{"id":1686,"date":"2008-01-15T21:17:43","date_gmt":"2008-01-16T01:17:43","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=1686"},"modified":"2008-01-15T21:17:43","modified_gmt":"2008-01-16T01:17:43","slug":"january-15-2008","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=1686","title":{"rendered":"January 15, 2008"},"content":{"rendered":"

Well, stores didn’t sell anything in December<\/a>\u00a0(which attracted a lot of comment<\/a>, so investors thought they’d fill the need<\/a>. And the equity infusions<\/a> just kept coming:<\/p>\n

Citigroup, the biggest U.S. bank, is getting $14.5 billion from investors including the governments of Singapore and Kuwait, former Chairman Sanford Weill and Saudi Prince Alwaleed bin Talal, the New York-based company said today in a statement. Merrill, the largest brokerage, will receive $6.6 billion from a group led by Tokyo-based Mizuho Financial Group Inc., the Kuwait Investment Authority and the Korean Investment Corp.<\/p>\n

Wall Street banks have now raised $59 billion, mostly from investors in the Middle East and Asia, to shore up balance sheets battered by more than $100 billion of writedowns from the declining values of mortgage-related assets. Citigroup was propped up in November by a $7.5 billion investment from the Abu Dhabi Investment Authority. New York-based Merrill was helped by a $5.6 billion cash infusion last month from Singapore’s Temasek Holdings Pte. and U.S. fund manager Davis Selected Advisors LP.<\/p><\/blockquote>\n

As was reported on January 11<\/a>, the capital to bail out Countrywide is actually domestic, but Bank of America is by no mean immune<\/a> to the shift in fortunes:<\/p>\n

Bank of America Corp., the second- largest U.S. bank, plans to cut 650 jobs from its corporate and investment bank and sell the prime brokerage unit that caters to hedge funds.<\/p>\n

The bank is slashing its so-called structured products business, which packaged and sold real estate loans to investors, and will reduce investment banking in Europe and the U.S., Chief Executive Officer Kenneth Lewis said in a meeting with reporters today in New York.<\/p><\/blockquote>\n

Meanwhile, Menzie Chinn of Econbrowser<\/em> attempts to cheer us up by reminding us of the preferred government response to recessions<\/a>:<\/p>\n

One reason to favor temporary modifications to automatic stabilizers, as opposed to permanent changes in the tax code, is that the current full-employment budget balance is probably around negative one percentage point of GDP, and we are facing an expanding deficit in the future<\/a>, given the press of demographics and medical costs (see Orszag’s speech<\/a> [pdf]).<\/p><\/blockquote>\n

The interesting stories in Canada are, of course, Quebecor and BCE<\/a>. Quebecor is close enough to crisis that I gave it its own post<\/a> today; Bloomberg has an interesting filler story<\/a>:<\/p>\n

A telephone repairman for Canada’s BCE Inc. barreled through a red light in May when the brakes on his company truck failed. He managed to stop only by shifting into low gear and hauling on the handbrake.<\/p>\n

As investors led by a teachers’ retirement fund prepare to purchase BCE for C$52 billion ($51.1 billion), analysts say the cost of avoiding such perils may require selling all or part of its C$3.5 billion-a-year wireless business. Canada’s largest phone company needs to repair an aging fleet of trucks and add a TV service while paying down about C$34 billion in debt.
\n…<\/strong>
\nThe wireless unit, whose growth is second only to the smaller satellite-TV division, may be the only BCE business that could attract investors, said Lawrence Surtees, an analyst at IDC Canada in Toronto who wrote a book on BCE. “Everything else is either flat or declining,” he said. He didn’t have an estimate for what the unit might fetch.<\/p><\/blockquote>\n

