Month: August 2011

 

Dear Friends,

Tangents:

I read this essay last night and I thought it was beautiful….hope you do too…

START THE DAY WITH A MASTERPIECE

 

I woke this morning to an empty and quiet house and happily so.  My husband, an otherwise sensible man, has the regrettable habit of turning on the television each and every morning, like a moth to the flame.  But this morning the moth has gone fishing and the flame is firmly extinguished.  The resulting quiet is happy and rare.

  I go to the back door, for the purpose of retrieving the newspaper from its delivery box out at the road, and am stopped in my slippered tracks.  Beads of water cling to its screen, necklaces unstrung, locked by the screen’s grid into something like a checkerboard, if checkerboards wore jewelry.  A spider was here, its web connecting the dots of the beads of water, web and water all catching the early morning light, all shimmering, all fragile, all splendidly so.  I did nothing, I know, to deserve this caught breath and am grateful again for spiders.  One must be always grateful for spiders.

  I step out into the untelevised world, easing the screen door closed behind me, careful curator of this masterpiece that has fallen in my lap. And walk the length of the driveway.  I am still in my pajamas.  One of the privileges of being of a certain age is the wearing of disreputable pajama, which these are.  I breathe in air that is so fresh it is almost wet, air that invites wringing out.  I could wash my face in it.

  The cornfield across the road does not seem nearly so tall or so green as it ought to be, given the time of year, but I am not discouraged.  I, for one, believe the corn can still do it.  I believe there is still time.  I so not give up on the corn just as, in different circumstances, I hope the corn will not give up on me.

  In the treetops at the far side of the cornfield there are crows screaming bloody crow murder at each other.  They lift up from one treetop to settle in another, lift up and settle, lift up and settle, all the while hurling crow epithets, taking names, threatening lawsuits, swearing revenge, demanding retribution.  If crows did not invent the art of having the last word, they are among its most ecstatic practitioners.

  Beyond the crows’ treetops are banks of clouds.  These are not the giddy and frivolous clouds of summer.  These are the serious and thoughtful clouds of fall, clouds that make lists, pay their bills on time, vote in every election.  These clouds know nothing of beaches but would work for world peace if given a chance.

  I collect my newspaper and turn for home.  Dawn is just past, but no trace of it remains in the eastern sky toward which I am now walking.  No ethereal pinks.  No heavenly golds.  Only blue and plenty of it. if this blue could be contained in a paint bucket, its name would be New Day Blue and it would fly off the shelves.  We would slather every wall and every ceiling with the stuff.  There would be no stopping us.

  There are some jobs that have been done so absolutely and so correctly by others that the rest of us, the lesser and undistinguished and indistinguishable rest of us, should make no attempt.  Oscar Hammerstein said it first.  Oscar Hammerstein said it best.

  Oh, what a beautiful mornin’.  Oh, what a beautiful day.  

                                                                                         -Mary Frances

Photos of the day 

August 31, 2011

Actor George Clooney arrives on the red carpet for the premiere of his movie ‘The Ides of March’, which opens the 68th edition of the Venice Film Festival in Venice, Italy. Jonathan Short/AP.

A reveller is covered with tomato pulp after the annual ‘Tomatina’ (tomato fight) in the Mediterranean village of Bunol, near Valencia. The origin of the tomato fight is disputed, but most agree it started around 1940, in the early years of General Francisco Franco’s dictatorship. Heino Kalis/Reuters.

 

Market Commentary:

Canada

By Matt Walcoff

Aug. 31 (Bloomberg) — Canadian stocks rose for a fourth day, paring a monthly decline, as financial companies rallied after Canadian Imperial Bank of Commerce reported earnings that beat the average analyst estimate.

CIBC, Canada’s fifth-largest lender by assets, gained 3.9 percent after raising its dividend. Enbridge Inc., the country’s biggest pipeline company, advanced 1.7 percent as natural gas jumped as much as 4.1 percent. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, fell 2.3 percent as corn and wheat dropped.

The Standard & Poor’s/TSX Composite Index climbed 71.52 points, or 0.6 percent, to 12,706.23 at 2:32 p.m. in Toronto, reducing its monthly loss to 1.7 percent.

“Going into the quarter, most people were expecting the banks to disappoint,” Jeff Bradacs, a money manager at Manulife Financial Corp. in Toronto, said in a telephone interview. Bradacs’s team oversees C$1.7 billion ($1.7 billion). “The results beat consensus, but the big thing was the dividend increase.”

The stock benchmark is heading for its sixth-straight monthly drop. Energy stocks have led the retreat, tumbling 7.7 percent through yesterday as crude oil slumped on concern the global economic recovery is slowing. Energy companies make up 26 percent of Canadian stocks by market value, according to Bloomberg data.

 CIBC gained 3.9 percent to C$75.89 after its third-quarter earnings beat the average estimate of analysts in a Bloomberg survey by 5.9 percent, excluding certain items. The lender raised its quarterly dividend for the first time in four years, increasing it 3.4 percent to 90 Canadian cents a share.                    

 Toronto-Dominion Bank, which is scheduled to report quarterly financial results tomorrow, climbed 2.1 percent to C$77.02. Royal Bank of Canada, its larger domestic rival, advanced 2 percent to C$49.91.

Bank of Nova Scotia, Canada’s third-largest lender by assets, rose 1.9 percent to C$54.49 after Robert Sedran, an analyst at CIBC, boosted his rating on the shares to “sector outperformer” from “sector performer.” Scotiabank reported third-quarter earnings yesterday that beat its average analyst estimate by 2.2 percent, excluding certain items.

The S&P/TSX Energy Index reduced its largest monthly drop since December 2008 as natural gas futures gained on forecasts for above-normal temperatures in the U.S.

 Enbridge advanced 1.7 percent to C$32.34. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, increased 1 percent to C$36.73. Encana Corp., Canada’s biggest natural gas producer, climbed 1.9 percent to C$24.79.                         

 Base-metals and coal producers rose as copper futures gained after closing at a three-week high yesterday.

Teck Resources Ltd., Canada’s largest company in the industry, advanced 1 percent to C$43.59, extending its four-day surge to 11 percent. First Quantum Minerals Ltd., the country’s second-biggest publicly traded copper producer, increased 4.7 percent to C$23.65. Quadra FNX Mining Ltd., which operates in the U.S., Canada and Chile, climbed 4.6 percent to C$13.15.

Women’s clothing retailer Reitmans (Canada) Ltd. jumped 6.8 percent to C$14.93 after reporting second-quarter earnings of 48 Canadian cents a share, excluding certain items. Two analysts in a Bloomberg survey had estimated profit of 41 Canadian cents a share and 46 Canadian cents a share, respectively. Earlier today, the shares soared as much as 7.2 percent, the most intraday since May 2010.

Potash Corp. fell 2.3 percent to C$56.53 as corn futures dropped after settling at the highest since June 9 yesterday. Corn is heading for its biggest monthly surge since December 2010 on speculation hot weather will limit yields in the U.S.

Bombardier Inc., the maker of trains and airplanes, sank 6.3 percent to C$4.80 after reporting financial results for the second quarter. The company said it expects to use up all of its free cash flow this year. The stock plunged as much as 8 percent, the most intraday since November, earlier today.

US

By Rita Nazareth

Aug. 31 (Bloomberg) — U.S. stocks rose, capping the best eight-day gain since 2009 for the Standard & Poor’s 500 Index, as speculation the economy will keep expanding overshadowed a tumble in AT&T Inc. following a government antitrust lawsuit.

Ford Motor Co. and Alcoa Inc. gained at least 2.3 percent as companies most-tied to economic growth rallied. Joy Global Inc. added 1.3 percent after the maker of mining equipment forecast earnings that beat analysts’ estimates. AT&T tumbled 3.9 percent, limiting the market’s gain, as the U.S. government sued to prevent its planned purchase of T-Mobile USA Inc., saying the deal would curb competition in the wireless market.

The S&P 500 rose 0.5 percent to 1,218.89 at 4 p.m. in New York, after climbing 1.5 percent earlier. The benchmark gauge surged 8.5 percent since Aug. 19 while still completing a fourth straight monthly loss, the longest slump since March 2008. The Dow Jones Industrial Average added 53.58 points, or 0.5 percent, to 11,613.53 today, erasing its year-to-date decline.

“People want to nibble because if we avert a recession stocks would appear to be cheap,” Mark Luschini, chief investment strategist at Philadelphia-based Janney Montgomery Scott LLC, which manages $54 billion, said in a telephone interview. “At the same time, given the overall levels of volatility, you know you can wake up and the market is easy up or down 300 points. Part of that uncertainty is that investors are dealing with the heavy hand of government intervention infusing itself in the capital markets.”                         

Stocks advanced after reports showed U.S. business activity and factory orders expanded at a faster pace than economists forecast. The S&P 500 pared its August decline to 5.7 percent, still the biggest monthly retreat since May 2010. U.S. equities rose yesterday after the Federal Reserve said some policy makers wanted to take more action to stimulate the economy during their meeting this month.

“The economy is not falling off a cliff, and at the same time, policy makers are aware that growth is slow and they are prepared to do something to accelerate it,” Peter Jankovskis, who helps manage about $2.6 billion at Oakbrook Investments in Lisle, Illinois, said in a telephone interview. “Much of the selling that we’ve experienced was overdone and left the market poised for a rally when sentiment began to change.”

The S&P 500 slid 16 percent between July 22 and Aug. 19 after the U.S. government lost its AAA rating at S&P and investors speculated the European debt crisis was intensifying.

