-Last week Treasury yields for 10-year debt fell 20% in about six minutes. The remarkable plunge was odd. The bond market is supposed to be much more stable than the stock market. This was, according to some, a “once in a 100-year” kind of event.
-Since then market participants have been debating whether this was a result of computer trading or a consequence of the new lack of liquidity in the bond markets. Ian Russell, head of IIAC, warned a couple months ago that the new requirements on the amount of risk-free capital banks have to hold on their books was affecting liquidity in bond markets. The recent mid-morning crash of the 10-year U.S. Treasury seems to confirm that view.
-Another report out this week concerning the new Basel regulations put a number on the amount of money banks would have to raise if 16 to 20% of a bank's capital would have to be kept in the bank. To hold that kind of money on the bottom line the world's biggest banks would have to raise an amazing $870 billion. Can this even be done?
-Softer-than-expected business outside of Canada prompted TD Securities to downgrade the independent broker on Thursday. The bank lowered its rating from hold from buy and took the price target to $12.50 per share from $15.
-A report on Investmentexecutive.com suggests that since acquiring Macquarie Private Wealth last year Richardson GMP
lost 13 advisors and $1.3 billion in assets that the firm hoped to keep.
-A TD Report suggest that two-thirds of Canadians aged 40 to 64 expect to provide care for an aging parent or in-law. One in five already provides or expects to provide some financial help.
-A survey from FICO finds that the growing wealth gap poses growing risk to the financial system is a concern for more risk managers than ever. According to the survey the widening wealth gap is a concern to more than six in ten bank risk professionals. “People are trying to figure what this means for them. We've been doing this for several years. These are risk managers working in the financial services, assessing risk, and this is what they are concerned about. People can't seem to keep up in terms of inflation. I think it's important to think about this...Where am I in this wealth spectrum? Can I close this gap?” says Anthony Sprauve, FICO’s Senior Consumer Credit Specialist, in an interview with WP.
-The other worry was rising student debt. “In the past it was just a matter of getting into good school. Now it's much more complex decision to go to school. As with every financial decision, everyone needs to do their homework. I think what the survey is saying; people need to be more mindfully of every financial decision. Make those informed decisions. You can no longer just trust that it'll all work out, as was before the recession. You have to make a wise decision,” said Sprauve.
-On the Good News Beat: Canadian mid-size companies doing well. An Inaugural survey from American Express finds that Canadian mid-sized companies are optimistic. According to the survey Canadian mid-sized companies were the most likely of the seven countries surveyed to report plans to hire. “These are not that small companies, on average they have 2500 people and revenue of $161 million. These companies have not been hurt as much by the slowdown in the global economy. They're more localized. When you get 59% of companies saying they plan on hiring more employees than a year ago, these are material numbers. Some 57% of these expect their business to grow regardless of economy. They’re looking through the current volatility. I think that's an important point,” says Paul Parisi, vice president and general manager, global corporate payments, American Express Canada.