{"id":25373,"date":"2014-05-28T19:47:57","date_gmt":"2014-05-29T00:47:57","guid":{"rendered":"http:\/\/prefblog.com\/?p=25373"},"modified":"2014-05-28T19:47:57","modified_gmt":"2014-05-29T00:47:57","slug":"may-28-2014","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=25373","title":{"rendered":"May 28, 2014"},"content":{"rendered":"

I was stunned to see the following chart in the Kansas City Fed paper by Fumiko Hayashi and Terri Bradford titled Mobile Payments: Merchants\u2019 Perspectives<\/a>:<\/p>\n

\"payments\"<\/a>
Click for Big<\/i><\/div>\n

Geez, I pay cash nearly every time! Does this make me an old Fudd? Mind you, though, the chart needs a footnote: if they are standing directly in front of me, then all three electronic methods will be tried several times each, after which the purchaser will pay the bill in nickels.<\/p>\n

Yesterday I took a shot at the Fair Trade do-gooders; today it’s the environmentalists’ turn<\/a>:<\/p>\n

London has a dirty secret.<\/p>\n

Levels of the harmful air pollutant nitrogen dioxide at a city-center monitoring station are the highest in Europe. Concentrations are greater even than in Beijing, where expatriates have dubbed the city\u2019s smog the \u201cairpocalypse.\u201d<\/p>\n

It\u2019s the law of unintended consequences at work. European Union efforts to fight climate change favored diesel fuel over gasoline because it emits less carbon dioxide, or CO2. However, diesel\u2019s contaminants have swamped benefits from measures that include a toll drivers pay to enter central London, a thriving bike-hire program and growing public-transport network.
…<\/b>
Europe-wide policy triggered the problem. The \u201cdieselisation\u201d of London\u2019s cars began with an agreement between car manufacturers and the EU in 1998 that aimed to lower the average CO2 emissions of new vehicles. Because of diesel\u2019s greater fuel economy, it increased in favor.<\/p>\n

The European Commission, the EU regulatory arm, \u201cis and always has been technologically neutral,\u201d said Joe Hennon, a spokesman. \u201cIt does not favor diesel over petrol-powered cars. How to achieve CO2 reductions is up to member states.\u201d<\/p>\n

EU rules enforced since 2000 allowed diesel cars to spew more than three times the amount of oxides of nitrogen including NO2 as those using gasoline. New rules that took effect in September narrow that gap.<\/p><\/blockquote>\n

In yet another rant with no relationship at all to Canadian preferred shares (what?) how about this explanation of soaring tuition costs<\/a> … not to mention a little flexing of new-found administrative muscle<\/a>:<\/p>\n

\"UniversityAdminJobs\"<\/a>
Click for Big<\/i><\/div>\n

In interest-rate related news (for a change!) the Treasury market was on fire today<\/a>:<\/p>\n

The U.S. sale of $35 billion of five-year notes drew the lowest yield in six months as a European bond rally bolstered the attractiveness of U.S. government securities.<\/p>\n

The notes yielded 1.513 percent at auction yesterday, the least since November. The bid-to-cover ratio, which gauges demand by comparing total bids with the amount of debt offered, was 2.73, versus an average of 2.65 at the past 10 sales. Treasuries rose earlier along with government securities across Europe as an unexpected jump in German unemployment fueled bets the European Central Bank will introduce further stimulus next week.<\/p>\n

\u201cIt was a strong auction, given the strength that we saw coming in,\u201d said Sean Murphy, a trader in New York at Societe Generale SA, one of 22 primary dealers obliged to bid at U.S. debt auctions. \u201cIn the global safe-bond world, the U.S. looks relatively cheap. And we are seeing that play out in the strength of Treasuries.\u201d<\/p>\n

The yield on the current five-year note fell five basis points, or 0.05 percentage point, to 1.48 percent at 5 p.m. yesterday in New York, according to Bloomberg Bond Trader prices. The yield on the benchmark 10-year note fell seven basis points to 2.44 percent.
…<\/b>
Yields on European sovereign debt fell to record lows as the number of people out of work in Germany rose 23,937 to 2.91 million in May, the Federal Labor Agency said. Economists surveyed by Bloomberg forecast a decline of 15,000.<\/p>\n

ECB President Mario Draghi said in Portugal this week policy makers need to be \u201cparticularly watchful\u201d of low inflation. Consumer-price increases in the euro region have been less than half the central bank\u2019s goal of just under 2 percent since October. The ECB meets June 5.<\/p><\/blockquote>\n

Laurence D. Fink of Blackrock is attempting to distract regulators with other issues<\/a>:<\/p>\n

BlackRock Inc. (BLK)\u2019s Laurence D. Fink, who oversees the world\u2019s biggest exchange-traded fund lineup, said leveraged ETFs are a structural problem and have the potential to \u201cblow up\u201d the industry.<\/p>\n

