{"id":20460,"date":"2012-12-05T00:11:43","date_gmt":"2012-12-05T04:11:43","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=20460"},"modified":"2012-12-05T00:11:43","modified_gmt":"2012-12-05T04:11:43","slug":"december-4-2012","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=20460","title":{"rendered":"December 4, 2012"},"content":{"rendered":"

Global banks are moving more into asset management but there are problems<\/a>:<\/p>\n

Global banks, forced by regulators to reduce their dependence on profits from high-risk trading, have rediscovered the appeal of the mundane business of managing money for clients.<\/p>\n

Deutsche Bank AG (DBK) is now counting on the fund unit it failed to sell to help boost return on equity, a measure of profitability. UBS AG (UBSN) is paring investment banking as it focuses on overseeing assets for wealthy clients. Goldman Sachs Group Inc. (GS), JPMorgan Chase & Co. (JPM) and Wells Fargo & Co. (WFC), three of the five biggest U.S. banks, are considering expanding asset- management divisions as they seek to grab market share from fund companies such as Fidelity Investments.
…<\/b>
Banks will need to overcome the perception that they sometimes push their own funds and improve their middle-of-the- pack performance as money managers if they want to attract assets from investors. Goldman Sachs\u2019s stock and bond mutual funds have trailed about 61 percent of their respective peers on average over the five years ended Sept. 30, and about 52 percent over the past three years, according to data from Morningstar Inc. in Chicago. JPMorgan\u2019s mutual funds have been beaten by 42 percent of rivals over the past five years, while Wells Fargo\u2019s have lagged behind 44 percent, the Morningstar data show.
…<\/b>
As recently as 2000, brokers, banks and insurers dominated the rankings of global asset-management firms, accounting for six of the top 10 spots based on assets, according to data from trade publication Pensions & Investments. Today, they hold four of those positions as the balance shifted to BlackRock Inc. (BLK), Vanguard Group Inc. and Fidelity. The four banks and insurance companies on the list collectively have about $5.5 trillion in assets compared with more than $11 trillion for the rest.<\/p>\n

The decline reflects a combination of poor performance, the rise of mutual-fund sales through fee-only independent advisers rather than bank-owned brokerages and the impact of a mutual- fund trading scandal uncovered by then-New York Attorney General Eliot Spitzer in 2003. The inquiries into improper trading led to increased regulation, raised operating costs and resulted in more than $4 billion in penalties to firms including Bank of America Corp. (BAC), Merrill Lynch & Co. and Citigroup Inc. (C).<\/p><\/blockquote>\n

The Boston Fed has published a discussion paper titled A Psychological Perspective of Financial Panic<\/a>:<\/p>\n

In spite of large number of financial crises, often depicted as episodes of financial panic, the notion of panic in financial markets is not very well understood. Many have argued that in order to understand financial crises, and in particular panic events, we need to go beyond classic economic arguments. This paper is an effort in that direction, in which we attempt to give a psychological account of panic and of panic in financial markets in particular, by discussing uncertainty, the desire for predictability and control, the illusion of control, and confidence. We suggest how one might incorporate these psychological insights into existing economic models.<\/p><\/blockquote>\n

There’s been a development in the Rochdale Securities scandal<\/a>:<\/p>\n

The FBI on Tuesday arrested David Miller, a former Rochdale Securities trader whose outsized, unauthorized purchases of Apple stock in October nearly sank his firm.<\/p>\n

U.S. prosecutors in Connecticut charged Miller with wire fraud, alleging he lied about his trading of Apple shares ahead of the tech giant’s Oct. 25 earnings announcement.<\/p>\n

According to a criminal complaint filed in federal court on Monday, Miller bought Apple shares for himself and then reported to Rochdale the trade was for a customer who would bear the risk if it lost money.<\/p>\n

Miller would have been able to walk away with a profit for himself had Apple’s share price risen, but it fell. As a result, Rochdale was left unexpectedly owning more than a million and a half shares of Apple and had to sell them for a $5 million loss.<\/p>\n

According to the complaint, Miller also pretended to be a representative of a client’s firm and told another broker-dealer to sell Apple shares, supposedly on behalf of the firm.<\/p><\/blockquote>\n