The index has rallied 8.9 percent since Aug. 8 after the S&P 500 traded at 12.2 times earnings, the lowest level since 2009, according to data compiled by Bloomberg.

Earlier today, benchmark gauges pared gains after Nouriel Roubini, co-founder and chairman of Roubini Global Economics LLC, said “we’re going into a recession based on my numbers” while the Federal Reserve and other authorities no longer have the ability to provide emergency support.

“We have reached stall speed in the economy,” Roubini said in an interview today on Bloomberg Television’s “InBusiness with Margaret Brennan.” “Unfortunately we are running out of policy tools” in the U.S. and European governments no longer have the resources to bail out their troubled banks, said Roubini, also a professor at New York University’s Stern School of Business.

This year, numbers on the economy will “come out worse and worse and worse” and the “markets are going to fizzle out,” Roubini said.

The Morgan Stanley Cyclical Index of companies whose earnings are most-dependent on economic growth rallied 0.7 percent. Ford gained 2.3 percent to $11.12. Alcoa rose the most in the Dow, gaining 3.6 percent to $12.80.

Joy Global advanced 1.3 percent to $83.45. The maker of P&H and Joy mining equipment lifted its earnings forecast in 2011 to as much as $6 a share, exceeding the average analyst estimate of $5.72, according to data compiled by Bloomberg.

AT&T slumped 3.9 percent to $28.48. The U.S. government said its purchase of T-Mobile would “substantially lessen competition” in the wireless industry. The purchase would combine the second- and fourth-largest mobile-phone carriers in the country, surpassing No. 1 Verizon Wireless. Verizon Communications Inc., which co-owns the biggest operator with Vodafone Group Plc, fell 0.4 percent to $36.17. Sprint Nextel Corp. advanced 5.9 percent to $3.76.

AT&T Chief Executive Officer Randall Stephenson’s proposed purchase of Bellevue, Washington-based T-Mobile, announced in March, would combine the second- and fourth-largest carriers to create a new market leader ahead of No. 1 Verizon Wireless. The new company would dwarf current No. 3 carrier Sprint Nextel, which argued against the deal.

Lions Gate Entertainment Corp. sank 7.5 percent to $6.96.

Billionaire Carl Icahn agreed to sell his Lions Gate shares for $7 each, roughly his cost, to end a battle for control over the independent film and television studio. The parties also agreed to end all litigation, according to a statement issued yesterday by Icahn and Lions Gate, the studio behind the “Saw” movies and “Mad Men” TV show.

Pessimism about U.S. stocks among newsletter writers increased to a one-year high, a bullish signal to analysts who track investor sentiment as a contrarian indicator of equity performance. The share of bearish publications among those tracked by Investors Intelligence rose to 36.6 percent yesterday, the highest since August 2010, from 33.3 percent a week earlier.

“The stock market is poised for a rebound if data begins to be more encouraging,” Marshall Front, who helps oversee $600 million as chairman of Front Barnett Associates LLC in Chicago, said in an interview. “Stocks have gotten to a point where they are discounting a degree of slowness in the economy that is not likely to evolve.”

Have a wonderful evening everyone.

Be magnificent!

The key to an easy relationship with other people is not to impose your ego,

nor to crush the ego of others.

 

-Swami Prajnanpad, 1891-1974

As ever,

Carolann

Turn your wounds into wisdom.

        -Oprah Winfrey, 1954- 

 

 

Dear Friends,

Tangents:

Birthday: August 30, 1797, Mary Shelley, writer.  Shelley was the authoress of Frankenstein, which she wrote at the age of 18.  She wrote six more novels in her lifetime.  She led an audacious life.  Having met Percy Bysshe Shelley at 16, they declared their love and ran away to France.  When Percy drowned while sailing, she had his heart removed before his body was cremated on the shores of Italy and she kept it with her until her death on February 1, 1851, at the age of 54.

Introduction to Frankenstein, ed.3, 1831:

“We will each write a ghost story,” said Lord Byron; and his proposition was acceded to.  There were four of us…Have you thought of a story? I was asked each morning, and each morning I was forced to reply with a mortifying negative…On the morrow I announced that I had thought of a story…At first I thought but of a few pages – of a short tale; but [Percy Bysshe] Shelley urged me to develop the idea at greater length.

Search for the stars

Turn off the porch lights Canada! 

This weekend marks the start of the best stargazing time of the year.  It’s a new moon, the Milky Way is at its prime, and heighted solar activity is adding flare to the Northern Lights.

So advised the Globe & Mail last Saturday, August 27^th, 2011.  Canadian astronomy expert and editor of SkyNews magazine Terence Dickinson shared some of his stargazing secrets.  Among them:

What advice do you have for beginners?

Check your timing – you don’t want to go anywhere between the first quarter and last quarter moon.  That’s because the moon is nice to look at, but it blocks the light of the stars.  If you really want a stargazing experience, you want to go after the last quarter through new moon to a couple of days before first quarter.  Also, solar activity is starting to ramp up and the Northern Lights and the aurora is going to get better.  The odds are it’s going to get better through 2013.  And for that, your best way of seeing the Northern Lights is to get a dog and walk it religiously the last thing you do at night.  Even if you live in the city.

TOP SITES:

SKYNEWS.CA

For weekly updates on what’s going on in the night sky, articles for amateur astronomers and upcoming coverage on dark sky parks.  Check the extensive list of clubs across Canada (under Resources) to find a contact to inquire about guided tours in destinations you plan to visit.

HEAVENS-ABOVE.COM

For predictions on satellites and iridium flares.  (You know the experience of seeing a star appear out of nowhere, only to have it diappear a few seconds later?  Dickinson explains that’s an iridium flare – the reflection off panels on communications satellites).

APOD.NASA.GOV/APOD

For a picture of the day, on a site run by two U.S. National Aeronautics and Space Administration astronomers.

Photos of the day

August 30, 2011

 

A man wades into the waves of a storm surge created by the passing of Hurricane Irene at Lawrencetown beach, Nova Scotia, Canada. Paul Darrow /Reuters

Tibetan Buddhists and tourists view a giant thangka, a religious silk embroidery or painting unique to Tibet, during the Shoton Festival at Drepung Monastery on the outskirts of Lhasa, Tibet Autonomous Region, China.  Jacky Chen/Reuters

Market Commentary:

Canada

By Matt Walcoff

Aug. 30 (Bloomberg) — Canadian stocks rose for a third day, led by precious-metals producers, as gold and silver gained after an index of U.S. consumer confidence dropped to its lowest level since April 2009.

Barrick Gold Corp., the world’s largest gold producer, advanced 1.7 percent as the metal rallied as much as 2.5 percent. Bank of Nova Scotia, Canada’s third-biggest lender by assets, climbed 2.1 percent after reporting earnings that beat the average analyst estimate. BlackBerry maker Research In Motion Ltd. increased 6.6 percent, rallying for a second day after an analyst at Macquarie Group Ltd. raised his price estimate on the shares.

The Standard & Poor’s/TSX Composite Index rose 124.54 points, or 1 percent, to 12,629.39 at 2:27 p.m. in Toronto.

Precious metal prices rallied on investor demand for a haven after the Conference Board’s index had the biggest point drop since October 2008 as the Americans’ outlooks for employment and incomes soured.

“We will know over the next three or four weeks whether we are seeing end-of-cycle indicators or whether we are going to continue a rebound,” Keith McLean, a managing partner at GMP Investment Management in Toronto, said in a telephone interview. McLean oversees C$200 million ($204 million). “People that were projecting a mid-cycle slowdown are now questioning that.”

 The S&P/TSX lost 3.4 percent this month through yesterday and is heading for its sixth-straight monthly retreat. Energy stocks in the index sank 8.6 percent, which would be their biggest monthly plunge since 2008, as crude oil tumbled on concern the global economic recovery is slowing.

 Earlier today, the European Commission said its index of executive and consumer sentiment in the 17-country euro region dropped the most since December 2008.

The S&P/TSX Gold Index extended what would be its biggest monthly rally since August 2010. Barrick gained 1.7 percent to C$49.84. Goldcorp Inc., the world’s second-largest gold producer by market value, advanced 1.3 percent to C$50.94. Romarco Minerals Inc., which is developing a gold project in South Carolina, surged 9.7 percent to C$1.47.

Silver Wheaton Corp., Canada’s fourth-biggest precious- metals company by market value, increased 2.5 percent to C$38.84 as silver surged as much as 2.8 percent. Silvercorp Metals Inc., which operates in China, jumped 9 percent to C$8.60.

Scotiabank increased 2.1 percent to C$53.43 after its third-quarter profit surpassed the average estimate in a Bloomberg survey by 2.2 percent, excluding certain items. National Bank of Canada, the country’s sixth-biggest lender by assets, climbed 1.4 percent to C$71.59.

RIM gained 6.6 percent to C$31.96, extending its August surge to 33 percent. The company is heading for its biggest monthly advance since April 2009 as analysts including Kevin Smithen of Macquarie and Shaw Wu of Sterne, Agee & Leach Inc. have said that its new smartphones may help stop the long-term decline in its share price. Shares of the Waterloo, Ontario- based company remain down 45 percent on the year.

Energy stocks advanced as crude oil futures increased as much as 2.2 percent. Cenovus Energy Inc., Canada’s fifth-largest energy company, climbed 2.3 percent to C$34.66. Suncor Energy Inc., the country’s biggest oil and gas producer, rose 1.1 percent to C$30.89.

 Americas Petrogas Inc., which explores for oil and gas in Argentina, soared 22 percent to C$2.08 after agreeing to form a joint venture with Exxon Mobil Corp. Exxon Mobil will help fund the Los Toldos shale-oil and gas project. Earlier today, shares of the Calgary-based company jumped as much as 39 percent, the most since December 2008.

