{"id":20667,"date":"2012-12-21T23:49:20","date_gmt":"2012-12-22T03:49:20","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=20667"},"modified":"2012-12-21T23:49:20","modified_gmt":"2012-12-22T03:49:20","slug":"december-21-2012","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=20667","title":{"rendered":"December 21, 2012"},"content":{"rendered":"

Spend-Every-Penny is continuing his heroic efforts to pump up a Canadian housing bubble<\/a>:<\/p>\n

Ottawa has increased by $50-billion the amount of residential mortgages that it is willing to guarantee.<\/p>\n

But this time the Canada Mortgage and Housing Corp., the biggest provider of mortgage default insurance, is not getting any. Instead, the additional backing is going only to private-sector players such as Genworth Canada, who will see their maximum raised to $300-billion from $250-billion.<\/p>\n

Genworth Canada disclosed the news<\/a> on Thursday, which helped drive its shares up more than 3% to $22.73.<\/p>\n

The mortgate insurance market in this country is dominated by a handful of players including the CMHC, Genworth Canada and Canada Guarantee, with CMHC accounting for the lion\u2019s share. In the interests of fair competition, all are given access to government guarantees.<\/p><\/blockquote>\n

Yes, here in Canada, lenders can freely compete to see who can suck arse in Ottawa enough to get mortgage guarantees. Auctioning off the guarantees would be uncivilized; especially since there are those who have a rather peculiar take on the necessity of government guarantees<\/a>:<\/p>\n

In the financial institutions legislation we have a requirement that all mortgages over 80% have mortgage insurance, so on the one hand, we have a requirement that a mortgage lender must receive mortgage insurance from either CMHC or a private mortgage insurer in order to take on the mortgage of a Canadian who wishes to purchase a house with a down payment of less than 20%. With that mandatory requirement in legislation, the government would be under an obligation to ensure that mortgage insurance is available.<\/p><\/blockquote>\n

The Toronto Exchange will be close the regular session at 1pm on December 24<\/a>. That will allow us members of the highest paid profession on earth to go shopping and complain about how lazy the clerks are.<\/p>\n

CMHC has released the Canadian Registered Covered Bond Programs Guide<\/a>. DBRS notes<\/a>:<\/p>\n

Upon an initial review of the Guide, DBRS expects that the current Canadian covered bond issuers will either amend their existing respective programs or create new programs to comply with the Guide. Given the substantial requirements prescribed in the Guide, DBRS does not expect any new Canadian covered bond issuances over the next few months while the issuers are implementing the changes to existing programs or establishing new programs. DBRS will not assign any final ratings to any proposed new issuances until DBRS has received confirmation that the relevant issuer, the program and series have been registered in accordance with the Guide.<\/p><\/blockquote>\n

On November 26<\/a> I referred to Ontario lawyers’ claims that there were too many lawyers; I was interested to see some American numbers on the topic<\/a> in a rather whiny Bloomberg article:<\/p>\n

The same housing crash that hammered young architects and loan officers also slammed lawyers. Law schools are turning out about 45,000 degree holders a year for about 25,000 full-time positions available to them, according to the National Association for Law Placement Inc. in Washington. The class of 2011 had the lowest placement with law firms, 49.5 percent, in 36 years.<\/p><\/blockquote>\n

Whiny? Yes, whiny:<\/p>\n

Only one-fifth of those who graduated college since 2006 expect greater success than their parents, a Rutgers survey found earlier this year.<\/p><\/blockquote>\n

Uh … yeah. You’re only six years out of school, chumps, and a rather significant recession got in the way. Call me back in twenty years and then we can discuss your success relative to your parents.<\/p>\n