The Canadian preferred share market had a day of modest gains today, with both PerpetualPremiums and DeemedRetractibles gaining 5bp while FixedResets were up 6bp. Volatility was average. Volume was on the high side of average.<\/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>\n0.0532 %<\/td>\n2,474.0<\/td>\n<\/tr>\n
FixedFloater<\/td>\n4.16 %<\/td>\n3.50 %<\/td>\n27,116<\/td>\n18.27<\/td>\n1<\/td>\n0.1314 %<\/td>\n3,872.0<\/td>\n<\/tr>\n
Floater<\/td>\n2.79 %<\/td>\n3.01 %<\/td>\n57,552<\/td>\n19.64<\/td>\n4<\/td>\n0.0532 %<\/td>\n2,671.3<\/td>\n<\/tr>\n
OpRet<\/td>\n4.59 %<\/td>\n1.73 %<\/td>\n37,162<\/td>\n0.56<\/td>\n4<\/td>\n0.0000 %<\/td>\n2,600.0<\/td>\n<\/tr>\n
SplitShare<\/td>\n4.68 %<\/td>\n4.83 %<\/td>\n68,257<\/td>\n4.43<\/td>\n2<\/td>\n0.1018 %<\/td>\n2,846.9<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n0.0000 %<\/td>\n2,377.4<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.25 %<\/td>\n1.51 %<\/td>\n72,173<\/td>\n0.16<\/td>\n30<\/td>\n0.0542 %<\/td>\n2,321.2<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n4.85 %<\/td>\n4.89 %<\/td>\n95,081<\/td>\n15.58<\/td>\n4<\/td>\n0.0000 %<\/td>\n2,619.6<\/td>\n<\/tr>\n
FixedReset<\/td>\n4.95 %<\/td>\n2.97 %<\/td>\n221,301<\/td>\n4.36<\/td>\n76<\/td>\n0.0570 %<\/td>\n2,448.9<\/td>\n<\/tr>\n
Deemed-Retractible<\/td>\n4.91 %<\/td>\n3.47 %<\/td>\n121,536<\/td>\n0.95<\/td>\n46<\/td>\n0.0500 %<\/td>\n2,408.1<\/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
MFC.PR.G<\/td>\nFixedReset<\/td>\n-1.36 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2016-12-19
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.40
\nBid-YTW : 3.94 %<\/td>\n<\/tr>\n
POW.PR.G<\/td>\nPerpetual-Premium<\/td>\n-1.07 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2019-04-15
\nMaturity Price : 25.50
\nEvaluated at bid price : 26.87
\nBid-YTW : 4.67 %<\/td>\n<\/tr>\n
ELF.PR.H<\/td>\nPerpetual-Premium<\/td>\n1.01 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2021-04-17
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.94
\nBid-YTW : 5.08 %<\/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
MFC.PR.J<\/td>\nFixedReset<\/td>\n375,718<\/td>\nNew issue settled today<\/a>.
\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.01
\nBid-YTW : 3.96 %<\/td>\n<\/tr>\n
TRP.PR.A<\/td>\nFixedReset<\/td>\n76,819<\/td>\nNesbitt crossed 40,000 at 25.34; RBC crossed 21,000 at the same price.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2042-12-04
\nMaturity Price : 23.69
\nEvaluated at bid price : 25.34
\nBid-YTW : 3.13 %<\/td>\n<\/tr>\n
ENB.PR.B<\/td>\nFixedReset<\/td>\n57,662<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2042-12-04
\nMaturity Price : 23.28
\nEvaluated at bid price : 25.25
\nBid-YTW : 3.57 %<\/td>\n<\/tr>\n
BNS.PR.Z<\/td>\nFixedReset<\/td>\n56,194<\/td>\nNesbitt crossed 30,000 at 24.75.
\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.76
\nBid-YTW : 3.19 %<\/td>\n<\/tr>\n
BMO.PR.P<\/td>\nFixedReset<\/td>\n38,611<\/td>\nScotia crossed 18,700 at 26.70.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2015-02-25
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.72
\nBid-YTW : 2.29 %<\/td>\n<\/tr>\n
BNS.PR.R<\/td>\nFixedReset<\/td>\n33,302<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.91
\nBid-YTW : 3.51 %<\/td>\n<\/tr>\n
There were 36 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
MFC.PR.G<\/td>\nFixedReset<\/td>\nQuote: 25.40 – 25.86
\nSpot Rate : 0.4600
\nAverage : 0.2912<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2016-12-19
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.40
\nBid-YTW : 3.94 %<\/td>\n<\/tr>\n

PWF.PR.I<\/td>\nPerpetual-Premium<\/td>\nQuote: 25.54 – 25.85
\nSpot Rate : 0.3100
\nAverage : 0.2038<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2013-01-03
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.54
\nBid-YTW : -12.85 %<\/td>\n<\/tr>\n

GWO.PR.F<\/td>\nDeemed-Retractible<\/td>\nQuote: 25.51 – 25.73
\nSpot Rate : 0.2200
\nAverage : 0.1432<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2013-01-03
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.51
\nBid-YTW : -22.61 %<\/td>\n<\/tr>\n

SLF.PR.A<\/td>\nDeemed-Retractible<\/td>\nQuote: 24.54 – 24.75
\nSpot Rate : 0.2100
\nAverage : 0.1360<\/p>\n

YTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.54
\nBid-YTW : 4.98 %<\/td>\n<\/tr>\n

POW.PR.G<\/td>\nPerpetual-Premium<\/td>\nQuote: 26.87 – 27.16
\nSpot Rate : 0.2900
\nAverage : 0.2178<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2019-04-15
\nMaturity Price : 25.50
\nEvaluated at bid price : 26.87
\nBid-YTW : 4.67 %<\/td>\n<\/tr>\n

NA.PR.O<\/td>\nFixedReset<\/td>\nQuote: 26.28 – 26.56
\nSpot Rate : 0.2800
\nAverage : 0.2202<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-02-15
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.28
\nBid-YTW : 2.55 %<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

Global banks are moving more into asset management but there are problems: Global banks, forced by regulators to reduce their dependence on profits from high-risk trading, have rediscovered the appeal of the mundane business of …<\/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-20460","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/20460","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=20460"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/20460\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=20460"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=20460"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=20460"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}