{"id":19733,"date":"2012-09-14T02:19:44","date_gmt":"2012-09-14T06:19:44","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=19733"},"modified":"2012-09-14T02:19:44","modified_gmt":"2012-09-14T06:19:44","slug":"september-13-2012","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=19733","title":{"rendered":"September 13, 2012"},"content":{"rendered":"

The Fed will continue its monetization policy<\/a>:<\/p>\n

To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee agreed today to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. The Committee also will continue through the end of the year its program to extend the average maturity of its holdings of securities as announced in June, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. These actions, which together will increase the Committee\u2019s holdings of longer-term securities by about $85 billion each month through the end of the year, should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.
…<\/b>
To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens. In particular, the Committee also decided today to keep the target range for the federal funds rate at 0 to 1\/4 percent and currently anticipates that exceptionally low levels for the federal funds rate are likely to be warranted at least through mid-2015.<\/p><\/blockquote>\n

There is also language about employment levels:<\/p>\n

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee is concerned that, without further policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that inflation over the medium term likely would run at or below its 2 percent objective.<\/p><\/blockquote>\n

Some people take this as an abandonment of the inflation mandate<\/a>:<\/p>\n

Gold jumped to a six-month high near $1,770 (U.S.) an ounce on Thursday, rising 2 per cent after the U.S. Federal Reserve launched an aggressive stimulus program and vowed it will keep buying assets until the outlook for jobs improves substantially.<\/p>\n

The metal received a huge boost after the U.S. central bank tied its unconventional bond-buying directly to economic conditions, marking a significant shift in the direction of U.S. monetary policy.<\/p>\n

Market watchers said the Fed was essentially shifting its focus to maximum employment at the expense of maintaining stable prices. The two objectives are often called the Fed\u2019s dual mandate.<\/p>\n

\u201cThey are emphasizing the growth mandate, and that means they don\u2019t care about inflation other than giving lip service to it,\u201d said Axel Merk, chief investment officer at Merk Funds, which has around $600 million in currency mutual-fund assets.<\/p>\n

\u201cThe price of gold will do very well in the years to come,\u201d Merk said.<\/p><\/blockquote>\n

Mr. Merk writes quite a bit about gold<\/a>.<\/p>\n

The equity guys were pleased<\/a>:<\/p>\n

U.S. stocks rose, sending the Standard & Poor\u2019s 500 Index to its highest level since 2007, as the Federal Reserve said it will buy mortgage-backed securities to bolster the economy.<\/p>\n

The S&P 500 rallied 1.6 percent to 1,459.99 at 4 p.m. in New York.<\/p>\n

\u201cIt was a very powerful statement,\u201d Kevin Caron, a market strategist at Stifel Nicolaus & Co. in Florham Park, New Jersey, said in a telephone interview. The firm oversees about $127 billion. \u201cThe Fed is going all in here, especially with their commitment to continue asset purchases until they see the desired result in the form of a lower unemployment rate. This statement removes a lot of uncertainty about the Fed\u2019s commitment to maintaining price stability.\u201d <\/p><\/blockquote>\n

The thugs at Telus have managed to stamp out an unfortunate bit of shareholder activism<\/a>:<\/p>\n

The debate over so-called empty voting has more fuel after a much-anticipated decision from a judge in the case of Telus Corp. and its fight against hedge fund Mason Capital, but there is still a lingering lack of clarity on just what is allowed.<\/p>\n

Mason put on a trading position that would enable it to benefit from the failure of a Telus proposal to collapse the company\u2019s dual class share structure on a one-for-one basis. Mason did it by buying shares of one class and selling short shares of the other class. The hedge fund’s hope is to force a conversion ratio that favours the shares that it bought, and it sought to call a shareholders meeting that would enshrine such a ratio in the articles of Telus.
…<\/b>
So how did Telus win? In large part because Mason\u2019s shareholder requisition for a meeting did not properly identify the hedge fund as the real owner of the shares.<\/p><\/blockquote>\n

