{"id":22673,"date":"2013-08-02T22:52:41","date_gmt":"2013-08-03T02:52:41","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=22673"},"modified":"2013-08-02T22:52:41","modified_gmt":"2013-08-03T02:52:41","slug":"august-2-2013","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=22673","title":{"rendered":"August 2, 2013"},"content":{"rendered":"

The US jobs number was no great shakes<\/a>:<\/p>\n

\u201cThis number isn\u2019t an earth-shaker,\u201d John Manley, who helps oversee $222.7 billion as chief equity strategist for Wells Fargo Funds Management in New York, said in a phone interview. \u201cIt is debatable if it was good or bad. It was OK. The number still indicates the Fed is going to be there for a while, that is not bad.\u201d<\/p>\n

The 162,000 increase in payrolls last month was the smallest in four months and followed a revised 188,000 rise in June that was less than initially estimated, Labor Department figures showed today in Washington. The median forecast of 93 economists surveyed by Bloomberg called for a 185,000 gain. Workers spent fewer hours on the job and hourly earnings fell for the first time since October.
\nThe unemployment rate was forecast to drop to 7.5 percent from 7.6 percent, according to the Bloomberg survey median.<\/p><\/blockquote>\n

Matthew Klein of Bloomberg points out<\/a>:<\/p>\n

The BLS report also tells us what kinds of jobs were added. Here again, the news is not particularly encouraging. More than half of the jobs added last month were either in retail trade or “food services and drinking places.” People employed in those sectors tend to have much shorter work weeks and much lower hourly wages than everyone else.<\/p>\n

Even worse, a recent paper by Canadian researchers suggests that many of the people taking these jobs are relatively over-educated. The authors argue that, since 2000, globalization and technological advancement have reduced the demand for “high-skilled” workers. Desperate for employment, these workers ended up pushing the “lower-skilled” out of the job market entirely. This may help explain why the share of people aged 25 to 54 counted as being in the labor force has plunged by 3.5 percentage points since 2000.<\/p>\n

The quality of jobs being created is probably connected to the depressing performance of incomes and the decline in the work week. Hourly pay has grown by just 1.9 percent over the past 12 months — basically unchanged since the end of 2009. The data from the BEA tell a similar story. Real after-tax incomes fell in June. Americans still have less purchasing power than they did in November 2012. Our standard of living has barely improved over the past year.<\/p><\/blockquote>\n

There’s some good, if politically motivated discussion at hotair.com<\/a>.<\/p>\n

Assiduous Reader nervousone<\/i> begs me to point out<\/a>:<\/p>\n

James, if you\u2019re going to mention the July number in an upcoming comment, show them you\u2019re ahead of the game and make me proud . . . please include this [final paragraph] from todays release,<\/p>\n

\u201cThe change in total nonfarm payroll employment for May was revised from +195,000 to +176,000, and the change for June was revised from +195,000 to +188,000.\u201d<\/p>\n

No one else will mention it . . . or trade on it (well almost no one else).<\/p><\/blockquote>\n

The twenty minutes bracketting the jobs announcement is entertaining. Every cowboy in the world is placing a bet on what the number will be and how the market will react to it, then reversing the trade a few minutes afterwards, taking whatever P&L there might be – so there’s lots of volume and the dealers jack up their spreads.<\/p>\n

Of perhaps more importance than the revisions is the quality of the jobs. Lots of times they’re part-time, or all government, or (as in the current case) largely crummy jobs … there’s a lot more to the number than the headline.<\/p>\n

I’m sure that somebody, somewhere, has a proper econometric model that incorporates the data – all the data – in a sensible manner (possibly feeding into a Taylor Rule based system) whereby a sensible person could actually trade at prices that made sense, once the spreads returned to normal; but in such a rational system, the jobs number would (a) be only one of many inputs, and (b) be foreshadowed by the ADP number anyway. I have, however, never seen such a system.<\/p>\n

In Canada, those with jobs are buying houses<\/a>:<\/p>\n

Sales of existing homes in both Toronto and Vancouver, the country\u2019s two most precarious housing markets, hit their highest level for the month of July since 2009 last month.<\/p>\n

