{"id":15440,"date":"2011-06-23T01:13:23","date_gmt":"2011-06-23T05:13:23","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=15440"},"modified":"2011-06-23T01:13:23","modified_gmt":"2011-06-23T05:13:23","slug":"june-22-2011","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=15440","title":{"rendered":"June 22, 2011"},"content":{"rendered":"

Jim Kelsoe, proud portfolio manager of the worst bond fund in the history of the universe (so far), was last mentioned on PrefBlog on April 7, 2010<\/a>. Now he’s been barred from the industry<\/a>:<\/p>\n

According to the SEC\u2019s order, through his actions Kelsoe fraudulently prevented a reduction in the NAVs of the funds that should otherwise have occurred as a result of the deterioration in the subprime securities market in 2007. His misconduct occurred in the context of a nearly complete failure by Morgan Keegan to employ the fair valuation policies and procedures adopted by the funds\u2019 boards of directors to fair value the funds\u2019 portfolio securities.<\/p>\n

Under the settlement, Morgan Keegan is required to pay $25 million in disgorgement and interest and a $75 million penalty to the SEC to be placed into a Fair Fund for the benefit of investors harmed by the violations. Morgan Keegan will pay $100 million into a state fund that also will be distributed to investors. The firms are additionally required to abstain from involvement in valuing fair valued securities on behalf of investment companies for three years. Kelsoe agreed to pay $500,000 in penalties and be barred from the securities industry by the SEC, and Weller agreed to pay a penalty of $50,000.<\/p><\/blockquote>\n

The Fed is going to maintain an easy monetary policy<\/a>:<\/p>\n

To promote the ongoing economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to keep the target range for the federal funds rate at 0 to 1\/4 percent. The Committee continues to anticipate that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate for an extended period. The Committee will complete its purchases of $600 billion of longer-term Treasury securities by the end of this month and will maintain its existing policy of reinvesting principal payments from its securities holdings. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate.<\/p><\/blockquote>\n

The TMX-LSE deal has been sweetened<\/a>:<\/p>\n

A week before the London Stock Exchange and TMX Group Inc. ask shareholders to bless their planned marriage, the pair sweetened the pot Wednesday with a $4 per share special dividend for TMX shareholders.<\/p>\n

London exchange shareholders will also receive a special dividend of 84.1 pence per ordinary share, payable on closing.<\/p>\n

In the face of a rival hostile bid from Maple Group, a consortium of Canadian financial firms, the exchange partners said they also intend to increase the regular post-merger dividend \u201cto be consistent with the [higher] current regular dividend of TMX Group.\u201d<\/p><\/blockquote>\n

Here’s an interesting legal point – I know that some will misconstrue my interest and I’ll get into all kinds of trouble about this, but what the hell – regarding Galliano’s anti-semitic rant<\/a>:<\/p>\n

Under sentencing rules for hate speech, Galliano faces a maximum 22,500-euro ($32,500) fine and six months in prison if found guilty. His lawyer, Aurelien Hamelle, has said similar cases \u201cmost often\u201d result in fines rather than jail time.<\/p>\n

Geraldine Bloch, who filed a complaint over the February incident, testified that Jewish \u201cwas one of the terms said the most\u201d in Galliano\u2019s slurs against her. \u201cI don\u2019t know if he was drunk. He was a bit bizarre. He sweated a lot.\u201d<\/p>\n

Galliano\u2019s addictions can\u2019t excuse his statements, Eric Zerbib, a lawyer for LICRA, an international organization opposed to racism and anti-Semitism, said before today\u2019s testimony.<\/p>\n

It doesn\u2019t explain and it doesn\u2019t excuse anything,\u201d said Zerbib. \u201cIn vino, veritas. In wine, the truth. Wine has a liberating effect which allows one to know an individual\u2019s real personality, and given that the deeds were repeated several times, thus we know John Galliano\u2019s personality.\u201d<\/p><\/blockquote>\n

OK, so I don’t know the law here, but it’s rather an interesting point: Will Galliano be in trouble for having a shitty personality (which is exposed by drunkenness, yay! Or he may simply have reached in to the bag of tricks for the most offensive things he could think of.) or for expressing his personality (in which case drunkenness may be considered a mitigating factor)?<\/p>\n

It was a good day on the Canadian preferred share market with PerpetualDiscounts up 15bp, FixedResets winning 11bp and DeemedRetractibles gaining 13bp. Volatility was up a bit. Volume was very good.<\/p>\n