The Canadian preferred share market was hot today, with PerpetualPremiums up 6bp, FixedResets winning 22bp and DeemedRetractibles gaining 18bp. Volatility was good, all positive and heavily skewed towards FixedResets. Volume was 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>\n0.2271 %<\/td>\n2,485.8<\/td>\n<\/tr>\n
FixedFloater<\/td>\n4.31 %<\/td>\n3.66 %<\/td>\n32,768<\/td>\n17.94<\/td>\n1<\/td>\n-0.0906 %<\/td>\n3,734.8<\/td>\n<\/tr>\n
Floater<\/td>\n2.80 %<\/td>\n2.98 %<\/td>\n59,113<\/td>\n19.77<\/td>\n4<\/td>\n0.2271 %<\/td>\n2,684.0<\/td>\n<\/tr>\n
OpRet<\/td>\n4.63 %<\/td>\n2.21 %<\/td>\n33,145<\/td>\n0.49<\/td>\n4<\/td>\n0.0191 %<\/td>\n2,594.5<\/td>\n<\/tr>\n
SplitShare<\/td>\n4.64 %<\/td>\n4.74 %<\/td>\n57,575<\/td>\n4.39<\/td>\n2<\/td>\n0.0000 %<\/td>\n2,872.4<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n0.0191 %<\/td>\n2,372.5<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.25 %<\/td>\n1.62 %<\/td>\n70,802<\/td>\n0.18<\/td>\n30<\/td>\n0.0575 %<\/td>\n2,327.1<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n4.85 %<\/td>\n4.87 %<\/td>\n134,669<\/td>\n15.60<\/td>\n4<\/td>\n0.1932 %<\/td>\n2,639.7<\/td>\n<\/tr>\n
FixedReset<\/td>\n4.92 %<\/td>\n2.96 %<\/td>\n228,445<\/td>\n4.31<\/td>\n77<\/td>\n0.2214 %<\/td>\n2,459.4<\/td>\n<\/tr>\n
Deemed-Retractible<\/td>\n4.88 %<\/td>\n0.51 %<\/td>\n116,255<\/td>\n0.39<\/td>\n46<\/td>\n0.1836 %<\/td>\n2,425.8<\/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
TD.PR.G<\/td>\nFixedReset<\/td>\n1.02 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-04-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.79
\nBid-YTW : 1.54 %<\/td>\n<\/tr>\n
ENB.PR.F<\/td>\nFixedReset<\/td>\n1.02 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2018-06-01
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.66
\nBid-YTW : 3.53 %<\/td>\n<\/tr>\n
MFC.PR.G<\/td>\nFixedReset<\/td>\n1.04 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2016-12-19
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.31
\nBid-YTW : 3.02 %<\/td>\n<\/tr>\n
MFC.PR.C<\/td>\nDeemed-Retractible<\/td>\n1.08 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.44
\nBid-YTW : 4.84 %<\/td>\n<\/tr>\n
BNS.PR.Z<\/td>\nFixedReset<\/td>\n1.44 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.73
\nBid-YTW : 3.27 %<\/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
HSB.PR.E<\/td>\nFixedReset<\/td>\n82,636<\/td>\nCIBC crossed 12,000 at 26.55; Desjardins crossed 50,000 at the same price.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-06-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.53
\nBid-YTW : 2.39 %<\/td>\n<\/tr>\n
BMO.PR.Q<\/td>\nFixedReset<\/td>\n55,868<\/td>\nScotia crossed 48,800 at 24.65.
\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.78
\nBid-YTW : 3.25 %<\/td>\n<\/tr>\n
BNS.PR.Q<\/td>\nFixedReset<\/td>\n37,545<\/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 : 3.38 %<\/td>\n<\/tr>\n
BMO.PR.N<\/td>\nFixedReset<\/td>\n36,564<\/td>\nTD crossed 25,000 at 26.33.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-02-25
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.32
\nBid-YTW : 2.36 %<\/td>\n<\/tr>\n
RY.PR.T<\/td>\nFixedReset<\/td>\n36,065<\/td>\nScotia crossed 30,000 at 26.75.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-08-24
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.75
\nBid-YTW : 2.28 %<\/td>\n<\/tr>\n
BNS.PR.O<\/td>\nDeemed-Retractible<\/td>\n33,450<\/td>\nTD crossed 25,000 at 26.67.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2013-04-26
\nMaturity Price : 26.00
\nEvaluated at bid price : 26.64
\nBid-YTW : 0.35 %<\/td>\n<\/tr>\n
There were 33 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
IAG.PR.E<\/td>\nDeemed-Retractible<\/td>\nQuote: 26.69 – 27.00
\nSpot Rate : 0.3100
\nAverage : 0.1929<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-12-31
\nMaturity Price : 26.00
\nEvaluated at bid price : 26.69
\nBid-YTW : 4.34 %<\/td>\n<\/tr>\n

RY.PR.W<\/td>\nPerpetual-Premium<\/td>\nQuote: 25.66 – 25.94
\nSpot Rate : 0.2800
\nAverage : 0.1708<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2013-02-24
\nMaturity Price : 25.25
\nEvaluated at bid price : 25.66
\nBid-YTW : -2.21 %<\/td>\n<\/tr>\n

TCA.PR.X<\/td>\nPerpetual-Premium<\/td>\nQuote: 52.00 – 52.42
\nSpot Rate : 0.4200
\nAverage : 0.3409<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2013-10-15
\nMaturity Price : 50.00
\nEvaluated at bid price : 52.00
\nBid-YTW : 1.62 %<\/td>\n<\/tr>\n

BMO.PR.K<\/td>\nDeemed-Retractible<\/td>\nQuote: 26.20 – 26.39
\nSpot Rate : 0.1900
\nAverage : 0.1155<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2013-01-20
\nMaturity Price : 26.00
\nEvaluated at bid price : 26.20
\nBid-YTW : 0.06 %<\/td>\n<\/tr>\n

RY.PR.F<\/td>\nDeemed-Retractible<\/td>\nQuote: 26.00 – 26.33
\nSpot Rate : 0.3300
\nAverage : 0.2589<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2013-05-24
\nMaturity Price : 25.75
\nEvaluated at bid price : 26.00
\nBid-YTW : 2.75 %<\/td>\n<\/tr>\n

HSB.PR.D<\/td>\nDeemed-Retractible<\/td>\nQuote: 25.83 – 26.07
\nSpot Rate : 0.2400
\nAverage : 0.1710<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2013-01-30
\nMaturity Price : 25.50
\nEvaluated at bid price : 25.83
\nBid-YTW : -7.91 %<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

Spend-Every-Penny is continuing his heroic efforts to pump up a Canadian housing bubble: Ottawa has increased by $50-billion the amount of residential mortgages that it is willing to guarantee. But this time the Canada Mortgage …<\/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-20667","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/20667","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=20667"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/20667\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=20667"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=20667"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=20667"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}