As far as I know, there’s no doubt in anybody’s mind that Mason owns a big chunk of Telus voting shares and wants to force a vote. But they didn’t fill out the forms properly. Gotcha! The particulars of the decision<\/a> are that CDS, the registered shareholder, did not properly identify the beneficial owner.<\/p>\n

[64] Assuming but not deciding that CDS can issue a requisition on behalf of aparticipant or beneficial shareholder, in my opinion the Requisition must identify thebeneficial shareholders behind the requisition so the directors can meet their dutiesunder ss. 167(2), (3) and (7). The subject Requisition fails to do so.<\/p>\n

[65] In the circumstances, in my opinion, the directors were not obliged to send anotice of meeting as the Requisition does not comply with ss. 167(2) and (3).<\/p><\/blockquote>\n

Very little overall movement in the Canadian preferred share market today (although I retain a faint hope that the Fed will start buying Canadian preferred shares. Well, I did say it was a faint hope!), with PerpetualPremiums and DeemedRetractibles flat while FixedResets gained 1bp. Volatility was no great shakes. Volume was surprisingly low, considering that the new issues of ENB.PR.P<\/a> and BPO.PR.T<\/a> (today) and BAM.PF.B<\/a> (yesterday) should be causing some portfolio shuffling. Maybe the Fed bought all the new 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>\n-0.1737 %<\/td>\n2,407.2<\/td>\n<\/tr>\n
FixedFloater<\/td>\n4.57 %<\/td>\n3.93 %<\/td>\n36,918<\/td>\n17.44<\/td>\n1<\/td>\n-1.0466 %<\/td>\n3,485.6<\/td>\n<\/tr>\n
Floater<\/td>\n3.05 %<\/td>\n3.05 %<\/td>\n57,073<\/td>\n19.60<\/td>\n3<\/td>\n-0.1737 %<\/td>\n2,599.1<\/td>\n<\/tr>\n
OpRet<\/td>\n4.67 %<\/td>\n3.41 %<\/td>\n62,633<\/td>\n1.48<\/td>\n4<\/td>\n0.1542 %<\/td>\n2,545.2<\/td>\n<\/tr>\n
SplitShare<\/td>\n5.47 %<\/td>\n4.84 %<\/td>\n74,146<\/td>\n4.60<\/td>\n3<\/td>\n0.2265 %<\/td>\n2,807.0<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n0.1542 %<\/td>\n2,327.4<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.29 %<\/td>\n3.33 %<\/td>\n88,276<\/td>\n0.44<\/td>\n28<\/td>\n0.0021 %<\/td>\n2,278.7<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n4.96 %<\/td>\n4.97 %<\/td>\n96,974<\/td>\n15.59<\/td>\n3<\/td>\n-0.2777 %<\/td>\n2,542.0<\/td>\n<\/tr>\n
FixedReset<\/td>\n4.97 %<\/td>\n3.06 %<\/td>\n179,432<\/td>\n4.28<\/td>\n72<\/td>\n0.0076 %<\/td>\n2,423.1<\/td>\n<\/tr>\n
Deemed-Retractible<\/td>\n4.95 %<\/td>\n3.55 %<\/td>\n119,806<\/td>\n1.85<\/td>\n46<\/td>\n-0.0017 %<\/td>\n2,365.3<\/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
BAM.PR.G<\/td>\nFixedFloater<\/td>\n-1.05 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2042-09-13
\nMaturity Price : 21.65
\nEvaluated at bid price : 20.80
\nBid-YTW : 3.93 %<\/td>\n<\/tr>\n
FTS.PR.E<\/td>\nOpRet<\/td>\n1.14 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2013-06-01
\nMaturity Price : 25.75
\nEvaluated at bid price : 26.66
\nBid-YTW : 0.06 %<\/td>\n<\/tr>\n
BAM.PR.X<\/td>\nFixedReset<\/td>\n1.24 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2042-09-13
\nMaturity Price : 23.24
\nEvaluated at bid price : 25.21
\nBid-YTW : 3.30 %<\/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
ENB.PR.P<\/td>\nFixedReset<\/td>\n567,120<\/td>\nNew issue settled today<\/a>.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2042-09-13
\nMaturity Price : 23.05
\nEvaluated at bid price : 24.88
\nBid-YTW : 3.81 %<\/td>\n<\/tr>\n
BAM.PF.B<\/td>\nFixedReset<\/td>\n123,070<\/td>\nRecent new issue<\/a>.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2042-09-13
\nMaturity Price : 23.09
\nEvaluated at bid price : 24.99
\nBid-YTW : 3.94 %<\/td>\n<\/tr>\n
TD.PR.K<\/td>\nFixedReset<\/td>\n77,555<\/td>\nNational crossed blocks of 25,000 at 26.88 and 43,500 at 26.86.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-07-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.85
\nBid-YTW : 2.62 %<\/td>\n<\/tr>\n
RY.PR.W<\/td>\nPerpetual-Premium<\/td>\n66,273<\/td>\nNational crossed 10,000 at 25.70 and 50,000 at 25.66.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2013-02-24
\nMaturity Price : 25.25
\nEvaluated at bid price : 25.61
\nBid-YTW : 2.23 %<\/td>\n<\/tr>\n
ENB.PR.N<\/td>\nFixedReset<\/td>\n60,876<\/td>\nTD crossed 30,000 at 25.17.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2042-09-13
\nMaturity Price : 23.16
\nEvaluated at bid price : 25.17
\nBid-YTW : 3.89 %<\/td>\n<\/tr>\n
BMO.PR.P<\/td>\nFixedReset<\/td>\n46,646<\/td>\nRBC crossed 38,800 at 26.50.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2015-02-25
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.54
\nBid-YTW : 2.91 %<\/td>\n<\/tr>\n
There were 18 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
W.PR.J<\/td>\nPerpetual-Premium<\/td>\nQuote: 25.70 – 26.67
\nSpot Rate : 0.9700
\nAverage : 0.5756<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2012-10-13
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.70
\nBid-YTW : -16.24 %<\/td>\n<\/tr>\n