PerpetualDiscounts now yield 5.53%, equivalent to 7.19% interest at the standard equivalency factor of 1.3x. Long corporates<\/a> now yield about 5.25% (!) so the pre-tax interest equivalent spread is now about 195bp, a significant widening from the 185bp reported on June 15<\/a> as yields have gone in opposite directions.<\/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>\n-0.1634 %<\/td>\n2,465.5<\/td>\n<\/tr>\n
FixedFloater<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n-0.1634 %<\/td>\n3,708.1<\/td>\n<\/tr>\n
Floater<\/td>\n2.46 %<\/td>\n2.22 %<\/td>\n38,190<\/td>\n21.74<\/td>\n4<\/td>\n-0.1634 %<\/td>\n2,662.1<\/td>\n<\/tr>\n
OpRet<\/td>\n4.88 %<\/td>\n3.22 %<\/td>\n65,062<\/td>\n0.91<\/td>\n9<\/td>\n-0.2057 %<\/td>\n2,433.4<\/td>\n<\/tr>\n
SplitShare<\/td>\n5.25 %<\/td>\n-0.48 %<\/td>\n62,674<\/td>\n0.48<\/td>\n6<\/td>\n0.0833 %<\/td>\n2,505.0<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n-0.2057 %<\/td>\n2,225.2<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.66 %<\/td>\n5.20 %<\/td>\n143,364<\/td>\n1.37<\/td>\n12<\/td>\n0.0016 %<\/td>\n2,076.2<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n5.47 %<\/td>\n5.53 %<\/td>\n121,211<\/td>\n14.58<\/td>\n18<\/td>\n0.1455 %<\/td>\n2,182.1<\/td>\n<\/tr>\n
FixedReset<\/td>\n5.16 %<\/td>\n3.34 %<\/td>\n209,697<\/td>\n2.79<\/td>\n57<\/td>\n0.1148 %<\/td>\n2,310.0<\/td>\n<\/tr>\n
Deemed-Retractible<\/td>\n5.08 %<\/td>\n4.89 %<\/td>\n287,247<\/td>\n8.18<\/td>\n47<\/td>\n0.1299 %<\/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
IAG.PR.E<\/td>\nDeemed-Retractible<\/td>\n-1.01 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2019-01-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.55
\nBid-YTW : 5.66 %<\/td>\n<\/tr>\n
BMO.PR.H<\/td>\nDeemed-Retractible<\/td>\n1.10 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2013-03-27
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.81
\nBid-YTW : 3.63 %<\/td>\n<\/tr>\n
GWO.PR.G<\/td>\nDeemed-Retractible<\/td>\n1.32 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.57
\nBid-YTW : 5.44 %<\/td>\n<\/tr>\n
ELF.PR.F<\/td>\nPerpetual-Discount<\/td>\n2.45 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2041-06-22
\nMaturity Price : 22.76
\nEvaluated at bid price : 23.01
\nBid-YTW : 5.86 %<\/td>\n<\/tr>\n
GWO.PR.J<\/td>\nFixedReset<\/td>\n2.59 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-01-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.52
\nBid-YTW : 3.51 %<\/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>\nPerpetual-Premium<\/td>\n134,455<\/td>\nNesbitt crossed 100,000 at 25.35.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2012-11-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.34
\nBid-YTW : 5.20 %<\/td>\n<\/tr>\n
NEW.PR.C<\/td>\nSplitShare<\/td>\n106,500<\/td>\nNesbitt sold two blocks of 10,000 each to TD at 14.20, and six blocks of 10,000 each to anonymous, all at the same price.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2011-07-26
\nMaturity Price : 13.70
\nEvaluated at bid price : 14.14
\nBid-YTW : -26.56 %<\/td>\n<\/tr>\n
RY.PR.B<\/td>\nDeemed-Retractible<\/td>\n68,825<\/td>\nDesjardins bought two blocks of 10,000 each from anonymous, both at 24.77.
\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.75
\nBid-YTW : 4.89 %<\/td>\n<\/tr>\n
BNS.PR.L<\/td>\nDeemed-Retractible<\/td>\n60,305<\/td>\nTD crossed 25,000 at 24.54.
\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.60
\nBid-YTW : 4.80 %<\/td>\n<\/tr>\n
GWO.PR.N<\/td>\nFixedReset<\/td>\n52,534<\/td>\nDesjardins crossed 41,200 at 24.45.
\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.45
\nBid-YTW : 3.78 %<\/td>\n<\/tr>\n
BNS.PR.P<\/td>\nFixedReset<\/td>\n50,892<\/td>\nRBC crossed blocks of 25,000 and 20,000, both at 26.10.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2013-05-25
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.10
\nBid-YTW : 2.94 %<\/td>\n<\/tr>\n
There were 48 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
TD.PR.P<\/td>\nDeemed-Retractible<\/td>\nQuote: 25.91 – 26.33
\nSpot Rate : 0.4200
\nAverage : 0.2624<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2016-12-01
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.91
\nBid-YTW : 4.67 %<\/td>\n<\/tr>\n

GWO.PR.M<\/td>\nDeemed-Retractible<\/td>\nQuote: 25.30 – 25.75
\nSpot Rate : 0.4500
\nAverage : 0.3058<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2019-04-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.30
\nBid-YTW : 5.63 %<\/td>\n<\/tr>\n

PWF.PR.A<\/td>\nFloater<\/td>\nQuote: 23.51 – 23.99
\nSpot Rate : 0.4800
\nAverage : 0.3592<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2041-06-22
\nMaturity Price : 23.21
\nEvaluated at bid price : 23.51
\nBid-YTW : 2.21 %<\/td>\n<\/tr>\n

TD.PR.R<\/td>\nDeemed-Retractible<\/td>\nQuote: 26.33 – 26.68
\nSpot Rate : 0.3500
\nAverage : 0.2307<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2017-05-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.33
\nBid-YTW : 4.75 %<\/td>\n<\/tr>\n

PWF.PR.O<\/td>\nPerpetual-Premium<\/td>\nQuote: 25.35 – 25.66
\nSpot Rate : 0.3100
\nAverage : 0.2277<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2018-11-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.35
\nBid-YTW : 5.75 %<\/td>\n<\/tr>\n

SLF.PR.G<\/td>\nFixedReset<\/td>\nQuote: 25.33 – 25.60
\nSpot Rate : 0.2700
\nAverage : 0.1882<\/p>\n

YTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.33
\nBid-YTW : 3.70 %<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

Jim Kelsoe, proud portfolio manager of the worst bond fund in the history of the universe (so far), was last mentioned on PrefBlog on April 7, 2010. Now he’s been barred from the industry: According …<\/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-15440","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/15440","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=15440"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/15440\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15440"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15440"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15440"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}