Teck Resources Ltd., Canada’s largest base-metals and coal producer, increased 3.1 percent to C$42.94 as copper advanced to a three-week high.

Bombardier Inc., the maker of trains and airplanes, rallied 5.7 percent to C$5.21. The company is scheduled to report second-quarter financial results before markets open tomorrow.

Alimentation Couche-Tard Inc., the owner of Mac’s and Circle K convenience stores, sank 5.9 percent, the most intraday since March 2010, to C$27.97. The company’s first-quarter earnings trailed the average analyst estimate in a Bloomberg survey by 4.8 percent, excluding certain items.

US

By Rita Nazareth

Aug. 30 (Bloomberg) — U.S. stocks rose, rebounding from a 1.2 percent drop in the Standard & Poor’s 500 Index, after the Federal Reserve said some policy makers wanted to take more action to stimulate the economy during their meeting this month.

Boeing Co. and Caterpillar Inc. rose at least 1.9 percent, pacing gains among companies most-tied to the economy. Monster Worldwide Inc., the provider of help-wanted ads, advanced 21 percent, building on its 13 percent rally during the past two days. Bank of America Corp. fell 3.2 percent as the Federal Deposit Insurance Corp. objected to the lender’s proposed $8.5 billion mortgage-bond settlement with investors.

The S&P 500 added 0.2 percent to 1,212.92 at 4 p.m. in New York, recovering from earlier losses driven by consumer confidence sinking to a 28-month low. The Dow Jones Industrial Average rose 20.70 points, or 0.2 percent, to 11,559.95.

“The Fed has definitely not raised the white flag,” Bruce McCain, who helps oversee $22 billion as chief investment strategist at the private-banking unit of KeyCorp in Cleveland, said in a telephone interview. “They have not accepted the idea that they ran out of tools. They recognize that the economy is far too weak and that they will do whatever is necessary to boost growth. It’s reassuring.”

The S&P 500 rose to the highest level since Aug. 3 yesterday after surging 7.7 percent in six days. Equities gained 8.1 percent between Aug. 8 and yesterday after the loss of the U.S. government’s AAA credit rating left the S&P 500 trading for 12.2 times earnings, the lowest level since 2009, according to data compiled by Bloomberg.                  

When Fed policy makers met on Aug. 9, the S&P 500 had plunged 17 percent since July 22, including a 6.7 percent drop the previous day that was the biggest slump since 2008. The Fed said those members, who weren’t identified, “felt that recent economic developments justified a more substantial move” beyond the pledge adopted at the Aug. 9 meeting of the Federal Open Market Committee to hold its key interest rate at a record low until mid-2013.

The report indicates that Fed officials will more fully debate their options when they meet next month for a two-day meeting that was originally scheduled to last one day. Fed officials at the August meeting discussed a range of tools, including buying more government bonds, to bolster the economy.

They didn’t come to an agreement on what the Fed’s next step might be should the economy continue to weaken.

The S&P 500 slumped earlier today after the Conference Board’s index of consumer confidence fell to 44.5, the lowest level since April 2009, from a revised 59.2 reading in July, the research group said. It was the biggest point drop since October 2008. Economists predicted the gauge would fall to 52, according to the median forecast in a Bloomberg News survey.

 “The consumer sentiment number was so low that it could have marked a bottom,” Mark Bronzo, who helps manage $26 billion at Security Global Investors in Irvington, New York, said in a telephone interview. “The market has sold off so violently, and right now the selling pressure is drying up.”

The S&P 500 has fallen 6.1 percent since the end of July and was headed for its fourth straight monthly decline, the longest streak since March 2008. Financial, energy and industrial shares had the biggest losses during so far in August, slumping at least 7.4 percent.

The Morgan Stanley Cyclical Index of companies most-tied to economic growth added 0.4 percent after sinking 1.4 percent. Boeing gained 2.2 percent to $66.03. Caterpillar rose 1.9 percent to $89.83.                    

Monster Worldwide surged 21 percent, the most in the S&P 500, to $9.91. Three top executives led by Chairman and Chief Executive Officer Salvatore Iannuzzi bought 87,237 shares, regulatory filings showed today.

The shares were “overdue for a bounce” after other Internet companies including professional-networking firm LinkedIn Corp. have surged in recent weeks, said Douglas Arthur, an analyst at Evercore Partners Inc. in New York who rates the stock as “equalweight.”

Clorox Co. rallied 2.8 percent to $70.52. Billionaire investor Carl Icahn said today he’d buy Clorox Co. for $10.3 billion if a companion proposal to elect his slate of directors and sell the company fails.

The KBW Bank Index of 24 stocks fell 1 percent, snapping a two-day rally. Bank of America slumped 3.2 percent to $8.12. The FDIC, the receiver for failed banks, owns securities covered by the settlement and said it doesn’t have enough information to evaluate the accord, according to a filing yesterday in federal court in Manhattan.                       

Bearish bets by hedge funds on S&P 500 futures increased to the highest level since before the financial crisis three years ago, Bank of America Corp.’s Mary Ann Bartels said.

“Readings are a ‘crowded short’ for the first time since June 2008,” Bartels, the New York-based head of technical and market analysis at Bank of America, wrote in a note yesterday.

Large speculators boosted net wagers that the benchmark index of U.S. equities will fall to $24.6 billion in the week ended Aug. 23 from $21.5 billion a week earlier, said Bartels, citing data from the Commodity Futures Trading Commission.

Bartels said she considers short positions to be “crowded” at about $25 billion. The last “crowded short zone” on S&P 500 futures came three months before Lehman Brothers Holdings Inc.’s collapse spurred a 46 percent plunge in equities.

Have a wonderful evening everyone.

Be magnificent!

At one pole of my existence,

I am one with the stones and the tree branches.

Thus, I must submit to the yoke of universal law.

It is this, in the end, that is the very basis of my life.

And that force comes from that which is closely bound up in the unity of the world,

which is in full communication with all things.

But at the other pole, I am distinct from all of the rest.

Here, I have broken the barriers of equality

and I find myself alone, as an individual.

I am absolutely unique, I am me, I am incomparable.
the whole of the mass of the universe can not crush this individuality that is mine.

I maintain it, despite the formidable gravitation of all that exists.

It is small in appearance, but great in reality.

 

-Rabindranath Tagore, 1861-1901

As ever,

Carolann

Getting ahead in a difficult profession requires avid faith

in yourself.  That is why some people with mediocre talent,

but with great inner drive, go much further than people

with vastly superior talent.

              -Sophia Loren, 1934- 

 

Dear Friends,

Tangents:

Birthday: John Locke, philosopher, born August 29^th, 1632.

The actions of men are the best interpreters of their thoughts.

                                                  -John Locke, 1632-1704

 

Yesterday, we went to the exhibit at the Vancouver Art Gallery, The Colour of My Dreams,  The Surrealist Revolution in Art.  It is on until September 25^th, 2011.  There are some important pieces from surrealists such as Salvador Darli, Joan Miró, Alberto Giacometti, Max Ernst, Man Ray, René Magritte, André Bretton and others.  It is being billed as the most comprehensive exhibition of surrealist art ever presented in Canada.  Worth seeing if you have a chance. 

We were at the Santana concert on Saturday night and it was just an amazing concert …I know many people from Victoria were there and I’d love to hear your comments.   Almost everyone was standing for the full concert – it was impossible to sit down.  The opening act was Michael Franti & Spearhead.  Gary and I hadn’t heard them before but one of our friends who was with us had heard them in San Francisco where they hail from and assured us we’d be impressed – we were.

The CEO of Starbucks said that President Obama shouldn’t be vacationing during a crisis, and that he

should be getting Americans back to work, so they can afford a $9 cup of coffee.

– Conan O’Brien

 

Photos of the day 

August 29, 2011

Boys run their horse through the streets during the Ould Lammas Fair in Ballycastle in the Glens of Antrim, Northern Ireland. The event is one of the oldest fairs in Ireland and has been held without interruption for more than three centuries. Cathal McNaughton/Reuters

A performer dances in the street parade at the annual Notting Hill Carnival in central London. The annual carnival is a celebration of Caribbean culture that usually draws about 1 million people for a colorful procession of musicians and performers. Olivia Harris/Reuters.

Market Commentary:

Canada

By Matt Walcoff

Aug. 29 (Bloomberg) — Canadian stocks rose for a second day, led by energy and financial companies, after the U.S. reported a bigger increase in consumer spending then most economists had forecast.

Canadian Natural Resources Ltd., Canada’s second-largest energy company by market value, gained 3.5 percent as crude futures advanced 2.2 percent. Bank of Nova Scotia, the country’s third-biggest lender by assets, climbed 2 percent after the U.S. consumer-spending figure for July surpassed 73 of 74 economist forecasts in a Bloomberg survey. Northgate Minerals Corp., which mines gold in Australia, soared 28 percent after agreeing to be bought by AuRico Gold Inc.

The Standard & Poor’s/TSX Composite Index rose 177.34 points, or 1.4 percent, to 12,504.85.

“The market is figuring in a 40 percent chance of a double-dip recession,” Sebastian van Berkom, a money manager at Van Berkom & Associates in Montreal, said in a telephone interview. The firm oversees C$1.6 billion ($1.6 billion). “Any kind of clues that maybe that’s not going to happen is going to help.”

The stock benchmark has slipped 3.4 percent this month and is heading for its sixth-straight monthly decline. Energy stocks have led the retreat as oil futures have tumbled 8.6 percent with economic data signaling a slowing recovery. The industry accounts for 26 percent of Canadian stocks by market value, according to Bloomberg data.

