{"id":20744,"date":"2013-01-05T00:14:52","date_gmt":"2013-01-05T04:14:52","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=20744"},"modified":"2013-01-05T00:14:52","modified_gmt":"2013-01-05T04:14:52","slug":"january-4-2013","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=20744","title":{"rendered":"January 4, 2013"},"content":{"rendered":"

There was a decent, but by no means stellar, US jobs number<\/a>:<\/p>\n

Employers added workers in December at about the same pace as the prior month, and the unemployment rate matched a four-year low, showing sustained gains in the U.S. labor market even as lawmakers were struggling to reach a budget deal.<\/p>\n

Payrolls rose by 155,000 workers last month following a revised 161,000 advance in November that was more than initially estimated, Labor Department figures showed today in Washington. The median estimate of 82 economists surveyed by Bloomberg called for a increase of 152,000. The unemployment rate held at 7.8 percent after the November figure was revised up from a previously reported 7.7 percent.<\/p><\/blockquote>\n

The S&P 500 reached a milestone of sorts<\/a>:U.S. stocks rose, sending the Standard & Poor\u2019s 500 Index above the highest closing level since December 2007, after data showed employers added workers in December at about the same pace as the prior month.<\/p>\n

Mark Whitehouse of Bloomberg writes an interesting review of an IMF paper<\/a> by two IMF officials, chief economist Olivier Blanchard and economist Daniel Leigh, titled Growth Forecast Errors and Fiscal Multipliers<\/a>:<\/p>\n

This paper investigates the relation between growth forecast errors and planned fiscalconsolidation during the crisis. We find that, in advanced economies, stronger planned fiscal consolidation has been associated with lower growth than expected, with the relation being particularly strong, both statistically and economically, early in the crisis. A natural interpretation is that fiscal multipliers were substantially higher than implicitly assumed by forecasters. The weaker relation in more recent years may reflect in part learning by forecasters and in part smaller multipliers than in the early years of the crisis.
…<\/b>
First, because of the binding zero lower bound on nominal interest rates, central banks could not cut interest rates to offset the negative short-term effects of a fiscal consolidation on economic activity. Christiano, Eichenbaum, and Rebelo (2011) have shown, using a dynamic stochastic general equilibrium (DSGE) model, that under such conditions, fiscal multipliers can exceed 3. Since episodes characterized by a binding zero lower bound (also referred to as \u201cliquidity trap\u201d episodes) have been rare, only a few empirical studies investigate fiscal multipliers under such conditions. Based on data for 27 economies during the 1930s\u2014a period during which interest rates were at or near the zero lower bound\u2014Almunia and others (2010) have concluded that fiscal multipliers were about 1.6.<\/p>\n

Second, lower output and lower income, together with a poorly functioning financial system, imply that consumption may have depended more on current than on future income, and that investment may have depended more on current than on future profits, with both effects leading to larger multipliers (Eggertsson and Krugman, 2012).<\/p>\n

Third, and consistent with some of the above mechanisms, a number of empirical studies have found that fiscal multipliers are likely to be larger when there is a great deal of slack in the economy. Based on U.S. data, Auerbach and Gorodnichenko (2012b) have found that fiscal multipliers associated with government spending can fluctuate from being near zero in normal times to about 2.5 during recessions.5 If fiscal multipliers were larger than normal and growth projections implicitly assumed multipliers more consistent with normal times, then growth forecast errors should be systematically correlated with fiscal consolidation forecasts.<\/p><\/blockquote>\n

Perhaps Keynesian economics will make a comeback! I’ve often remarked that I don’t mind large deficits in hard times … as long as there is a credible plan, with accompanying legislation, for paying off the new debt within 20-30 years.<\/p>\n

America is a country in which rights are paramount. Unless you’re a bank<\/a>:<\/p>\n

\u201cThis dispute does not go to the merits of the matter but it does raise an important issue of principle: Whether we and other banks, large and small alike, have the fundamental right long recognized in this country to communicate freely with and seek confidential guidance from their lawyers,\u201d Zuccarelli said in an interview.<\/p>\n