PerpetualDiscounts finally had a down day today, due largely to three issues\u00a0of a certain bank that will remain nameless. The last\u00a0down-day for this index\u00a0was December 21 (the penultimate day of tax loss selling – and the\u00a0last full day, since Dec 24 was an early-close); since then, the\u00a0PerpetualDiscount index increased\u00a04.56% to January 14, with thirteen consecutive trading days of gains.\u00a0<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n
Note that these indices are experimental; the absolute and relative daily values are expected to change in the final version. In this version, index values are based at 1,000.0 on 2006-6-30<\/strong><\/td>\n<\/tr>\n
Index<\/td>\nMean Current Yield (at bid)<\/td>\nMean YTW<\/td>\nMean Average Trading Value<\/td>\nMean Mod Dur (YTW)<\/td>\nIssues<\/td>\nDay’s Perf.<\/td>\nIndex Value<\/td>\n<\/tr>\n
Ratchet<\/td>\n5.36%<\/td>\n5.38%<\/td>\n57,070<\/td>\n14.84<\/td>\n2<\/td>\n-0.0609%<\/td>\n1,070.9<\/td>\n<\/tr>\n
Fixed-Floater<\/td>\n4.92%<\/td>\n5.38%<\/td>\n73,412<\/td>\n15.02<\/td>\n9<\/td>\n-0.0017%<\/td>\n1,037.4<\/td>\n<\/tr>\n
Floater<\/td>\n5.24%<\/td>\n5.28%<\/td>\n90,437<\/td>\n15.07<\/td>\n3<\/td>\n+0.2397%<\/td>\n840.5<\/td>\n<\/tr>\n
Op. Retract<\/td>\n4.83%<\/td>\n2.47%<\/td>\n81,657<\/td>\n2.83<\/td>\n15<\/td>\n+0.1564%<\/td>\n1,043.0<\/td>\n<\/tr>\n
Split-Share<\/td>\n5.25%<\/td>\n5.34%<\/td>\n99,278<\/td>\n4.32<\/td>\n15<\/td>\n+0.1062%<\/td>\n1,044.9<\/td>\n<\/tr>\n
Interest Bearing<\/td>\n6.28%<\/td>\n6.36%<\/td>\n60,126<\/td>\n3.43<\/td>\n4<\/td>\n+0.1783%<\/td>\n1,072.5<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.76%<\/td>\n4.58%<\/td>\n65,175<\/td>\n5.20<\/td>\n12<\/td>\n+0.2224%<\/td>\n1,024.8<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n5.42%<\/td>\n5.45%<\/td>\n339,838<\/td>\n14.10<\/td>\n54<\/td>\n-0.0776%<\/td>\n945.0<\/td>\n<\/tr>\n<\/table>\n<\/div>\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Major Price Changes<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nChange<\/td>\nNotes<\/td>\n<\/tr>\n
CM.PR.H<\/td>\nPerpetualDiscount<\/td>\n-2.2222%<\/td>\nNow with a pre-tax bid-YTW of 5.57% based on a bid of 21.56 and a limitMaturity<\/a>.<\/td>\n<\/tr>\n
CM.PR.I<\/td>\nPerpetualDiscount<\/td>\n-2.0833%<\/td>\nNow with a pre-tax bid-YTW of 5.58% based on a bid of 21.15 and a limitMaturity.<\/td>\n<\/tr>\n
CM.PR.J<\/td>\nPerpetualDiscount<\/td>\n-1.9408%<\/td>\nNow with a pre-tax bid-YTW of 5.59% based on a bid of 20.21 and a limitMaturity.<\/td>\n<\/tr>\n
HSB.PR.D<\/td>\nPerpetualDiscount<\/td>\n-1.7021%<\/td>\nNow with a pre-tax bid-YTW of 5.45% based on a bid of 23.10 and a limitMaturity.<\/td>\n<\/tr>\n
HSB.PR.C<\/td>\nPerpetualDiscount<\/td>\n-1.4675%<\/td>\nNow with a pre-tax bid-YTW of 5.47% based on a bid of 23.50 and a limitMaturity.<\/td>\n<\/tr>\n
ELF.PR.G<\/td>\nPerpetualDiscount<\/td>\n+1.0335%<\/td>\nNow with a pre-tax bid-YTW of 5.95% based on a bid of 20.11 and a limitMaturity.<\/td>\n<\/tr>\n