Greater Vancouver saw a 40.4 per cent year-over-year increase in sales over the Multiple Listing Service, while the Greater Toronto Area saw a 16-per-cent increase.
…<\/b>
The Toronto Real Estate Board, meanwhile, noted that last month was the third highest July on record for the city, and pointed to an eight per cent year-over-year increase in the average selling price, to $513,246, as evidence that market conditions are tightening (though averages can be skewed by the types of homes that are selling).<\/p><\/blockquote>\n

There’s a little reaction to the politicization of the next Fed appointment<\/a>:<\/p>\n

Since the president in an interview with Charlie Rose June 16 indicated he wouldn\u2019t reappoint Federal Reserve Chairman Ben Bernanke, intrigue over his successor has grown to a level where Fed experts and former administration officials are concerned that the selection process is so political it could have long-lasting ramifications for the markets, the eventual nominee\u2019s confirmation hearings and the Fed as an institution.<\/p>\n

\u201cWhat\u2019s really unfortunate is how public and polarized this debate has gotten,\u201d Mohamed El-Erian, chief executive officer at Pacific Investment Management Co., the world\u2019s biggest mutual fund, said in an interview on Bloomberg Television. \u201cThis has an impact for the market going forward.\u201d<\/p>\n

The president and White House officials have spent the last week trying to defuse an escalating public contest between Lawrence Summers, Obama\u2019s former top economic adviser, and Janet Yellen, the Fed\u2019s current Vice Chair.<\/p>\n

Confronted by a chorus of concerns about Summers — and letters from House and Senate Democrats voicing support for Yellen — Obama on Capitol Hill told his party\u2019s lawmakers on July 31 that he has interviewed \u201clots\u201d of candidates. He threw a new name into the mix, former Fed Vice Chair Donald Kohn, as he and his aides tried to buy some time, saying the choice was weeks away and not until autumn.<\/p><\/blockquote>\n

The post-mortems on the Fabulous Fab verdict<\/a> are coming in:<\/p>\n

Fabrice Tourre, the former Goldman Sachs Group Inc. (GS) vice president found liable for his role in a failed $1 billion investment, may have lost his case because jurors rejected his defense that as a junior employee he wasn\u2019t primarily responsible for the transaction.<\/p>\n

\u201cBeing 28 years old and one of several employees of Goldman Sachs isn\u2019t a defense,\u201d Tom Gorman, a former lawyer with the Securities and Exchange Commission\u2019s Enforcement Division, who is now in private practice, said in an interview.<\/p>\n

Tourre was a highly paid specialist working in a particular area who asked people to invest billions of dollars in a product he created, Gorman said.<\/p><\/blockquote>\n

I think the part “asked people to invest” part is a bit overstated, although technically true. He was a salesman. He had a product. Sold it. Big deal. It is the role of a Portfolio Manager to select good stuff from oodles and oodles of bad they are offered every single day.<\/p>\n

Megan McArdle of Bloomberg has a good perspective<\/a>:<\/p>\n

The picture you get from reading about the testimony in the Fabrice \u201cFabulous Fab\u201d Tourre case is of a bunch of people behaving like idiots. Tourre appears willing to say anything to potential buyers to close the deal. The people buying his mortgage bonds don\u2019t inquire as to whether hedge-funder John Paulson\u2019s \u201cequity perspective\u201d is equivalent to an \u201cequity investment\u201d; they just assume it is, and give Fab Tourre a bunch of money.<\/p>\n

But was all this illegal? My impression from watching coverage of the case was that the Securities and Exchange Commission\u2019s case against Tourre was pretty weak. That\u2019s why his lawyers rested without calling any witnesses. And these defenders aren\u2019t arrogant idiots; one securities lawyer I know says they\u2019re \u201ctop notch.\u201d<\/p>\n