U.S. consumer purchases increased 0.8 percent last month, the Commerce Department said today in Washington. Economists had forecast a gain of 0.5 percent, according to the median estimate in a Bloomberg survey.

 Oil futures advanced to the highest settlement since Aug.17. Suncor Energy Inc., Canada’s largest oil and gas producer, climbed 2.6 percent to C$30.56. Canadian Natural rose 3.5 percent to C$36.05. Bankers Petroleum Ltd., which operates in Albania, surged 8 percent to C$5.02, a sixth-straight gain.

All S&P/TSX banks and insurers advanced. Scotiabank increased 2 percent to C$52.35. Toronto-Dominion Bank, Canada’s second-largest lender by assets, climbed 1.3 percent to C$74.88.

Manulife Financial Corp., North America’s fourth-biggest insurer, rallied 4.6 percent to C$13.29 after Hurricane Irene did less damage than Kinetic Analysis Corp., a firm that predicts the effects of disasters, had forecast.

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, rose 2.2 percent to C$57.37 as corn reached an 11-week high. Agricultural futures have advanced as hot weather threatened yields in the U.S. Midwest.

Northgate jumped 28 percent, the most since December 2008, to C$3.98 after agreeing to be bought by AuRico for C$1.46 billion.                       

AuRico, the gold producer formerly known as Gammon Gold Inc., slumped 19 percent, the most since January 2002, to C$11.05. Precious-metals producer Primero Mining Corp. sank 16 percent to C$3.47 as Northgate scrapped its C$370 million deal to buy the company.

Other precious-metals stocks fell as gold futures dropped 0.3 percent. Barrick Gold Corp., the world’s largest producer of the metal, decreased 1.9 percent to C$49. Goldcorp Inc., the world’s second-biggest company in the industry by market value, declined 1.3 percent to C$50.30. Silver Wheaton Corp., Canada’s fourth-largest precious-metals company by market value, lost 2.3 percent to C$37.91.

Base-metals and coal producers climbed. Teck Resources Ltd., Canada’s largest company in the industry, increased 2.6 percent to C$41.65. Lundin Mining Corp., which produces base metals in Europe, surged 9.9 percent to C$5.66. First Quantum Minerals Ltd., Canada’s second-biggest publicly traded copper producer, gained 5.5 percent to C$22.49.                          

An index of S&P/TSX consumer-discretionary stocks rallied 2.1 percent. Magna International Inc., Canada’s largest auto- parts maker, advanced 4.4 percent to C$37.20 after the U.S. consumer-spending data reflected gains in vehicle sales. Imax Corp., the maker of giant-screen movie-projection systems, jumped 8.8 percent to C$17.24. Yoga-wear retailer Lululemon Athletica Inc. rose 5 percent to C$53.96.

Uranium producer Denison Mines Corp. soared 10 percent to C$1.64, extending its two-day gain to 19 percent. Cameco Corp., the world’s largest producer of the nuclear fuel, offered to buy Hathor Exploration Ltd. for C$520 million on Aug. 26.

BlackBerry maker Research In Motion Ltd. rallied 4.6 percent to C$29.98 to extend its surge since Aug. 8 to 37 percent. Kevin Smithen, an analyst at Macquarie Group Ltd., raised his 12-month price estimate on RIM’s U.S.-traded shares to $42 from $40, citing international growth and new smartphones in a note to clients.

US

By Rita Nazareth

Aug. 29 (Bloomberg) — U.S. stocks rose, sending the Standard & Poor’s 500 Index to the highest level in almost a month, amid optimism the economy will recover and after Hurricane Irene failed to shut financial markets.

Only three stocks in the benchmark gauge declined today as all of its 10 groups advanced. The S&P 500 Insurance Index of 22 stocks rallied 4.8 percent as Hurricane Irene’s estimated cost declined with the storm losing strength en route to New York.

Bank of America Corp. rose 8.1 percent after agreeing to sell about half its stake in China Construction Bank Corp. in a deal generating $8.3 billion in cash proceeds.

The S&P 500 rose 2.8 percent to 1,210.08 at 4 p.m. in New York, the highest level since Aug. 3. The Dow Jones Industrial Average gained 254.71 points, or 2.3 percent, to 11,539.25, paring this year’s drop to 0.3 percent. About 6.6 billion shares changed hands on U.S. exchanges at 4:10 p.m., 21 percent below the three-month average, data compiled by Bloomberg show.

“I still do not buy into the recession,” Jeffrey Saut, chief investment strategist at Raymond James & Associates in St. Petersburg, Florida, said in a telephone interview. His firm manages $278 billion. “There’s no way the U.S. is going into a recession. Pessimism can’t get much worse than it’s been. Is growth going to be slow? Yes. But if we avoid a recession, stocks are pretty attractive.”

The S&P 500 has fallen as much as 18 percent from a three- year high on April 29 amid concern about a global economic slowdown. Gauges of financial, industrial and energy shares, which are most-tied to the economy, led the declines in the index, slumping at least 22 percent over that period.                      

Equities climbed today after Americans’ spending increased more than economists forecast while incomes grew at the projected pace. Benchmark gauges also rose as two Greek banks, EFG Eurobank Ergasias SA and Alpha Bank SA, discussed merging. Equities in Greece rallied the most in more than 20 years.

Stocks rose even after a report showed that the number of contracts to purchase previously owned U.S. homes fell in July for the first time in three months, a sign that lower prices and borrowing costs aren’t luring in buyers.

Investors are paying less for equities than they have during every recession since Ronald Reagan was president amid growing concern that the economy is on the edge of another recession. The S&P 500 has lost 13 percent in the past five weeks, sending its price-earnings ratio down to 12.9. That’s 3.5 percent less than the average multiple during the 10 contractions since 1949 and a level last reached in 1982, according to data compiled by Bloomberg.                  

Stocks dropped and then rebounded on Aug. 26 after Federal Reserve Chairman Ben S. Bernanke ‘s speech in Jackson Hole, Wyoming, in which he said the central bank still has tools to stimulate the economy without signaling he will use them. He echoed comments from dissenting members of the Federal Open Market Committee who said data aren’t pointing to a recession.

“Some positive thinking here has some value — to at least making investors think twice before they dump stocks,” Madelynn Matlock, who helps oversee $14.8 billion at Huntington Asset Advisors in Cincinnati, said in a telephone interview. “Central bankers don’t think there’s any really immediate screaming problem to deal with and have taken that more positively. Plus, there’s the fact that valuation is a whole lot better than it was a couple of months ago. In addition, the absence of any bad news in Europe is good news.”                       

All 10 groups in the S&P 500 rose between 1.2 percent and 4.2 percent, with gains being led by financial and industrial stocks. The Morgan Stanley Cyclical Index of companies most- dependent on economic growth added 4.3 percent.

Insurers jumped. Hartford Financial Services Group Inc. added 13 percent to $19.42, while Travelers Cos. increased 5.1 percent to $50.75.

Hurricane Irene’s estimated cost to insurers fell to about $2.6 billion, according to Kinetic Analysis Corp. That compares with a projection last week from the Silver Spring, Maryland- based company of as much as $14 billion when Irene was forecast to make landfall in New York as a Category 2 hurricane. Total economic losses, including those that aren’t insured, may be about $7 billion.

 Bank of America gained 8.1 percent to $8.39. The bank will sell 13.1 billion shares in a private transaction with a group of investors, the Charlotte, North Carolina-based company said today in a statement.

The KBW Bank Index added 4.5 percent as all of its 24 stocks gained. JPMorgan Chase & Co. advanced 4 percent to $37.64. Citigroup Inc. added 4.9 percent to $31.29.                      

Pfizer Inc. added 3.7 percent to $18.88. The drugmaker won U.S. approval to sell a drug to treat lung cancer. The treatment, crizotinib, is the leading candidate among more than 20 tumor-fighting medicines the company is developing to help replace sales expected to be lost to generic drugs.

Monsanto Co. slumped 1.3 percent to $69.78. The world’s biggest seed company said 100,000 acres of corn in Iowa and Nebraska may harbor rootworms that developed resistance to the company’s insect-killing biotechnology.

Newmont Mining Corp., the largest U.S. gold producer, and Home Depot Inc., the largest U.S. home improvement retailer, fell less than 0.1 percent.

Have a wonderful evening everyone.

Be magnificent!

I believe in the absolute oneness of God, and therefore, humanity.

What though we have many bodies?  We have but one soul.

The rays of sun are many through refraction.

But they have the same source.

I cannot, therefore, detach myself from the wickedest soul

nor may I be denied identity with the most virtuous.

 

-Mahatma Gandhi, 1869-1948

As ever,

Carolann

The past is not dead.  In fact,

it’s not even past.

   -William Faulkner, 1897-1962 

 

Dear Friends,

Tangents:

 

August 28^th: Writer Johann W. von Goethe’s birthday.

Whatever you can do or dream you can, begin it. 

Boldness has genius, power and magic in it.

Knowing is not enough; we must apply. 

Willing is not enough; we must do.

                    -Goethe, 1749-1832

                         

Jackie Wullschlager visits a private collection so fine that it makes Aix-en-Provence a place of cultural pilgrimage

By Jackie Wullschlager, FT, August 26^th, 2011.