\u201cBlackRock would never do a leveraged ETF,\u201d Fink said in a question-and-answer session with Deutsche Bank AG co-chairman Anshu Jain today in New York. Fink said he doesn\u2019t understand why the U.S. Securities and Exchange Commission allows them to operate.
…<\/b>
Fink said today that products with embedded leverage should be supervised. Regulators should focus their efforts on products instead of the amount of assets managed when seeking to reduce risk in the financial system, he said. BlackRock is among large money managers that has been lobbying regulators and lawmakers to avoid being labeled a systemically important financial institution, or SIFI.<\/p><\/blockquote>\n

… and Scotia was unable to find a buyer for CI Financial<\/a>:<\/p>\n

Bank of Nova Scotia has settled on a plan to unload the majority of its stake in asset manager CI Financial Inc., opting to sell shares directly to public investors by way of a bought deal.<\/p>\n

Scotiabank is selling 72 million shares at $31.60 each, amounting $2.3-billion, making it one of the largest public offerings in Canada.<\/p><\/blockquote>\n

It was a poor day for the Canadian preferred share market, with PerpetualDiscounts off 5bp, FixedResets losing 38bp and DeemedRetractibles down 16bp. The relatively lengthy Performance Highlights table is dominated by losers. Volume was high.<\/p>\n

Update:<\/b> PerpetualDiscounts now yield 5.28%, equivalent to 6.86% interest at the standard equivalency factor of 1.3x. Long Corporates<\/a> now yield about 4.35%, so the pre-tax interest-equivalent spread (in this context, the Seniority Spread) is now about 250bp, a widening from the 240bp reported May 15<\/a>.<\/p>\n\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>\n0.0418 %<\/td>\n2,494.2<\/td>\n<\/tr>\n
FixedFloater<\/td>\n4.48 %<\/td>\n3.73 %<\/td>\n31,694<\/td>\n17.94<\/td>\n1<\/td>\n0.4263 %<\/td>\n3,831.7<\/td>\n<\/tr>\n
Floater<\/td>\n2.92 %<\/td>\n3.06 %<\/td>\n49,687<\/td>\n19.52<\/td>\n4<\/td>\n0.0418 %<\/td>\n2,693.1<\/td>\n<\/tr>\n
OpRet<\/td>\n4.38 %<\/td>\n-11.33 %<\/td>\n33,755<\/td>\n0.10<\/td>\n2<\/td>\n0.0585 %<\/td>\n2,709.0<\/td>\n<\/tr>\n
SplitShare<\/td>\n4.80 %<\/td>\n3.85 %<\/td>\n62,896<\/td>\n4.18<\/td>\n5<\/td>\n0.3374 %<\/td>\n3,120.9<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n0.0585 %<\/td>\n2,477.1<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.50 %<\/td>\n-10.74 %<\/td>\n88,259<\/td>\n0.09<\/td>\n15<\/td>\n0.0000 %<\/td>\n2,408.4<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n5.28 %<\/td>\n5.28 %<\/td>\n104,198<\/td>\n14.90<\/td>\n21<\/td>\n-0.0524 %<\/td>\n2,552.5<\/td>\n<\/tr>\n
FixedReset<\/td>\n4.54 %<\/td>\n3.60 %<\/td>\n203,877<\/td>\n6.74<\/td>\n75<\/td>\n-0.3821 %<\/td>\n2,539.1<\/td>\n<\/tr>\n
Deemed-Retractible<\/td>\n5.00 %<\/td>\n-0.23 %<\/td>\n155,535<\/td>\n0.09<\/td>\n43<\/td>\n-0.1611 %<\/td>\n2,523.5<\/td>\n<\/tr>\n
FloatingReset<\/td>\n2.66 %<\/td>\n2.39 %<\/td>\n151,987<\/td>\n4.01<\/td>\n6<\/td>\n-0.0132 %<\/td>\n2,487.7<\/td>\n<\/tr>\n<\/table>\n\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
SLF.PR.G<\/td>\nFixedReset<\/td>\n-1.62 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2025-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 22.52
\nBid-YTW : 4.26 %<\/td>\n<\/tr>\n
BMO.PR.Q<\/td>\nFixedReset<\/td>\n-1.32 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.61
\nBid-YTW : 3.33 %<\/td>\n<\/tr>\n
CU.PR.E<\/td>\nPerpetual-Discount<\/td>\n-1.19 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-05-28
\nMaturity Price : 23.65
\nEvaluated at bid price : 24.02
\nBid-YTW : 5.11 %<\/td>\n<\/tr>\n
GWO.PR.N<\/td>\nFixedReset<\/td>\n-1.17 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2025-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 22.90
\nBid-YTW : 4.07 %<\/td>\n<\/tr>\n
BAM.PF.D<\/td>\nPerpetual-Discount<\/td>\n-1.15 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-05-28
\nMaturity Price : 21.98
\nEvaluated at bid price : 22.26
\nBid-YTW : 5.58 %<\/td>\n<\/tr>\n
BNS.PR.P<\/td>\nFixedReset<\/td>\n-1.06 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2018-04-25
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.12
\nBid-YTW : 3.30 %<\/td>\n<\/tr>\n
ENB.PR.Y<\/td>\nFixedReset<\/td>\n-1.04 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-05-28
\nMaturity Price : 22.65
\nEvaluated at bid price : 23.76
\nBid-YTW : 4.11 %<\/td>\n<\/tr>\n
PWF.PR.S<\/td>\nPerpetual-Discount<\/td>\n1.50 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-05-28
\nMaturity Price : 23.29
\nEvaluated at bid price : 23.61
\nBid-YTW : 5.12 %<\/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
BMO.PR.S<\/td>\nFixedReset<\/td>\n193,518<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-05-28
\nMaturity Price : 23.22
\nEvaluated at bid price : 25.18
\nBid-YTW : 3.79 %<\/td>\n<\/tr>\n
RY.PR.B<\/td>\nDeemed-Retractible<\/td>\n116,152<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-08-24
\nMaturity Price : 25.25
\nEvaluated at bid price : 25.56
\nBid-YTW : -0.23 %<\/td>\n<\/tr>\n
BNS.PR.R<\/td>\nFixedReset<\/td>\n107,814<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.40
\nBid-YTW : 3.50 %<\/td>\n<\/tr>\n
BAM.PR.P<\/td>\nFixedReset<\/td>\n73,260<\/td>\nCalled for redemption<\/a>.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-09-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.65
\nBid-YTW : 2.58 %<\/td>\n<\/tr>\n
ENB.PF.C<\/td>\nFixedReset<\/td>\n69,411<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-05-28
\nMaturity Price : 23.08
\nEvaluated at bid price : 24.88
\nBid-YTW : 4.19 %<\/td>\n<\/tr>\n
BAM.PR.X<\/td>\nFixedReset<\/td>\n65,012<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-05-28
\nMaturity Price : 21.86
\nEvaluated at bid price : 22.15
\nBid-YTW : 4.07 %<\/td>\n<\/tr>\n
There were 47 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
ENB.PR.Y<\/td>\nFixedReset<\/td>\nQuote: 23.76 – 24.12
\nSpot Rate : 0.3600
\nAverage : 0.2078<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-05-28
\nMaturity Price : 22.65
\nEvaluated at bid price : 23.76
\nBid-YTW : 4.11 %<\/td>\n<\/tr>\n

