\n2.85<\/td>\n57<\/td>\n0.0369 %<\/td>\n2,309.9<\/td>\n<\/tr>\n
Deemed-Retractible<\/td>\n5.12 %<\/td>\n4.87 %<\/td>\n330,095<\/td>\n7.98<\/td>\n53<\/td>\n-0.0130 %<\/td>\n2,150.5<\/td>\n<\/tr>\n<\/table>\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
BNS.PR.O<\/td>\nDeemed-Retractible<\/td>\n-1.03 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2017-05-26
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.02
\nBid-YTW : 4.93 %<\/td>\n<\/tr>\n
PWF.PR.E<\/td>\nPerpetual-Discount<\/td>\n1.01 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2041-05-27
\nMaturity Price : 23.65
\nEvaluated at bid price : 25.00
\nBid-YTW : 5.49 %<\/td>\n<\/tr>\n
BAM.PR.R<\/td>\nFixedReset<\/td>\n1.17 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2041-05-27
\nMaturity Price : 23.42
\nEvaluated at bid price : 25.91
\nBid-YTW : 4.60 %<\/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
CM.PR.E<\/td>\nDeemed-Retractible<\/td>\n217,480<\/td>\nSeeking NVCC status<\/a>.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2012-11-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.40
\nBid-YTW : 4.80 %<\/td>\n<\/tr>\n
CM.PR.H<\/td>\nDeemed-Retractible<\/td>\n135,283<\/td>\nCalled for redemption<\/a>.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2011-06-26
\nMaturity Price : 25.75
\nEvaluated at bid price : 25.90
\nBid-YTW : 1.76 %<\/td>\n<\/tr>\n
CM.PR.D<\/td>\nDeemed-Retractible<\/td>\n124,704<\/td>\nSeeking NVCC status<\/a>.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2011-06-26
\nMaturity Price : 25.25
\nEvaluated at bid price : 25.40
\nBid-YTW : 3.59 %<\/td>\n<\/tr>\n
CM.PR.I<\/td>\nDeemed-Retractible<\/td>\n61,012<\/td>\nRBC crossed 11,000 at 25.15; Desjardins crossed 10,000 at 25.12.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2016-03-01
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.11
\nBid-YTW : 4.70 %<\/td>\n<\/tr>\n
HSE.PR.A<\/td>\nFixedReset<\/td>\n55,485<\/td>\nDesjardins crossed 25,000 at 25.60.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2021-04-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.55
\nBid-YTW : 4.13 %<\/td>\n<\/tr>\n
RY.PR.W<\/td>\nDeemed-Retractible<\/td>\n53,935<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.81
\nBid-YTW : 5.03 %<\/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
FTS.PR.H<\/td>\nFixedReset<\/td>\nQuote: 25.28 – 25.75
\nSpot Rate : 0.4700
\nAverage : 0.2833<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2041-05-27
\nMaturity Price : 25.23
\nEvaluated at bid price : 25.28
\nBid-YTW : 3.85 %<\/td>\n<\/tr>\n

RY.PR.G<\/td>\nDeemed-Retractible<\/td>\nQuote: 24.43 – 24.79
\nSpot Rate : 0.3600
\nAverage : 0.2520<\/p>\n

YTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.43
\nBid-YTW : 4.80 %<\/td>\n<\/tr>\n

POW.PR.D<\/td>\nPerpetual-Discount<\/td>\nQuote: 23.83 – 24.19
\nSpot Rate : 0.3600
\nAverage : 0.2749<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2041-05-27
\nMaturity Price : 23.56
\nEvaluated at bid price : 23.83
\nBid-YTW : 5.30 %<\/td>\n<\/tr>\n

GWO.PR.F<\/td>\nDeemed-Retractible<\/td>\nQuote: 25.60 – 25.96
\nSpot Rate : 0.3600
\nAverage : 0.2789<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2011-10-30
\nMaturity Price : 25.25
\nEvaluated at bid price : 25.60
\nBid-YTW : 4.73 %<\/td>\n<\/tr>\n

SLF.PR.C<\/td>\nDeemed-Retractible<\/td>\nQuote: 22.35 – 22.58
\nSpot Rate : 0.2300
\nAverage : 0.1605<\/p>\n

YTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 22.35
\nBid-YTW : 5.77 %<\/td>\n<\/tr>\n

BNS.PR.O<\/td>\nDeemed-Retractible<\/td>\nQuote: 26.02 – 26.20
\nSpot Rate : 0.1800
\nAverage : 0.1161<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2017-05-26
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.02
\nBid-YTW : 4.93 %<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

US housing sales are slow: The number of Americans signing contracts to buy previously owned homes plunged more than forecast in April, a sign the industry that triggered the recession continues to struggle. The index …<\/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-15195","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/15195","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=15195"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/15195\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15195"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15195"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15195"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}