 

‘Composition avec des lettres’ (1919) by Fernand Léger

No landscape anywhere is more associated with an artist than the few miles around Aix-en-Provence that take in Cézanne’s Mont St Victoire, Bibemus quarry, chestnut tree park the Jas de Bouffan and the Mediterranean at L’Estaque. In Cézanne’s day, “the vibrations felt from this good sun of Provence … the limitless things in nature … these ineffable contours that leave us with so many profound impressions” were a world away from the Paris of his contemporaries, who considered him a clumsy recluse. Now Aix, a handsomely preserved 17th-century town of broad avenues lined with plane trees and bourgeois mansions, is just three hours from Paris by TGV and its Musée Granet – following restoration begun in 1990 and several bequests and major exhibitions – has become a site of cultural pilgrimage.

The newest, most eccentric and provocative gift, deposited here last year, is on show this summer in the The Planque Collection: The Example of Cézanne: selections from the 300 works assembled by Swiss maverick Jean Planque, who died in a car crash in 1998. Although international in scope – it includes a tumultuous scarlet Van Gogh, which Planque discovered hanging in the barely lit bathroom of a dowdy Basel flat; subtle abstract gouaches by Paul Klee; and works heralding the contemporary scene, such as a 1960 black sand and oil canvas by Antoni Tàpies – the collection has ended up here because Planque’s overriding interest was the legacy in France of the master of Aix.

A fragile, intense yet discreet personality, Planque began his career as a salesman for cattle supplies but from his youth was obsessed with Cézanne. In 1945 he invented a revolutionary concentrate to feed pigs and retired on the proceeds to a cottage at the foot of Mont St Victoire to learn to paint like his idol. He failed, and after a decade changed tack: joining Ernst Beyeler’s new Basel gallery, he acquired “the pictures he aspired to paint”, particularly works echoing Cézanne’s solidity of pictorial language, combined with flamboyant materiality.

The result is not only an exemplary individual and coherent collection but one which, in its strengths and weaknesses, marvellously and poignantly embodies the power, then the collapse, of French painting between 1900 and 1970.

Cézanne’s work was mostly beyond Planque’s means, though he bought in 1947 the airy late watercolours – “Environs d’Aix”, “La Montagne St Victoire vue des Lauves” – that open this show and never look better than when seen in the light of Aix itself. Long into the 20th century they were undervalued: “Surtout n’achetez pas ça, il n’y a rien dessus” (“Do not buy it, there is nothing there”), a connoisseur told Planque as he leafed through folios containing these sheets. But it was precisely the rien – the transparency, sense of weightlessness and even distance, as the motifs are skimmed with terrific economy in semi-abstract marks – that attracted Planque.

He was a collector who thought for himself and demanded emotional resonance from each work. He favoured late Bonnard, for instance, for the dissolution of form – the sunflower-yellow “L’Escalier du Cannet” (1946), with the tiny figure of a boy with a dog, reminded Planque of the “paradis terrestre” of his own rural childhood. He was as decisive for early Braque, notably the darting letters and shapes of the cream-grey oval “Souvenir du Havre” (1912), which he reckoned more lively than the serene perfection of the artist’s mature period.

‘Finlandaise’ (1907) by Sonia Delaunay

Cubism’s debt to Cézanne’s cylinders, spheres and cones made the first years of the movement an obvious attraction but even here Planque sought the eclectic: a rare abstracted view of “L’Estaque” from Raoul Dufy’s brief Cézanne period in 1908; the lyrical geometric constructions of Roger de la Fresnaye’s double-sided “Le Port de Meulan” (1911-12); the sober collage “Guitare” (1917) by sculptor Henri Laurens. A special place was accorded to Fernand Léger’s graphically precise, mechanistic yet subtle “La Rose et le compas” (1924): its meditation on the tension between natural grace and ordered beauty expressed Planque’s ideal of painting.

Then, in the early 1960s, two meetings shaped Planque’s future: with Dubuffet – monumental cartoonish works such as the three-metre “Continuum de ville” and “Légende de la rue” dominate the Granet’s upstairs galleries – and with 80-year-old Picasso, whose appropriation of graffiti styles as shown here vibrantly outstrips the work of the younger artist.

Desperate, like many Europeans, to believe in the continuing potency of postwar French art, Planque amassed a horde of abstract canvases from the 1950s – Roger Bissière, Nicholas de Staël, Raoul Ubac – which attempt to uphold the taut harmonising values of Cézanne and Léger but today look weary, overburdened by history, lacklustre compared with American compositions of the time.

Quickly a trusted confidant, Planque had first pick of the works of both artists through the 1960s. Dubuffet shown at this stretch is repetitive and formulaic but the late Picassos are the jewels in Planque’s crown, closing the circle between Cézanne and modernity that the collector spent a lifetime exploring. The lipstick-pink “Buste de femme endormie” (1970) turns Jacqueline Picasso’s strong features, cupped breasts and enormous hands inside out into a post-cubist parody of a sleeping nude – one exhausted, her expression suggests, by devotion to her elderly, demanding husband. The harsh, dark, unusual landscape “Marine” (1967) was identified at once by Planque as “the river we’ll all have to cross”; although Picasso snapped back “Don’t ever talk of that, Planque”, he sold him the painting.

Soon afterwards Planque’s wife Suzanne died and he acquired the ghoulish but unusually – for Picasso – tender grisaille portrait of a skull-like couple “Homme et femme. Tête” (1969) as a commemoration. It hangs here alongside the piece he called the “nail” of his collection, “Femme au chat assise dans un fauteuil” (1964): a black-green portrait of Jacqueline, her body thinned almost to vanishing point, one giant hand gripping a kitten whose liveliness seems a reproach to the deathly menace of her eyes and stern, flattened features. Planque was so affected by this sombre work that he sometimes turned it to the wall in fear. On the morning of Picasso’s death, he claimed, the canvas detached itself from its nail and slipped to the floor, as if it had a life of its own.

Like many good private collections, this one is animated by Planque’s near-religious belief in the power of pictures. The 17th-century chapel adjacent to the Granet that is being restored as a permanent home for his entire collection will be wonderfully fitting and, when it opens in 2013, a highlight of the Aix-Marseilles region’s year as European cultural capital. By Jackie Wullschlager

‘Collection Planque, L’Exemple de Cézanne’, Musée Granet, Aix-en-Provence, to November 6

www.museegranet-aixenprovence.fr

Photo of the day

August 26, 2011

The Colombian Navy’s training ship Arc Gloria sails through Tower Bridge on the River Thames in London. One of the biggest tall ships in the world that is still in service, the ship is on a three-day visit to London. Kirsty Wigglesworth/AP.

Market Commentary:

Canada

By Matt Walcoff

Aug. 26 (Bloomberg) — Canadian stocks rose, extending a weekly gain, as producers of precious metals and fertilizers advanced after corn and gold futures surged.

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, increased 3.9 percent as corn rallied on signs dry weather is reducing U.S. yields.

Goldcorp Inc., the world’s second-largest gold producer by market value, climbed 2 percent as the metal rallied 1.8 percent. Canadian Natural Resources Ltd., Canada’s second- largest energy company by market value, rose 1.3 percent as natural gas futures gained.

The Standard & Poor’s/TSX Composite Index climbed 43.2 points, or 0.4 percent, to 12,327.51, completing a weekly increase of 2.7 percent, after U.S. Federal Reserve Chairman Ben S. Bernanke indicated the economy isn’t deteriorating fast enough to warrant any immediate stimulus. He said the central bank still has tools to stimulate the economy without signaling he will use them.

     “The market is happy because the Fed is on the case,”

Marcus Xu, director of equity investments at Genus Capital Management in Vancouver, said in a telephone interview. The firm oversees C$1.7 billion ($1.7 billion). “They said, ‘We have a lot of other things we can do.’”

The S&P/TSX has lost 4.8 percent this month, less than half as much as the MSCI World Index, as its gold stocks have rallied 11 percent while its energy companies have plunged 11 percent.

Gold climbed to a record and crude oil sank to a 2011 low earlier this month as economic data signaled a slowing U.S. recovery.

Fertilizer producers advanced as corn futures surged to the highest since June 9. The hottest summer since 1955 in Iowa and Illinois has hurt crops, and the government may have to cut its harvest forecasts, according to a Bloomberg News survey of 25 analysts who traveled through seven states this week on a crop tour organized by the Professional Farmers of America. The group’s estimate for the harvest, based on the tour’s findings, was 3.3 percent below the U.S. Department of Agriculture’s forecast.

Potash Corp. increased 3.9 percent to C$56.15. Agrium Inc., a fertilizer producer and farm retailer, climbed 3 percent to C$81.93.

Thirty-one of 37 S&P/TSX gold stocks rose after Bernanke’s remarks to a forum in Jackson Hole, Wyoming. Goldcorp gained 1.8 percent to C$50.98. Barrick Gold Corp., the world’s largest producer, advanced 1.4 percent to C$50.06. China Gold International Resources Corp. jumped for a second day after reporting a resources increase, surging 6.3 percent to C$4.70.

Natural gas futures climbed for a second day as meteorologists forecast hotter weather for much of the U.S. Canadian Natural rose 1.3 percent to C$34.84. Nexen Inc., an oil and gas producer with operations on five continents, gained 1.7 percent to C$19.96.

Trilogy Energy Corp., a western Canadian natural gas and oil producer, soared 9.9 percent to C$26.09 on the last day of trading when buyers are entitled to its next quarterly dividend.

A parcel of land near Trilogy’s Kaybob operations sold for a record price Aug. 24, the Calgary Herald reported.

Teck Resources Ltd., Canada’s largest base-metals and coal producer, rose 3 percent to C$40.61 as copper futures gained for a fourth day.

