{"id":7293,"date":"2009-07-17T16:17:11","date_gmt":"2009-07-17T20:17:11","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=7293"},"modified":"2009-07-17T16:17:11","modified_gmt":"2009-07-17T20:17:11","slug":"july-17-2009","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=7293","title":{"rendered":"July 17, 2009"},"content":{"rendered":"

I have often noted on this blog that one problem with big banks is that there are too many layers of servile management between the people who really know what’s going on and the decision makers. Guess what happens when middle management is not servile<\/a>?:<\/p>\n

Paul Moore compares his dismissal as head of risk at failed U.K. bank HBOS Plc to King Henry VIII\u2019s decapitation of his sainted Chancellor Thomas More 474 years ago.<\/p>\n

Moore lost his job in 2004 after he warned that the bank\u2019s growth strategy posed \u201ca serious risk to financial stability.\u201d More lost his head in 1535 after he refused to recognize Henry VIII\u2019s self-appointment as head of the Church of England.<\/p>\n

\u201cThere is a natural conflict of interest where people whose job it is to challenge have to report to those who have the power of life and death over them,\u201d Moore, 50, said in an interview in London. \u201cWhat caused this financial crisis was the inadequate balance and separation of powers.\u201d<\/p>\n

Risk and compliance managers should report to a non- executive director for \u201cquality assurance,\u201d rather than to the executives they monitor, Moore said. His idea was rejected yesterday in a preliminary government review of banks by former Bank of England director David Walker. Risk managers should report to both executives and non-executives, Walker said.<\/p><\/blockquote>\n

It’s something of tricky question. Dotted line reporting means no responsibility; dual reporting is just a shade on the nutbar side. On the other hand, if I was on the director’s risk committee and I didn’t have all the access I wanted to the Chief Risk Officer (or didn’t have confidence in him), I’d be a little upset. It should also be noted that risk management is a cost centre, not a profit centre. I’ve seen some of the ads for risk management personnel … invariably, anybody with enough brains, balls and knowledge to do the job properly can make way more money doing something else.<\/p>\n

OSFI has promoted another ex-banker<\/a> to help regulate the banks.<\/p>\n

Today’s CIT news<\/a> is:<\/p>\n

CIT Group Inc. advisers, including JPMorgan Chase & Co. and Morgan Stanley, have begun discussing options for funding the lender if it succumbs to bankruptcy, according to people with knowledge of the matter.<\/p>\n

JPMorgan and Morgan Stanley are in talks with other banks about a debtor-in-possession loan, used to fund a company\u2019s operations after it seeks court protection from creditors, said the people, who declined to be identified because the negotiations are private. CIT and its advisers, including Morgan Stanley and Evercore Partners Inc., are also trying to arrange rescue financing to avert bankruptcy, they said.
…<\/b>
\u201cThis thing doesn\u2019t have a future,\u201d CreditSights analyst David Hendler said today in a telephone interview. \u201cAnything is possible but the problem is not solvable anymore. They\u2019re just in denial it\u2019s finally over,\u201d the New York-based analyst said referring to the rescue financing. <\/p><\/blockquote>\n

I have other things to do<\/a> this weekend, so the market update will be late … really late … Sunday evening?<\/p>\n

