{"id":1901,"date":"2008-03-10T22:23:53","date_gmt":"2008-03-11T02:23:53","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=1901"},"modified":"2008-03-10T22:23:53","modified_gmt":"2008-03-11T02:23:53","slug":"march-10-2008","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=1901","title":{"rendered":"March 10, 2008"},"content":{"rendered":"

Bloomberg has a story headlined TIPS’ Yields Show Fed Has Lost Control of Inflation:<\/a>:<\/p>\n

“The way TIPS are trading now, investors believe headline inflation will stay lofty and are willing to give up the real yield for that,” said Brian Brennan, a money manager who helps oversee $11 billion in fixed-income assets at T. Rowe Price Group Inc. based in Baltimore. Prices for the securities indicate “a real concern of a recession and high headline inflation,” he said.<\/p><\/blockquote>\n

This is the type of boneheaded analysis that is rife now that the smiley-boy salesmen have taken over the industry completely. If the driver of these real yields is inflation, then why is the 30-year Treasury bond yielding less than 4.5%?<\/p>\n

As Accrued Interest<\/em> points out, Treasury yields are being driven by fear<\/a>, with investors piling into government guaranteed debt for the simple reason that they want to protect their capital. TIPS are simply maintaining a spread to nominals – an increasing spread, to be sure; inflation fears are part<\/em> of the picture as I have previously discussed<\/a>, but to ascribe the entire move to this is … boneheaded. Sorry folks, I just can’t think of any other word.<\/p>\n