 Taseko Mines Ltd., which mines copper in British Columbia, surged 17 percent, the most since January, to C$3.79 after saying the Canadian Environmental Assessment Agency has accepted its project description for its New Prosperity project. The shares had closed at the lowest since November 2009 yesterday.                        

Hathor Exploration Ltd., which explores for uranium in Saskatchewan, soared 45 percent, the most since March 2008, to C$3.88 after Cameco Corp. offered to buy the company for C$3.75 a share. Cameco slipped 0.7 percent to C$21.87.

Canada’s seven largest banks fell after Royal Bank of Canada, the biggest, reported third-quarter earnings that trailed the average analyst estimate in a Bloomberg survey, excluding certain items.

Royal Bank, Canada’s largest company by market value, dropped 3.5 percent, the most since December, to C$49 after missing its average analyst profit estimate for the sixth time in the last seven quarters. Toronto-Dominion Bank, Royal Bank’s biggest domestic rival, declined 1.1 percent to C$73.90. Bank of Nova Scotia, the third-largest lender by assets, lost 1.6 percent to C$51.34.

Trading in Sino-Forest Corp., the forestry company fighting a short seller’s assertions of financial manipulation, was halted today by the Ontario Securities Commission. The regulator said Sino-Forest and some of its officers and directors “appear to have misrepresented some of its revenue and/or exaggerated some of its timber holdings.” U.S. shares of Sino-Forest plunged a record 72 percent to $1.38.

US

By Nick Baker and Rita Nazareth

Aug. 26 (Bloomberg) — U.S. stocks surged, breaking a four- week losing streak for the Standard & Poor’s 500 Index, as Federal Reserve Chairman Ben S. Bernanke indicated the economy isn’t deteriorating enough to warrant any immediate stimulus.

Treasuries trimmed gains and the dollar swung to a loss.

The S&P 500 added 1.5 percent to 1,176.80 at 4 p.m. in New York after losing as much as 2 percent. The Stoxx Europe 600 Index lost 0.7 percent, trimming its retreat from 2.7 percent.

Yields on Treasury 10-year notes slipped four basis points to 2.19 percent after decreasing 11 points. The Dollar Index lost 0.7 percent after climbing 0.3 percent. Crude added 0.1 percent following a 2.8 percent retreat.

Markets gyrated following the Bernanke speech, in which he said the central bank still has tools to stimulate the economy without signaling he will use them. He echoed comments from dissenting members of the Federal Open Market Committee who said data aren’t pointing to a recession. Investors piled into U.S. equities trading at the cheapest valuations since 2009.

“If they can stick to this and let the market find its own bottom, they will come out of this stronger,” James Paulsen, chief investment strategist at Minneapolis-based Wells Capital Management, which oversees about $340 billion, said in a telephone interview. “People will start to develop some confidence that this thing can recover on its own without Fed assistance.”

Stocks initially fell after Bernanke announced no new plan to stimulate growth. He foreshadowed a $600 billion bond- purchase program a year ago at the same event in Jackson Hole, Wyoming, helping to stoke a 30 percent surge in the S&P 500 through April 29. The measure has retreated more than 15 percent since that peak amid concern the economy is stalling.

 Bernanke said a second day has been added to the next Federal Open Market Committee meeting in September to “allow a fuller discussion” of the economy and the Fed’s possible response. He didn’t close the door in today’s speech to options he has previously discussed, including a third round of government bond buying.

“The one bombshell in the speech is that he did say the September meeting is going to be a two-day meeting, which has two implications,” John Canally, who helps oversee $340.8 billion as an economist and investment strategist at LPL Financial Corp., said in a telephone interview from Boston.

“One, it may mean they’re going to spend more time further refining the tool they’ve already outlined. Or it means they have time to talk about something they haven’t done.”

The Commerce Department said today that U.S. gross domestic product expanded at a 1 percent annual rate in the second quarter, less than the median economist forecast, which called for a 1.1 percent expansion.

“Although important problems certainly exist, the growth fundamentals of the United States do not appear to have been permanently altered by the shocks of the past four years,” Bernanke said in prepared comments. “It may take some time, but we can reasonably expect to see a return to growth rates and employment levels consistent with those underlying fundamentals.”

This year’s decline in the S&P 500 left the benchmark gauge for American equities trading at 12.7 times reported earnings as of yesterday, more than 20 percent below its five-decade average. Barton Biggs, founder of hedge fund Traxis Partners LP, said last week that valuations are so low they could withstand a 15 percent decline in profits.                      

Earnings for companies in the index may rise 18 percent this year, according to the average estimate of analysts surveyed by Bloomberg. Economists predict gross domestic product will expand 1.75 percent this year and 2.35 percent in 2012, according to a survey of 56 respondents conducted by Bloomberg.

Threats facing the economy aren’t as grave as they were when Bernanke pledged new stimulus at Jackson Hole in August 2010, according to Russ Koesterich, the San Francisco-based global chief investment strategist for the IShares unit of BlackRock Inc. Solutions such as the so-called quantitative easing program to purchase Treasury notes may be less effective now, said Koesterich, whose firm oversees $3.66 trillion.

“This is pretty much what we expected,” he said. “The economic data points are likely going to continue to be weak, but the market already knows that. If you have period when economic data is poor, but not as bad as people expect, you can actually see some relief in the market.”                     

Rising consumer prices and signs the economy is still growing may be restricting Bernanke’s options. Gasoline costs are about 30 percent higher, consumer inflation is twice as fast and inflation expectations are above levels since Bernanke signaled more easing a year ago. While the U.S. expansion has slowed, the Chicago Fed’s index of 85 economic indicators improved in July for a third month on gains in production.

The threat of deflation has subsided, with the Labor Department’s consumer price index, minus food and energy, rising 1.8 percent for the 12 months ending July. It increased at a 0.9 percent 12-month rate in July 2010 before Bernanke’s Jackson Hole speech last year.

A measure of inflation expectations watched by the Fed is showing that traders see annual price increases of 2.77 percent starting in five years, compared with 2.22 percent a year ago.

Fed bank presidents Charles Plosser of Philadelphia, Richard Fisher of Dallas and Narayana Kocherlakota of Minneapolis voted against the Fed’s decision to keep the target for the federal funds rate at zero to 0.25 percent until at least mid-2013. Plosser and Fisher said last week the pledge won’t help spur growth. The last time three policy makers dissented was in November 1992.

“Our problems are not problems easily addressed by monetary policy,” Plosser said in an Aug. 17 interview, adding that the Fed is “risking its credibility because it’s doing things that don’t work.”

Policy makers this month pledged to keep their benchmark interest rate near zero until at least mid-2013 and said they “discussed the range of policy tools” available, signaling they may add to their record stimulus.

Bernanke told Congress on July 13 the Fed has stimulus options. They may include buying additional securities, increasing the average maturity of its bond portfolio, lowering the interest rate on excess reserves and pledging to keep its balance sheet near a record high for a longer period of time.

Morgan Stanley analysts have cut their estimate for expansion worldwide this year to 3.9 percent from a previous prediction of 4.2 percent. Part of the reason was “the drama” around lifting the U.S. debt ceiling, which helped depress financial markets and erode business and consumer confidence, the analysts said in a report last week.

President Barack Obama signed a plan to raise the federal debt limit on Aug. 2, the deadline to avoid a possible default, after months of wrangling with Congress. The deal would make $2.4 trillion in deficit cuts over 10 years.

Treasury yields fell today as Bernanke refrained from endorsing the immediate use of additional stimulus measures. The yield on the 30-year bond declined seven basis points to 3.53 percent. Treasuries rose earlier on the GDP report, paring gains as stocks erased losses.

The dollar fell against 14 of its 16 major counterparts as demand eased for refuge investments. The dollar lost 0.8 percent against the euro, and depreciated 1 percent versus the yen. The yen’s advance was the first in three days as Japanese Prime Minister Naoto Kan said he was stepping down after parliament passed the final two pieces of his legislative agenda.

The Swiss franc tumbled 2.4 percent versus the euro on speculation Swiss policy makers will introduce new measures to cap its gains and that local banks may start charging customers for franc deposits.

Zurich-based UBS said it may levy a temporary excess balance fee to curb the inflow of Swiss francs, citing “the prevailing market conditions which in particular affect the Swiss franc.” It commented in a note to bank clients sent via the Swift system and confirmed to Bloomberg.

Crude oil gained, erasing declines following Bernanke’s speech. Crude oil for October delivery climbed 0.1 percent to settle at $85.37 a barrel. Futures advanced 3.8 percent this week, for their first weekly gain since July.

Gasoline fell 1.2 percent. Futures climbed 3.1 percent yesterday on concern that Hurricane Irene will batter refineries along the U.S. East coast. The region has 10 operating oil refineries with a capacity of 1.21 million barrels a day, according to the Energy Department. The area accounts for 7.1 percent of total U.S. operating capacity.

Gold jumped for a second straight day, rising 3.4 percent to $1,823.90 in electronic after-market trading. Gold futures slumped as much as 11 percent in the three days through yesterday, after touching a record $1,917.90 an ounce on Aug. 23. Today’s advance pared the metal’s weekly drop to 3 percent.

Gold is in the 11th year of a bull market, the longest winning streak since at least 1920 in London, as investors seek to diversify away from equities and some currencies. Before this week, gold climbed for seven consecutive weeks, the longest rally since April 2007.

Have a wonderful day everyone!

Be magnificent!

Meditation can take place when you are sitting in a bus,

or walking in the woods full of light and shadows,

or listening to the singing of the birds,

or looking at the face of your wife or child.

 

-Krishnamurti, 1895-1986

As ever,

Carolann

The ultimate inspiration is

the deadline.