Update, 2009-7-19<\/b>: Another good strong day for preferreds on good volume, with FixedReset median YTW all the way down to 4.20%!<\/p>\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>\n0.5864 %<\/td>\n1,161.6<\/td>\n<\/tr>\n
FixedFloater<\/td>\n7.25 %<\/td>\n5.46 %<\/td>\n34,371<\/td>\n16.69<\/td>\n1<\/td>\n0.0000 %<\/td>\n2,118.3<\/td>\n<\/tr>\n
Floater<\/td>\n3.28 %<\/td>\n3.90 %<\/td>\n81,199<\/td>\n17.64<\/td>\n3<\/td>\n0.5864 %<\/td>\n1,451.1<\/td>\n<\/tr>\n
OpRet<\/td>\n4.97 %<\/td>\n-3.23 %<\/td>\n132,618<\/td>\n0.08<\/td>\n15<\/td>\n0.1149 %<\/td>\n2,221.1<\/td>\n<\/tr>\n
SplitShare<\/td>\n6.06 %<\/td>\n4.72 %<\/td>\n95,193<\/td>\n4.15<\/td>\n4<\/td>\n0.3460 %<\/td>\n1,933.9<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n0.1149 %<\/td>\n2,031.0<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n0.1067 %<\/td>\n1,778.5<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n6.23 %<\/td>\n6.27 %<\/td>\n157,707<\/td>\n13.54<\/td>\n71<\/td>\n0.1067 %<\/td>\n1,638.0<\/td>\n<\/tr>\n
FixedReset<\/td>\n5.53 %<\/td>\n4.20 %<\/td>\n576,647<\/td>\n4.24<\/td>\n40<\/td>\n0.3334 %<\/td>\n2,079.1<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\n\n\n\n\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
POW.PR.D<\/td>\nPerpetual-Discount<\/td>\n-2.30 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-07-17
\nMaturity Price : 19.54
\nEvaluated at bid price : 19.54
\nBid-YTW : 6.45 %<\/td>\n<\/tr>\n
GWO.PR.G<\/td>\nPerpetual-Discount<\/td>\n-1.34 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-07-17
\nMaturity Price : 20.55
\nEvaluated at bid price : 20.55
\nBid-YTW : 6.40 %<\/td>\n<\/tr>\n
HSB.PR.C<\/td>\nPerpetual-Discount<\/td>\n-1.12 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-07-17
\nMaturity Price : 20.27
\nEvaluated at bid price : 20.27
\nBid-YTW : 6.36 %<\/td>\n<\/tr>\n
HSB.PR.D<\/td>\nPerpetual-Discount<\/td>\n-1.06 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-07-17
\nMaturity Price : 19.69
\nEvaluated at bid price : 19.69
\nBid-YTW : 6.42 %<\/td>\n<\/tr>\n
RY.PR.I<\/td>\nFixedReset<\/td>\n1.05 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-07-17
\nMaturity Price : 23.45
\nEvaluated at bid price : 25.90
\nBid-YTW : 4.25 %<\/td>\n<\/tr>\n
SLF.PR.C<\/td>\nPerpetual-Discount<\/td>\n1.11 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-07-17
\nMaturity Price : 17.26
\nEvaluated at bid price : 17.26
\nBid-YTW : 6.52 %<\/td>\n<\/tr>\n
SLF.PR.D<\/td>\nPerpetual-Discount<\/td>\n1.11 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-07-17
\nMaturity Price : 17.25
\nEvaluated at bid price : 17.25
\nBid-YTW : 6.52 %<\/td>\n<\/tr>\n
ELF.PR.F<\/td>\nPerpetual-Discount<\/td>\n1.17 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-07-17
\nMaturity Price : 19.01
\nEvaluated at bid price : 19.01
\nBid-YTW : 7.03 %<\/td>\n<\/tr>\n
MFC.PR.C<\/td>\nPerpetual-Discount<\/td>\n1.20 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-07-17
\nMaturity Price : 17.64
\nEvaluated at bid price : 17.64
\nBid-YTW : 6.46 %<\/td>\n<\/tr>\n
CU.PR.B<\/td>\nPerpetual-Discount<\/td>\n1.21 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-07-17
\nMaturity Price : 24.86
\nEvaluated at bid price : 25.15
\nBid-YTW : 6.05 %<\/td>\n<\/tr>\n
HSB.PR.E<\/td>\nFixedReset<\/td>\n1.23 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-07-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 27.95
\nBid-YTW : 4.11 %<\/td>\n<\/tr>\n
BMO.PR.M<\/td>\nFixedReset<\/td>\n1.53 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-07-17
\nMaturity Price : 23.50
\nEvaluated at bid price : 25.89
\nBid-YTW : 4.01 %<\/td>\n<\/tr>\n
TRI.PR.B<\/td>\nFloater<\/td>\n1.55 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-07-17
\nMaturity Price : 15.75
\nEvaluated at bid price : 15.75
\nBid-YTW : 2.51 %<\/td>\n<\/tr>\n
GWO.PR.F<\/td>\nPerpetual-Discount<\/td>\n1.63 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-07-17
\nMaturity Price : 23.46
\nEvaluated at bid price : 23.73
\nBid-YTW : 6.27 %<\/td>\n<\/tr>\n
BNA.PR.C<\/td>\nSplitShare<\/td>\n1.83 %<\/td>\nAsset coverage of 2.6+:1 as of July 8, according to DBRS<\/a>.
\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2019-01-10
\nMaturity Price : 25.00
\nEvaluated at bid price : 16.66
\nBid-YTW : 10.01 %<\/td>\n<\/tr>\n
BAM.PR.J<\/td>\nOpRet<\/td>\n2.73 %<\/td>\nYTW SCENARIO
\nMaturity Type : Soft Maturity
\nMaturity Date\t: 2018-03-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 22.60
\nBid-YTW : 6.97 %<\/td>\n<\/tr>\n
MFC.PR.E<\/td>\nFixedReset<\/td>\n3.44 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-10-19
\nMaturity Price : 25.00
\nEvaluated at bid price : 27.09
\nBid-YTW : 3.99 %<\/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
MFC.PR.B<\/td>\nPerpetual-Discount<\/td>\n148,510<\/td>\nNesbitt crossed 20,000 at 18.20; RBC crossed 60,000 at the same price; Nesbitt crossed 37,500 at 18.21.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-07-17
\nMaturity Price : 18.15
\nEvaluated at bid price : 18.15
\nBid-YTW : 6.49 %<\/td>\n<\/tr>\n
BMO.PR.P<\/td>\nFixedReset<\/td>\n99,320<\/td>\nNesbitt crossed 15,000 at 26.85.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2015-03-27
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.68
\nBid-YTW : 4.15 %<\/td>\n<\/tr>\n
TD.PR.G<\/td>\nFixedReset<\/td>\n94,150<\/td>\nNesbitt crossed 70,000 at 27.71.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-05-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 27.69
\nBid-YTW : 3.81 %<\/td>\n<\/tr>\n
MFC.PR.E<\/td>\nFixedReset<\/td>\n87,420<\/td>\nNesbitt crossed 20,000 at 26.60.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-10-19
\nMaturity Price : 25.00
\nEvaluated at bid price : 27.09
\nBid-YTW : 3.99 %<\/td>\n<\/tr>\n
BNA.PR.D<\/td>\nSplitShare<\/td>\n58,432<\/td>\nRecent new issue<\/a>.
\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2014-07-09
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.07
\nBid-YTW : 7.26 %<\/td>\n<\/tr>\n
TD.PR.O<\/td>\nPerpetual-Discount<\/td>\n55,862<\/td>\nNesbitt crossed 30,000 at 20.40.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2039-07-17
\nMaturity Price : 20.41
\nEvaluated at bid price : 20.41
\nBid-YTW : 5.97 %<\/td>\n<\/tr>\n
There were 48 other index-included issues trading in excess of 10,000 shares.<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

I have often noted on this blog that one problem with big banks is that there are too many layers of servile management between the people who really know what’s going on and the decision …<\/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-7293","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/7293","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=7293"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/7293\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7293"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7293"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7293"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}