So why did the jury find against him? It\u2019s not exactly clear. \u201cAt the end of the day, he probably could have done the right thing,” one, a 61-year-old school principal, said. “But he chose to play the game.”
…<\/b>
One hears it over and over, in writing about the financial crisis: \u201cWhy isn\u2019t someone in jail?\u201d Fab Tourre is someone. To be sure, he isn\u2019t a very important someone. And he\u2019s not actually going to jail, because this was a civil trial. But we can\u2019t indict \u201cthe game.\u201d Fab Tourre may have been the closest substitute we could find.<\/p><\/blockquote>\n

It was a day of modest declines in the Canadian preferred share market, with PerpetualDiscounts off 4bp, FixedResets down 5bp and DeemedRetractibles losing 6bp. Volatility was relatively high, but with no clear pattern. Volume was very low, since many hard-working participants in the highest paid profession on earth took the afternoon off ahead of the long weekend; this provides more time to complain about the appalling work ethic prevalent among bar and restaurant staff.<\/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>\n0.4811 %<\/td>\n2,622.0<\/td>\n<\/tr>\n
FixedFloater<\/td>\n4.10 %<\/td>\n3.40 %<\/td>\n32,085<\/td>\n18.57<\/td>\n1<\/td>\n0.0000 %<\/td>\n4,046.5<\/td>\n<\/tr>\n
Floater<\/td>\n2.56 %<\/td>\n2.85 %<\/td>\n78,504<\/td>\n20.10<\/td>\n5<\/td>\n0.4811 %<\/td>\n2,831.0<\/td>\n<\/tr>\n
OpRet<\/td>\n4.60 %<\/td>\n2.28 %<\/td>\n79,200<\/td>\n0.65<\/td>\n3<\/td>\n-0.2296 %<\/td>\n2,620.7<\/td>\n<\/tr>\n
SplitShare<\/td>\n4.69 %<\/td>\n4.94 %<\/td>\n59,110<\/td>\n4.16<\/td>\n6<\/td>\n0.0799 %<\/td>\n2,954.3<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n-0.2296 %<\/td>\n2,396.4<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.67 %<\/td>\n5.16 %<\/td>\n90,720<\/td>\n0.73<\/td>\n12<\/td>\n0.0579 %<\/td>\n2,281.7<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n5.41 %<\/td>\n5.50 %<\/td>\n151,332<\/td>\n14.60<\/td>\n25<\/td>\n-0.0427 %<\/td>\n2,377.9<\/td>\n<\/tr>\n
FixedReset<\/td>\n4.95 %<\/td>\n3.65 %<\/td>\n230,146<\/td>\n3.75<\/td>\n85<\/td>\n-0.0549 %<\/td>\n2,464.9<\/td>\n<\/tr>\n
Deemed-Retractible<\/td>\n5.12 %<\/td>\n4.91 %<\/td>\n184,633<\/td>\n7.01<\/td>\n43<\/td>\n-0.0590 %<\/td>\n2,361.1<\/td>\n<\/tr>\n<\/table>\n\n\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
CU.PR.F<\/td>\nPerpetual-Discount<\/td>\n-1.49 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2043-08-02
\nMaturity Price : 21.51
\nEvaluated at bid price : 21.81
\nBid-YTW : 5.23 %<\/td>\n<\/tr>\n
BAM.PF.A<\/td>\nFixedReset<\/td>\n-1.34 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2043-08-02
\nMaturity Price : 23.15
\nEvaluated at bid price : 25.01
\nBid-YTW : 4.53 %<\/td>\n<\/tr>\n
CU.PR.E<\/td>\nPerpetual-Discount<\/td>\n-1.24 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2043-08-02
\nMaturity Price : 23.49
\nEvaluated at bid price : 23.83
\nBid-YTW : 5.21 %<\/td>\n<\/tr>\n
FTS.PR.G<\/td>\nFixedReset<\/td>\n-1.00 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2043-08-02
\nMaturity Price : 22.64
\nEvaluated at bid price : 23.71
\nBid-YTW : 4.07 %<\/td>\n<\/tr>\n
TRP.PR.D<\/td>\nFixedReset<\/td>\n1.01 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2043-08-02
\nMaturity Price : 23.10
\nEvaluated at bid price : 24.95
\nBid-YTW : 3.99 %<\/td>\n<\/tr>\n
MFC.PR.F<\/td>\nFixedReset<\/td>\n1.26 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2025-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.20
\nBid-YTW : 3.86 %<\/td>\n<\/tr>\n
BAM.PR.B<\/td>\nFloater<\/td>\n1.31 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2043-08-02
\nMaturity Price : 18.54
\nEvaluated at bid price : 18.54
\nBid-YTW : 2.85 %<\/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.Q<\/td>\nFixedReset<\/td>\n36,135<\/td>\nRBC sold 24,000 to Anonymous at 24.95.
\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.90
\nBid-YTW : 3.55 %<\/td>\n<\/tr>\n
BNS.PR.Z<\/td>\nFixedReset<\/td>\n29,833<\/td>\nNational crossed 20,000 at 23.90.
\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 23.89
\nBid-YTW : 3.92 %<\/td>\n<\/tr>\n
TD.PR.Q<\/td>\nDeemed-Retractible<\/td>\n28,620<\/td>\nTD crossed 25,000 at 25.85.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2017-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.80
\nBid-YTW : 4.63 %<\/td>\n<\/tr>\n
ENB.PR.B<\/td>\nFixedReset<\/td>\n26,986<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2043-08-02
\nMaturity Price : 23.25
\nEvaluated at bid price : 24.95
\nBid-YTW : 4.06 %<\/td>\n<\/tr>\n
RY.PR.P<\/td>\nFixedReset<\/td>\n26,340<\/td>\nRBC bought 10,000 from CIBC at 25.37.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-02-24
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.32
\nBid-YTW : 3.27 %<\/td>\n<\/tr>\n
ENB.PR.Y<\/td>\nFixedReset<\/td>\n25,550<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2043-08-02
\nMaturity Price : 22.93
\nEvaluated at bid price : 24.51
\nBid-YTW : 4.11 %<\/td>\n<\/tr>\n
There were 14 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: 23.31 – 24.50
\nSpot Rate : 1.1900
\nAverage : 0.9570<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2043-08-02
\nMaturity Price : 23.04
\nEvaluated at bid price : 23.31
\nBid-YTW : 2.24 %<\/td>\n<\/tr>\n