 -Nolan Bushnell, 1943-

 

Dear Friends,

Tangents:

August 25^th, 1939: The Wizard of Oz is released!

He lives long who lives well. 

   -English proverb, mid 16^th century.

On this day, August 25^th, in 1879. Robert Lois Stevenson wrote to W. E. Henley, the following:

(Stevenson was on his way to California to see Fanny Osbourne, the American with whom he had fallen in love in France in 1876 and whom eventually he married.  The train was crossing south-west Wyoming, and he had been taken ill at Laramie.)

 

What it is to be ill in an emigrant train let those declare who know.  I slept none till late in the morning, overcome with laudanum, of which I had luckily a little bottle.  All today I have eaten nothing, and only drunk two cups of tea, for each of which, on the pretext that the one was breakfast, and the other dinner, I was charged fifty cents, and neither of them, I may add, stood by me for three full minutes.  Our journey is through the ghostly deserts, sage brush and alkali, and rocks, without form or colour, a sad corner of the world.  I confess I am not jolly, but mighty calm in my distresses.  My illness is a subject of great mirth to some of my fellow travelers, and I smile sickly at their jests. –from The Book of Days.

Joy is a net of love by which you can catch souls. – Mother Teresa

Photos of the day 

August 25, 2011

An artisan works on a statue of Mother Teresa ahead of her 101st birth anniversary, at a workshop in Kolkata, India. Rupak De Chowdhuri/Reuters

Nepalese are seen as they spend their time in a temple at Bashantapur Durbar Square, in Kathmandu, Nepal. Navesh Chitrakar/Reuters

Market Commentary:

Canada

By Matt Walcoff

Aug. 25 (Bloomberg) — Canadian stocks fell for the first time in four days, led by financial companies and energy producers, after the U.S. reported an increase in initial jobless claims and European equities plunged.

Suncor Energy Inc., Canada’s largest oil and gas producer, dropped 1.4 percent. Royal Bank of Canada, the country’s largest lender by assets, lost 1.2 percent as financial shares slid.

Barrick Gold Corp., the world’s largest gold producer, increased 1.6 percent as companies in the industry rebounded after sinking 7.2 percent in the previous two days.

The Standard & Poor’s/TSX Composite Index slipped 45.96 points, or 0.4 percent, to 12,297.85 at 2:05 p.m. in Toronto after gaining 0.3 percent earlier on speculation the U.S. Federal Reserve will signal new measures to stimulate the economy at a symposium in Jackson Hole, Wyoming, tomorrow.

“A lot of hopes had been put into tomorrow’s Jackson Hole meeting,” Luciano Orengo, a money manager at Manulife Financial Corp. in Toronto, said in a telephone interview. Orengo oversees C$1.6 billion ($1.6 billion). “People are coming to the realization that nothing of substance is going to come out tomorrow.”

The S&P/TSX slipped 4.7 percent this month through yesterday, the second-least among major developed-market stock benchmarks behind New Zealand’s, as gold rallied to a record while oil futures sank 11 percent. Gold tumbled 5.6 percent yesterday, the most since March 2008, after the U.S. reported a bigger increase in durable-goods orders than most economists had forecast.                       

Last week, 417,000 Americans filed for first-time unemployment claims, the Labor Department said today in Washington. The figure exceeded all 46 forecasts in a Bloomberg survey of economists.

Crude oil and natural gas swung between gains and losses as European equity markets tumbled on concern the region’s debt crisis is worsening.

Suncor dropped 1.4 percent to C$29.87. Encana Corp., the country’s largest natural gas producer, declined 2.9 percent to C$24.17. Niko Resources Ltd., an oil and gas producer with operations in South Asia, sank 7.1 percent to C$52.34, the lowest since March 2009, after reporting a quarterly loss.

Athabasca Oil Sands Corp., PetroChina Co.’s partner in oil- sands development, surged 5.5 percent to C$13.01 after the Washington Post said the U.S. State Department will take a step toward approving a proposed TransCanada Corp. pipeline to the Gulf Coast as early as tomorrow. The newspaper cited unnamed sources familiar with the process.

The S&P/TSX Financials Index decreased after jumping the most since July 2009 in the previous two days.

Royal Bank retreated 1.2 percent to C$50.65. Manulife, North America’s fourth-biggest insurer, slipped 2.6 percent to C$12.88. National Bank of Canada, the country’s sixth-biggest lender, fell 2.3 percent to C$70.72 after reporting third- quarter revenue that trailed the average analyst estimate in a Bloomberg survey.

Precious-metals producers advanced as silver gained and gold rebounded from a two-week intraday low.

Barrick increased 1.6 percent to C$49. Goldcorp Inc., the world’s second-largest gold producer by market value, climbed 1.9 percent to C$49.66. China Gold International Resources Corp. rallied 11 percent, the most since July 2010, to C$4.61 after reporting a fivefold resources increase at its Jiama copper and gold mine in Tibet.

Electronic-products maker 5N Plus Inc. jumped 16 percent, the most intraday since June 2009, to C$8.31. The company reported fourth-quarter profit that beat the average of four analyst estimates by 48 percent, excluding certain items.

US

By Sarah Jones, Alexis Xydias and Rita Nazareth

Aug. 25 (Bloomberg) — Stocks dropped worldwide, snapping a three-day rally for the Standard & Poor’s 500 Index, after the U.S. said jobless claims increased and traders sold German equity futures before France, Italy and Spain extended curbs on short selling. Gold, the dollar and Treasuries rallied.

The S&P 500 fell 1.6 percent to 1,159.27 at 4 p.m. in New York, after climbing 4.8 percent over the past three days. The Stoxx Europe 600 Index lost 1.2 percent. Germany’s DAX Index ended the day with a 1.7 percent slump, recovering from a 15- minute plunge of 4 percent. Gold added 0.3 percent, halting its biggest decline since 2008. The Dollar Index jumped 0.3 percent.

Yields on 10-year Treasury notes lost seven basis points before Federal Reserve Chairman Ben S. Bernanke begins a speech in Jackson Hole, Wyoming, at 10 a.m. New York time.

Traders hedged their investments by selling DAX futures, lifting volume to a quarter of the daily average within a 30- minute period. That dragged down the index, pulling equities in the U.S. and throughout Europe lower, and drove Treasuries and the dollar higher. After European markets closed, French, Italian and Spanish stock-market regulators extended bans on short selling introduced this month.

“We’re not out of the woods, and the market is reflecting that,” Paul Zemsky, the New York-based head of asset allocation for ING Investment Management, said in a phone interview. His firm oversees $550 billion. “The European situation is still a mess. Sometimes these markets get hit because they are the most liquid. If you want to dump risk quickly in Europe, shorting Germany is probably the best way to do it.”                     

When U.S. exchanges opened, the S&P 500 advanced as much as 1.1 percent after Warren Buffett’s Berkshire Hathaway Inc. agreed to invest $5 billion in Bank of America Corp., which had plunged 53 percent in 2011. The stock rallied 9.4 percent after surging as much as 26 percent. At the same time, Nasdaq-100 Index futures erased losses that had been driven by Steve Jobs resigning as Apple Inc.’s chief executive officer. Apple shares lost 0.7 percent.

Declines in stocks intensified at about 9:45 a.m. New York time. The DAX dropped from about 5,681, yesterday’s closing level, to 5,451.52 at 10:01 a.m. A report at 8:30 a.m. showed an increase in American jobless claims that economists didn’t anticipate. Nobel-prize winning economist Joseph Stiglitz said the chances of the U.S. economy going back into recession are “very high,” speaking at a conference today in Lindau, Germany. The city of Harrisburg, Pennsylvania, said it may miss a $3.3 million bond payment on Sept. 15.

 “It’s such a mishmash,” Hank Smith, chief investment officer at Haverford Trust Co. in Radnor, Pennsylvania, said in a telephone interview. His firm manages about $6.5 billion.

“You have Buffett investing in Bank of America, which is a bet on the U.S. economy. Still, the employment picture is not a good one,” he said. “Then, there’s the European debt crisis. If global growth slows, that could be more of an issue.”

Investors are awaiting tomorrow’s speech by Bernanke in Jackson Hole, Wyoming, and will be looking for indications of whether the central bank will embark on further stimulus.

“The markets have been very sensitive to every piece of economic data,” Keith Wirtz, the Cincinnati-based chief investment officer at Fifth Third Asset Management, which oversees $16.7 billion, said in a telephone interview. “You still got an indication that we have a poor labor market. When it comes to Jackson Hole, the sentiment has been all over the place. It seems that the recent stock performance has been supported by expectations of QE3. If there’s no indication tomorrow, this market may retrace.”

Before Buffett’s Bank of America investment drove equities higher, stock futures erased gains after jobless claims climbed by 5,000 to 417,000 in the week ended Aug. 20, Labor Department figures showed today in Washington. Economists surveyed by Bloomberg News projected a drop in claims to 405,000, according to the median forecast. Claims were pushed up for a second time by a labor dispute at Verizon Communications Inc.

Data tomorrow may indicate the world’s biggest economy grew 1.1 percent in the second quarter, down from a previous estimate of 1.3 percent, according to the median of 80 forecasts in a separate survey.

Gold rebounded, erasing a loss of 3 percent, as the drop in equities increased the precious metal’s appeal as a haven asset.

Gold futures gained 0.3 percent to settle at $1,763.20. Prices tumbled 7.1 percent in the previous two sessions, after gaining as much as 18 percent this month to an all-time high of $1,917.90.                          

The yield on 30-year Treasuries dropped six basis points as the jobless claims report fueled concern the economic recovery is slowing and stoking demand for U.S. debt. Government debt snapped three days of declines.