IAG.PR.F<\/td>\nDeemed-Retractible<\/td>\nQuote: 26.05 – 26.59
\nSpot Rate : 0.5400
\nAverage : 0.4228<\/p>\n

YTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.05
\nBid-YTW : 5.33 %<\/td>\n<\/tr>\n

HSB.PR.E<\/td>\nFixedReset<\/td>\nQuote: 26.56 – 26.93
\nSpot Rate : 0.3700
\nAverage : 0.2563<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-06-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.56
\nBid-YTW : 2.87 %<\/td>\n<\/tr>\n

TCA.PR.X<\/td>\nPerpetual-Premium<\/td>\nQuote: 51.16 – 51.49
\nSpot Rate : 0.3300
\nAverage : 0.2237<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2013-10-15
\nMaturity Price : 50.00
\nEvaluated at bid price : 51.16
\nBid-YTW : 4.05 %<\/td>\n<\/tr>\n

BAM.PF.A<\/td>\nFixedReset<\/td>\nQuote: 25.30 – 25.59
\nSpot Rate : 0.2900
\nAverage : 0.1853<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2042-09-13
\nMaturity Price : 23.20
\nEvaluated at bid price : 25.30
\nBid-YTW : 4.15 %<\/td>\n<\/tr>\n

HSE.PR.A<\/td>\nFixedReset<\/td>\nQuote: 25.90 – 26.15
\nSpot Rate : 0.2500
\nAverage : 0.1458<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2042-09-13
\nMaturity Price : 23.58
\nEvaluated at bid price : 25.90
\nBid-YTW : 3.03 %<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

The Fed will continue its monetization policy: To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee agreed today …<\/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-19733","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/19733","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=19733"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/19733\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=19733"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=19733"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=19733"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}