MFC.PR.B<\/td>\nDeemed-Retractible<\/td>\nQuote: 22.60 – 22.89
\nSpot Rate : 0.2900
\nAverage : 0.1866<\/p>\n

YTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2025-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 22.60
\nBid-YTW : 5.87 %<\/td>\n<\/tr>\n

CU.PR.E<\/td>\nPerpetual-Discount<\/td>\nQuote: 24.02 – 24.35
\nSpot Rate : 0.3300
\nAverage : 0.2304<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-05-28
\nMaturity Price : 23.65
\nEvaluated at bid price : 24.02
\nBid-YTW : 5.11 %<\/td>\n<\/tr>\n

TRP.PR.E<\/td>\nFixedReset<\/td>\nQuote: 25.16 – 25.40
\nSpot Rate : 0.2400
\nAverage : 0.1417<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-05-28
\nMaturity Price : 23.19
\nEvaluated at bid price : 25.16
\nBid-YTW : 3.88 %<\/td>\n<\/tr>\n

BAM.PR.K<\/td>\nFloater<\/td>\nQuote: 17.25 – 17.50
\nSpot Rate : 0.2500
\nAverage : 0.1518<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-05-28
\nMaturity Price : 17.25
\nEvaluated at bid price : 17.25
\nBid-YTW : 3.07 %<\/td>\n<\/tr>\n

BAM.PR.B<\/td>\nFloater<\/td>\nQuote: 17.26 – 17.60
\nSpot Rate : 0.3400
\nAverage : 0.2558<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-05-28
\nMaturity Price : 17.26
\nEvaluated at bid price : 17.26
\nBid-YTW : 3.07 %<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

I was stunned to see the following chart in the Kansas City Fed paper by Fumiko Hayashi and Terri Bradford titled Mobile Payments: Merchants\u2019 Perspectives: Click for Big Geez, I pay cash nearly every time! …<\/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-25373","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/25373","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=25373"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/25373\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=25373"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=25373"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=25373"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}