BAM.PR.J<\/td>\nOpRet<\/td>\nQuote: 26.64 – 27.18
\nSpot Rate : 0.5400
\nAverage : 0.3445<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-03-31
\nMaturity Price : 26.00
\nEvaluated at bid price : 26.64
\nBid-YTW : 2.17 %<\/td>\n<\/tr>\n

HSB.PR.C<\/td>\nDeemed-Retractible<\/td>\nQuote: 25.02 – 25.45
\nSpot Rate : 0.4300
\nAverage : 0.2915<\/p>\n

YTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.02
\nBid-YTW : 5.19 %<\/td>\n<\/tr>\n

GWO.PR.Q<\/td>\nDeemed-Retractible<\/td>\nQuote: 24.53 – 24.87
\nSpot Rate : 0.3400
\nAverage : 0.2350<\/p>\n

YTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2025-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.53
\nBid-YTW : 5.46 %<\/td>\n<\/tr>\n

CU.PR.C<\/td>\nFixedReset<\/td>\nQuote: 25.55 – 25.90
\nSpot Rate : 0.3500
\nAverage : 0.2458<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2017-06-01
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.55
\nBid-YTW : 3.59 %<\/td>\n<\/tr>\n

ENB.PR.D<\/td>\nFixedReset<\/td>\nQuote: 24.61 – 24.85
\nSpot Rate : 0.2400
\nAverage : 0.1443<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2043-08-02
\nMaturity Price : 23.05
\nEvaluated at bid price : 24.61
\nBid-YTW : 4.10 %<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

The US jobs number was no great shakes: \u201cThis number isn\u2019t an earth-shaker,\u201d John Manley, who helps oversee $222.7 billion as chief equity strategist for Wells Fargo Funds Management in New York, said in a …<\/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-22673","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/22673","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=22673"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/22673\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=22673"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=22673"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=22673"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}