{"id":30210,"date":"2015-08-19T23:02:35","date_gmt":"2015-08-20T04:02:35","guid":{"rendered":"http:\/\/prefblog.com\/?p=30210"},"modified":"2015-08-19T23:02:35","modified_gmt":"2015-08-20T04:02:35","slug":"august-19-2015","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=30210","title":{"rendered":"August 19, 2015"},"content":{"rendered":"

The Fed is uncertain on inflation<\/a>:<\/p>\n

Federal Reserve officials signaled concern about stubbornly low inflation even as they indicated that an improving job market is bringing them closer to the first interest-rate increase in almost a decade.<\/p>\n

Participants in the July 28-29 Federal Open Market Committee meeting said economic conditions \u201cwere approaching that point\u201d where the economy could sustain a slight increase in borrowing costs, according to minutes of the meeting released in Washington on Wednesday.<\/p>\n

Preserving their flexibility on the timing of rate liftoff, they also showed more concern about how soon they would hit their 2 percent inflation target, a goal they have missed for more than three years.<\/p><\/blockquote>\n

… so the cowboys are getting cold feet about the Fed liftoff<\/a>:<\/p>\n

Traders gearing up for the Federal Reserve to raise interest-rates next month reversed course Wednesday after minutes from the central bank\u2019s July meeting showed policy makers were still waffling on whether the economy is strong enough to warrant higher borrowing costs.<\/p>\n

That’s far short of the confidence they expected to see from a central bank supposedly just weeks away from what would be the first increase in almost a decade.<\/p>\n

The probability that futures traders assign to a rate boost next month slid to 36 percent, the lowest since July, from about 50 percent earlier in the day. The levels assume that the Fed\u2019s target will average 0.375 percent after the first move. The chance of an increase at or before the Fed’s December meeting dropped as well, to 65 percent from 73 percent Tuesday.<\/p><\/blockquote>\n

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

GWO, proud issuer of more preferred shares than you can shake a stick at, was confirmed at Pfd-1(high) by DBRS<\/a>:<\/p>\n

Combining somewhat higher leverage with stable profits, GWO has been able to produce an above-peer return on equity in the mid-teens for several years running. As the Company is the largest insurer in Canada, its top-line growth will be limited largely to total market growth. Growth by acquisition within Canada is also constrained, given the dominance of the big three insurers. Achieving a full turnaround with the Putnam investment subsidiary has proven elusive, but recently its funds have achieved high-ranking performance statistics, which should allow a shift toward better results.<\/p>\n

Financial leverage at June 30, 2015, is 27.5%, which has shown considerable improvement over recent quarters.<\/p>\n

The Canadian operations have a Minimum Continuing Capital and Surplus Requirements ratio of 229%, which is satisfactory. The Company\u2019s U.S. subsidiaries follow and meet U.S. regulatory requirements.<\/p>\n

The Company\u2019s credit rating may be negatively affected by an extended decline in interest rates or equity market returns (though it is less sensitive to these declines than its peers), which would affect long-term product profitability; a sustained reduction in earnings; or by large debt-financed acquisitions. Conversely, GWO\u2019s rating may benefit from further improvements in its leverage and coverage ratios.<\/p><\/blockquote>\n

Today’s market moronization<\/a> means that none of the following numbers should be taken very seriously, but we’ll do what we can …<\/p>\n

It was a mixed day for the Canadian preferred share market, with PerpetualDiscounts up 18bp, FixedResets getting whacked for 74bp and DeemedRetractibles gaining 10bp. The Performance Highlights table is:<\/p>\n