FTU.PR.A<\/td>\nSplitShare<\/td>\n+1.0571%<\/td>\nAsset coverage of 1.7+:1 as of December 31, according to the company<\/a>. Now with a pre-tax bid-YTW of 6.40% based on a bid of 9.56 and a hardMaturity<\/a> 2012-12-1 at 10.00.<\/td>\n<\/tr>\n
BAM.PR.G<\/td>\nFixFloat<\/td>\n+1.0606%<\/td>\n\u00a0<\/td>\n<\/tr>\n
IAG.PR.A<\/td>\nPerpetualDiscount<\/td>\n+1.0658%<\/td>\nNow with a pre-tax bid-YTW of 5.32% based on a bid of 21.81 and a limitMaturity.<\/td>\n<\/tr>\n
TD.PR.M<\/td>\nOpRet<\/td>\n+1.1073%<\/td>\nNow with a pre-tax bid-YTW of 3.01% based on a bid of 26.48 and a call 2009-5-30 at 26.00. The yield to the softMaturity<\/a> 2013-10-30 is a mere 3.54% … still less than 5% interest-equivalent.<\/td>\n<\/tr>\n
TCA.PR.X<\/td>\nPerpetualPremium<\/td>\n+1.1637%<\/td>\nNow with a pre-tax bid-YTW of 5.07% based on a bid of 51.29 and a call 2013-11-14 at 50.00.<\/td>\n<\/tr>\n
BAM.PR.B<\/td>\nFloater<\/td>\n+1.3699%<\/td>\n\u00a0<\/td>\n<\/tr>\n<\/table>\n<\/div>\n
\n\n\n\n\n\n\n\n\n
Volume Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nVolume<\/td>\nNotes<\/td>\n<\/tr>\n
CM.PR.A<\/td>\nOpRet<\/td>\n185,100<\/td>\nITG (who?) crossed 177,200 at 25.94. Now with a pre-tax bid-YTW of -4.12% based on a bid of 25.90 and a call 2008-2-14 at 25.75. I guess there are some bets out there that it won’t be called!<\/td>\n<\/tr>\n
RY.PR.B<\/td>\nPerpetualDiscount<\/td>\n107,050<\/td>\nNow with a pre-tax bid-YTW of 5.27% based on a bid of 22.61 and a limitMaturity.<\/td>\n<\/tr>\n
BMO.PR.I<\/td>\nOpRet<\/td>\n85,250<\/td>\nITG crossed 77,500 at 25.35. Now with a pre-tax bid-YTW of 0.97% based on a bid of 25.24 and a call 2008-2-14 at 25.00.<\/td>\n<\/tr>\n
TD.PR.M<\/td>\nOpRet<\/td>\n56,940<\/td>\nITG crossed 52,200 at 26.78. Now with a pre-tax bid-YTW of 3.01% based on a bid of 26.41 and a call 2009-5-30 at 26.00.<\/td>\n<\/tr>\n
GWO.PR.I<\/td>\nPerpetualDiscount<\/td>\n33,565<\/td>\nScotia bought 21,700 from Nesbitt at 21.45. Now with a pre-tax bid-YTW of 5.29% based on a bid of 21.47 and a limitMaturity.<\/td>\n<\/tr>\n<\/table>\n<\/div>\n

There were eighteen other index-included $25.00-equivalent issues trading over 10,000 shares today.<\/p>\n","protected":false},"excerpt":{"rendered":"

Well, stores didn’t sell anything in December\u00a0(which attracted a lot of comment, so investors thought they’d fill the need. And the equity infusions just kept coming: Citigroup, the biggest U.S. bank, is getting $14.5 billion …<\/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-1686","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/1686","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=1686"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/1686\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1686"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1686"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1686"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}