Bryan Hubbard, an OCC spokesman, declined to comment on the agency\u2019s inquiry.<\/p>\n

In the letter sent to JPMorgan general counsel Stephen Cutler, the inspector general — the Treasury\u2019s internal watchdog — dismissed JPMorgan\u2019s arguments on attorney-client privilege, saying the OCC \u201ccould not do its work\u201d if banks were allowed to withhold information on that basis. The OCC, an independent bureau of Treasury, asked the IG office to review the situation, Thorson said in the letter.<\/p>\n

Failure to produce the records \u201cwill have to be seen as a continuing purposeful impediment to the authority of the OCC,\u201d Thorson said in the letter, and would require \u201cfurther action by our office.\u201d<\/p><\/blockquote>\n

Coming up next: hand over your Facebook password or be charged with obstructing justice.<\/p>\n

DBRS has a new methodology for rating life insurers<\/a>, but there were no major changes and it did not result in any ratings actions<\/a>. They did not opine on the result of OSFI’s consideration of the definition of capital<\/a>.<\/p>\n

It was a good day for the Canadian preferred share market, with PerpetualPremiums gaining 11bp, FixedResets winning 13bp and DeemedRetractibles up 12bp. Volatility was average, but all on the upside. Volume continued to be very low.<\/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>\n0.0266 %<\/td>\n2,487.8<\/td>\n<\/tr>\n
FixedFloater<\/td>\n4.26 %<\/td>\n3.62 %<\/td>\n29,442<\/td>\n18.00<\/td>\n1<\/td>\n0.8137 %<\/td>\n3,777.1<\/td>\n<\/tr>\n
Floater<\/td>\n2.80 %<\/td>\n3.00 %<\/td>\n54,178<\/td>\n19.75<\/td>\n4<\/td>\n0.0266 %<\/td>\n2,686.1<\/td>\n<\/tr>\n
OpRet<\/td>\n4.62 %<\/td>\n-5.60 %<\/td>\n50,346<\/td>\n0.41<\/td>\n4<\/td>\n0.0381 %<\/td>\n2,602.2<\/td>\n<\/tr>\n
SplitShare<\/td>\n4.63 %<\/td>\n4.67 %<\/td>\n48,412<\/td>\n4.35<\/td>\n2<\/td>\n0.2015 %<\/td>\n2,879.3<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n0.0381 %<\/td>\n2,379.5<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.25 %<\/td>\n-0.06 %<\/td>\n71,717<\/td>\n0.77<\/td>\n30<\/td>\n0.1098 %<\/td>\n2,338.1<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n4.85 %<\/td>\n4.88 %<\/td>\n132,763<\/td>\n15.70<\/td>\n4<\/td>\n0.1628 %<\/td>\n2,646.3<\/td>\n<\/tr>\n
FixedReset<\/td>\n4.92 %<\/td>\n2.90 %<\/td>\n202,436<\/td>\n4.01<\/td>\n78<\/td>\n0.1302 %<\/td>\n2,472.9<\/td>\n<\/tr>\n
Deemed-Retractible<\/td>\n4.87 %<\/td>\n-0.08 %<\/td>\n109,907<\/td>\n0.36<\/td>\n46<\/td>\n0.1202 %<\/td>\n2,434.0<\/td>\n<\/tr>\n<\/table>\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
MFC.PR.C<\/td>\nDeemed-Retractible<\/td>\n1.15 %<\/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 : 4.70 %<\/td>\n<\/tr>\n
GWO.PR.Q<\/td>\nDeemed-Retractible<\/td>\n1.20 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.21
\nBid-YTW : 4.53 %<\/td>\n<\/tr>\n
VNR.PR.A<\/td>\nFixedReset<\/td>\n1.26 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2017-10-15
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.49
\nBid-YTW : 3.23 %<\/td>\n<\/tr>\n
PWF.PR.P<\/td>\nFixedReset<\/td>\n1.49 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2043-01-04
\nMaturity Price : 23.64
\nEvaluated at bid price : 25.88
\nBid-YTW : 2.90 %<\/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
BNS.PR.Z<\/td>\nFixedReset<\/td>\n37,591<\/td>\nTD crossed 19,100 at 24.70.
\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.65
\nBid-YTW : 3.21 %<\/td>\n<\/tr>\n
BNS.PR.Q<\/td>\nFixedReset<\/td>\n24,090<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.97
\nBid-YTW : 3.21 %<\/td>\n<\/tr>\n
FTS.PR.G<\/td>\nFixedReset<\/td>\n21,669<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2043-01-04
\nMaturity Price : 23.77
\nEvaluated at bid price : 24.40
\nBid-YTW : 3.59 %<\/td>\n<\/tr>\n
IFC.PR.A<\/td>\nFixedReset<\/td>\n18,000<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.91
\nBid-YTW : 3.26 %<\/td>\n<\/tr>\n
ENB.PR.D<\/td>\nFixedReset<\/td>\n17,743<\/td>\nTD crossed 10,500 at 25.55.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2043-01-04
\nMaturity Price : 23.31
\nEvaluated at bid price : 25.50
\nBid-YTW : 3.58 %<\/td>\n<\/tr>\n
ENB.PR.T<\/td>\nFixedReset<\/td>\n15,283<\/td>\nRecent new issue<\/a>.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2043-01-04
\nMaturity Price : 23.18
\nEvaluated at bid price : 25.28
\nBid-YTW : 3.73 %<\/td>\n<\/tr>\n
There were 13 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
TRI.PR.B<\/td>\nFloater<\/td>\nQuote: 22.59 – 24.10
\nSpot Rate : 1.5100
\nAverage : 0.8370<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2043-01-04
\nMaturity Price : 22.32
\nEvaluated at bid price : 22.59
\nBid-YTW : 2.30 %<\/td>\n<\/tr>\n