PerpetualDiscounts got smacked again today, on extremely light volume – all eyes, yet again, were on the equity markets and wondering if the music would stop with EVERYBODY holding the hot potato. BCE issues did very well – it appears that there are some who took the unsuccessful bondholders’ lawsuit<\/a> a lot more seriously than I did.<\/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>\n5.50%<\/td>\n5.52%<\/td>\n32,606<\/td>\n14.64<\/td>\n2<\/td>\n+0.8109%<\/td>\n1,088.6<\/td>\n<\/tr>\n
Fixed-Floater<\/td>\n4.76%<\/td>\n5.57%<\/td>\n63,718<\/td>\n14.78<\/td>\n8<\/td>\n+1.1067%<\/td>\n1,043.2<\/td>\n<\/tr>\n
Floater<\/td>\n4.72%<\/td>\n4.79%<\/td>\n86,094<\/td>\n15.78<\/td>\n2<\/td>\n+0.6984%<\/td>\n868.2<\/td>\n<\/tr>\n
Op. Retract<\/td>\n4.84%<\/td>\n3.62%<\/td>\n73,774<\/td>\n2.74<\/td>\n15<\/td>\n-0.1461%<\/td>\n1,044.8<\/td>\n<\/tr>\n
Split-Share<\/td>\n5.34%<\/td>\n5.68%<\/td>\n97,706<\/td>\n4.04<\/td>\n14<\/td>\n-0.2302%<\/td>\n1,030.2<\/td>\n<\/tr>\n
Interest Bearing<\/td>\n6.21%<\/td>\n6.64%<\/td>\n67,951<\/td>\n4.22<\/td>\n3<\/td>\n-0.2713%<\/td>\n1,080.0<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.76%<\/td>\n5.63%<\/td>\n285,094<\/td>\n8.77<\/td>\n17<\/td>\n-0.0144%<\/td>\n1,022.8<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n5.46%<\/td>\n5.52%<\/td>\n263,316<\/td>\n14.62<\/td>\n51<\/td>\n-0.4534%<\/td>\n942.8<\/td>\n<\/tr>\n<\/table>\n<\/div>\n
\n\n\n\n\n\n\n\n\n\n\n\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
FBS.PR.B<\/td>\nSplitShare<\/td>\n-2.5641%<\/td>\nAsset coverage of just under 1.5:1 as of\u00a0March 6, according TD Securities<\/a>. Now with a pre-tax bid-YTW of 6.28% based on a bid of\u00a09.50 and a hardMaturity<\/a>\u00a02011-12-15 at 10.00.<\/td>\n<\/tr>\n
SLF.PR.D<\/td>\nPerpetualDiscount<\/td>\n-1.8310%<\/td>\nNow with a pre-tax bid-YTW of 5.33% based on a bid of\u00a020.91 and limitMaturity<\/a>.<\/td>\n<\/tr>\n
SLF.PR.A<\/td>\nPerpetualDiscount<\/td>\n-1.4286%<\/td>\nNow with a pre-tax bid-YTW of 5.39%\u00a0based on a bid of\u00a022.08 and a limitMaturity.<\/td>\n<\/tr>\n
BMO.PR.J<\/td>\nPerpetualDiscount<\/td>\n-1.4112%<\/td>\nNow with a pre-tax bid-YTW of 5.61% based on a bid of 20.26 and a limitMaturity.<\/td>\n<\/tr>\n
ELF.PR.F<\/td>\nPerpetualDiscount<\/td>\n-1.3453%<\/td>\nNow with a pre-tax bid-YTW of 6.13% based on a bid of 22.00 and a limitMaturity.\u00a0<\/td>\n<\/tr>\n
CM.PR.E<\/td>\nPerpetualDiscount<\/td>\n-1.3158%<\/td>\nNow with a pre-tax bid-YTW of 5.91% based on a bid of 24.00 and a limitMaturity.<\/td>\n<\/tr>\n
IAG.PR.A<\/td>\nPerpetualDiscount<\/td>\n-1.3133%<\/td>\nNow with a pre-tax bid-YTW of 5.48% based on a bid of\u00a021.04 and a limitMaturity.<\/td>\n<\/tr>\n
RY.PR.C<\/td>\nPerpetualDiscount<\/td>\n-1.2471%<\/td>\nNow with a pre-tax bid-YTW of 5.43% based on a bid of 21.38 and a limitMaturity.<\/td>\n<\/tr>\n
BNS.PR.N<\/td>\nPerpetualDiscount<\/td>\n-1.2245%<\/td>\nNow with a pre-tax bid-YTW of 5.49% based on a bid of 24.20 and a limitMaturity.<\/td>\n<\/tr>\n
WFS.PR.A<\/td>\nSplitShare<\/td>\n-1.2036%<\/td>\nAsset coverage of just under 1.8:1 as of February 29, according to Mulvihill<\/a>. Now with a pre-tax bid-YTW of 6.14% based on a bid of\u00a09.85 and a\u00a0hardMaturity 2011-6-30 at 10.00.<\/td>\n<\/tr>\n
RY.PR.G<\/td>\nPerpetualDiscount<\/td>\n-1.1699%<\/td>\nNow with a pre-tax bid-YTW of 5.38% based on a bid of 21.12 and a limitMaturity.<\/td>\n<\/tr>\n
CM.PR.H<\/td>\nPerpetualDiscount<\/td>\n-1.1628%<\/td>\nNow\u00a0with a pre-tax bid-YTW of 5.73% based on a bid of 21.25 and a limitMaturity.\u00a0<\/td>\n<\/tr>\n
RY.PR.E<\/td>\nPerpetualDiscount<\/td>\n-1.1531%<\/td>\nNow with a pre-tax bid-YTW of 5.30% based on a bid of 21.43 and a limitMaturity.<\/td>\n<\/tr>\n
MFC.PR.A<\/td>\nOpRet<\/td>\n-1.1453%<\/td>\nNow with a pre-tax bid-YTW of 4.09% based on a bid of\u00a025.03 and a\u00a0softMaturity<\/a> 2015-12-18 at 25.00.<\/td>\n<\/tr>\n
SLF.PR.C<\/td>\nPerpetualDiscount<\/td>\n-1.1268%<\/td>\nNow with a pre-tax bid-YTW of 5.30% based on a bid of 21.06 and\u00a0a limitMaturity.<\/td>\n<\/tr>\n
BNS.PR.L<\/td>\nPerpetualDiscount<\/td>\n-1.0295%<\/td>\nNow with a pre-tax bid-YTW of 5.40% based on a bid of 21.15 and a limitMaturity.<\/td>\n<\/tr>\n
NA.PR.L<\/td>\nPerpetualDiscount<\/td>\n-1.0078%<\/td>\nNow with a pre-tax bid-YTW of 5.66% based on a bid of 21.61 and a limitMaturity.<\/td>\n<\/tr>\n
BCE.PR.A<\/td>\nFixFloat<\/td>\n+1.0417%<\/td>\n\u00a0<\/td>\n<\/tr>\n
BCE.PR.C<\/td>\nFixFloat<\/td>\n+1.0417%<\/td>\n\u00a0<\/td>\n<\/tr>\n
FTU.PR.A<\/td>\nSplitShare<\/td>\n+1.2360%<\/td>\nAsset coverage of just under 1.5:1 as of February 29, according to the company<\/a>. Probably a little under 1.4:1 now, given poor performance this month of US Financials. Now with a pre-tax bid-YTW of 7.88% based on a bid of\u00a09.01 and a hardMaturity 2012-12-1 at 10.00.<\/td>\n<\/tr>\n
BCE.PR.B<\/td>\nFixFloat<\/td>\n+1.6518%<\/td>\n\u00a0<\/td>\n<\/tr>\n
BCE.PR.G<\/td>\nFixFloat<\/td>\n+1.9108%<\/td>\n\u00a0<\/td>\n<\/tr>\n
BCE.PR.Z<\/td>\nFixFloat<\/td>\n+2.0408%<\/td>\n\u00a0<\/td>\n<\/tr>\n
BCE.PR.I<\/td>\nFixFloat<\/td>\n+2.0842%<\/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
NA.PR.L<\/td>\nPerpetualDiscount<\/td>\n51,515<\/td>\nTD crossed 48,300 at 21.75. Now with a pre-tax bid-YTW of 5.66% based on a bid of 21.61 and a limitMaturity.<\/td>\n<\/tr>\n
BNS.PR.O<\/td>\nPerpetualPremium<\/td>\n21,239<\/td>\nNow with a pre-tax bid-YTW of 5.64% based on a bid of 25.11 and a limitMaturity.<\/td>\n<\/tr>\n
TD.PR.P<\/td>\nPerpetualDiscount<\/td>\n13,607<\/td>\nNow with a pre-tax bid-YTW of 5.46% based on a bid of 24.32 and a limitMaturity.<\/td>\n<\/tr>\n
PWF.PR.H<\/td>\nPerpetualPremium<\/td>\n11,500<\/td>\nNow with a pre-tax bid-YTW of 5.82% based on a bid of 25.00 and a limitMaturity.<\/td>\n<\/tr>\n
CM.PR.I<\/td>\nPerpetualDiscount<\/td>\n11,478<\/td>\nNow with a pre-tax bid-YTW 5.81% based on a bid of\u00a020.52 and a limitMaturity.<\/td>\n<\/tr>\n<\/table>\n<\/div>\n

There were three other index-included $25-pv-equivalent issues trading over 10,000 shares today.<\/p>\n","protected":false},"excerpt":{"rendered":"

Bloomberg has a story headlined TIPS’ Yields Show Fed Has Lost Control of Inflation:: “The way TIPS are trading now, investors believe headline inflation will stay lofty and are willing to give up the real …<\/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-1901","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/1901","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=1901"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/1901\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1901"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1901"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1901"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}