ELF.PR.G<\/td>\nPerpetual-Discount<\/td>\nQuote: 24.30 – 24.80
\nSpot Rate : 0.5000
\nAverage : 0.4222<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2043-01-04
\nMaturity Price : 23.82
\nEvaluated at bid price : 24.30
\nBid-YTW : 4.88 %<\/td>\n<\/tr>\n

POW.PR.D<\/td>\nPerpetual-Premium<\/td>\nQuote: 25.08 – 25.25
\nSpot Rate : 0.1700
\nAverage : 0.1056<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-10-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.08
\nBid-YTW : 4.77 %<\/td>\n<\/tr>\n

HSE.PR.A<\/td>\nFixedReset<\/td>\nQuote: 26.08 – 26.27
\nSpot Rate : 0.1900
\nAverage : 0.1266<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2043-01-04
\nMaturity Price : 23.67
\nEvaluated at bid price : 26.08
\nBid-YTW : 2.95 %<\/td>\n<\/tr>\n

BAM.PR.T<\/td>\nFixedReset<\/td>\nQuote: 25.75 – 25.92
\nSpot Rate : 0.1700
\nAverage : 0.1071<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2043-01-04
\nMaturity Price : 23.45
\nEvaluated at bid price : 25.75
\nBid-YTW : 3.56 %<\/td>\n<\/tr>\n

BNS.PR.K<\/td>\nDeemed-Retractible<\/td>\nQuote: 25.70 – 25.95
\nSpot Rate : 0.2500
\nAverage : 0.1886<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2013-02-03
\nMaturity Price : 25.50
\nEvaluated at bid price : 25.70
\nBid-YTW : -8.99 %<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

There was a decent, but by no means stellar, US jobs number: Employers added workers in December at about the same pace as the prior month, and the unemployment rate matched a four-year low, showing …<\/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-20744","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/20744","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=20744"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/20744\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=20744"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=20744"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=20744"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}