The U.S. sold $29 billion in seven-year notes at a record low yield of 1.58 percent. Today’s offering is the third of three auctions of U.S. notes this week totaling $99 billion. The Treasury sold $35 billion of five-year debt yesterday at a yield of 1.029 percent and the same amount of two-year securities on Aug. 23 at 0.222 percent, both record auction lows.

The euro weakened for a second day against the dollar, dropping 0.2 percent to $1.4379. It touched $1.4328, the lowest level since Aug. 19, after gaining as much as 0.4 percent earlier. The yen dropped against all of its 16 major peers.

The Dollar Index, which IntercontinentalExchange Inc. uses to track the dollar against the currencies of six major U.S. trade partners including the euro and yen, gained 0.3 percent after declining 0.3 percent earlier.

 Crude oil increased as Hurricane Irene threatened to shut refineries on the U.S. East Coast. Crude oil for October delivery gained 0.2 percent to settle at $85.30 a barrel on the New York Mercantile Exchange. Irene is on a course that would skirt the coast this weekend before slamming into New England.

Copper rose 2.3 percent, the most in two weeks, after Glencore International Plc, the largest publicly traded commodity trader, said demand growth for the metal is set to maintain its pace. Stockpiles of copper in bonded warehouses in China, the world’s biggest user of the metal, have dropped about 50 percent this year, according to Glencore.

The Shanghai Composite Index jumped 2.9 percent, the most in 10 months, after Bank of China Ltd. said first-half profit jumped 28 percent to a record while bad loans dropped.

Industrial & Commercial Bank of China Ltd., the world’s largest lender by market value, and Agricultural Bank of China Ltd. reported earnings that topped analysts’ estimates after local markets closed. The Czech PX Index advanced 1 percent, rallying for a second day after S&P upgraded the country by two notches to AA-.

Komercni Banka AS jumped 2.9 percent in Prague after Goldman Sachs Group Inc. recommended buying the bank’s shares. The MSCI Emerging Markets Index dropped 0.6 percent.

Have a wonderful evening everyone.

Be magnificent!

Variety is the first principle of life.

What makes us formed beings?

Differentiation.

Perfect balance will be destruction.

 

-Swami Vivekananda, 1863-1902

As ever,

Carolann

There are two levers for moving men –

interest and fear.

       -Napoleon Bonaparte, 1769-1821   

 

 

Dear Friends,

Tangents:

A tale never loses in the telling.  ~ English Proverb, mid-16^th century.

We were in Seattle on the weekend to attend a production Porgy and Bess on Saturday night – it was fabulous and great performances by all.  It began with Angle Blue singing Summertime.  She is amazing.  Coincidentally, the next day, I was reading the Sunday NY Times and the reaction to Stephen Sondheim’s criticism last week of a new version of Porgy and Bess being staged by American Repertory Theatre in Cambridge, Mass. pre-Broadway was so torrential, it warranted half of page of readers’ comments.  Here’s a sampling:

“With all due respect to Mr. Sondheim, I find this odd coming from someone who himself has turned the whole of musical theater on its head, and not without a certain amount of arrogance, chutzpah and, of course, brilliance.  What’s not to say that the current creative team of ‘Porgy and Bess’ may in fact end up creating something brilliant?  Or not.  The wisest comment I’ve read in this discussion was the early-on-assertion that perhaps we should reserve judgment until we’ve seen the production.  And even that said – and with all due respect to all of us artists who pour our hearts and souls into our work – it is just a production.  Whether it is successful or not, once it has run its run, it’ll be gone, and the whole of ‘Porgy and Bess’ will remain intact and unmolested for the next creative team to take on its challenges.”  -Gregg Brevoort, Los Angeles

“Throughout history we have applauded our forefathers for their artistic brinkmanship.  Virgil takes on Homer; Dante takes on Virgil; Cervantes takes on everyone.  Has not Mr. Sondheim wrestled with Shakespeare, Bergman and the Brothers Grimm?” –Julie Crosby, producing artistic director, Women’s Project Theater

 

…and so it goes.

If you are heading down to Seattle anytime soon, a neat thing to do is to head to Ballard on Sunday morning.  The main street is closed and there is a fantastic farmers’ market – really great.  There are buskers to entertain – there was even a men’s choral concert happening by the side of the road.  I couldn’t help noticing how much cheaper all the fruit, vegetables and dairy products are than here.  Milk, eggs, cheese, are almost half to a third of the price they are here.   Ballard was an old Icelandic fishing village, and the vestiges of  that history are apparent everywhere.

Photos of the day 

August 23, 2011

Mo the dog sits in the front seat of a convertable with his owner as they leave a supermarket in Gelsenkirchen, Germany. The pilot goggles protect Mo’s eyes from the wind. Martin Meissner/AP.

Market Commentary:

Canada

By Matt Walcoff

Aug. 23 (Bloomberg) — Canadian stocks rose for a second day as lenders gained after Bank of Montreal reported earnings that beat the average analyst estimate and energy companies advanced with oil and natural gas.

Bank of Montreal, Canada’s fourth-largest lender by assets, increased 4.3 percent. Canadian Natural Resources Ltd., the country’s second-biggest energy company by market value, climbed 6 percent as forecasts for hotter U.S. weather boosted gas futures. Goldcorp Inc., the world’s second-largest gold producer by market value, fell 5.3 percent as the metal dropped from a record.

The Standard & Poor’s/TSX Composite Index rose 269.97 points, or 2.2 percent, to 12,338.33, with financial shares accounting for 41 percent of the gain.

“Out of the gate, the first bank to report looks like a positive signal and above what people were anticipating,” Cameron Webster, managing partner at Sandstone Asset Management Inc. in Calgary, said in a telephone interview. The firm oversees about C$200 million ($202 million).

The index plunged 11 percent in the month ending yesterday as its bank stocks declined to an 11-month low and its energy stocks retreated to the lowest relative to forecast earnings since March 2009. Banks and energy companies make up 15 percent and 25 percent, respectively, of Canadian stocks by market value, according to Bloomberg data.

Bank of Montreal gained 4.3 percent, the most since August 2009, to C$59.80. Third-quarter profit increased 19 percent from a year earlier, boosted by higher investment-banking earnings, the Toronto-based lender said today. The profit surpassed the average estimate in a Bloomberg survey by 4.2 percent, excluding certain items.

Bank of Nova Scotia, Canada’s third-largest lender by assets, climbed 4.5 percent to C$51.43 after closing at a 13- month low yesterday. Royal Bank of Canada, the country’s biggest bank, advanced 3.3 percent from a two-year low to C$50.06.

Natural gas rose 2 percent in New York after settling at a five-month low yesterday. Crude oil for October delivery advanced for a second day, gaining 1.2 percent, amid speculation the Federal Reserve will bolster efforts to stimulate the economy.                  

Canadian Natural, which closed at the lowest since September 2009 yesterday, increased 6 percent to C$34.88. Suncor Energy Inc., Canada’s largest oil and gas producer, climbed 4.4 percent to C$30.10. Canadian Oil Sands Ltd., the largest owner of the Syncrude project, soared 7 percent, the most since May 2009, to C$21.88.

Gold futures fell 1.6 percent after touching an intraday record of $1,917.90 an ounce in New York. Dennis Gartman, the economist and editor of the Gartman letter, said in his report today he is selling gold because prices became “too frothy.”

Goldcorp dropped 5.3 percent to C$50.79 after closing at a record high yesterday. Barrick Gold Corp., the world’s largest producer of the metal, declined 3 percent to C$50.10. Extorre Gold Mines Ltd., which explores in Argentina, sank 9.7 percent to C$9.84.

Centerra Gold Inc., which mines in Kyrgyzstan and Mongolia, slumped 12 percent, the most since December 2008, to C$19.21 after Trevor Turnbull, an analyst at Scotiabank, cut his rating on the shares to “sector perform” from “sector outperform.”

Turnbull said in a note to clients that the shares were near his one-year price estimate. Centerra soared 49 percent from June 16 to yesterday.

Potash Corp. of Saskatchewan Inc., the world’s biggest fertilizer producer by market value, advanced 6.1 percent to C$53.81 as corn and wheat rose for a third day. Agricultural futures have gained on speculation dry U.S. weather will limit yields. The portion of the U.S. corn crop in good or excellent condition fell to 57 percent last week from 60 percent a week earlier, according to a U.S. Agriculture Department report released yesterday.

Copper climbed after a preliminary reading indicated an HSBC Holdings Plc and Markit Economics index of Chinese manufacturing may rise. An index of S&P/TSX base-metals and coal producers gained after ending yesterday at the lowest close since September.

Teck Resources Ltd., Canada’s largest company in the industry, advanced 5.2 percent to C$39.54. Grande Cache Coal Corp., which mines in Alberta, surged 9.7 percent to C$6.91.

Ivanhoe Mines Inc., which is building a copper and gold mine in Mongolia with Rio Tinto Group, soared 20 percent, the most since August 2009, to C$20.62.

Craig Miller, an analyst at Toronto-Dominion Bank, boosted his rating on the shares to “speculative buy” from “hold.”

In a note to clients, Miller cited recent the recent retreat in the shares’ price and progress at the Oyu Tolgoi mine in Mongolia.

Yoga-wear retailer Lululemon Athletica Inc. rebounded 11 percent to C$50.02 after tumbling 22 percent in the previous six days. Imax Corp., the maker of giant-screen movie-projection systems, rallied 13 percent, the most since December 2008, to

C$15.71 after a 23 percent plunge in the previous five sessions.

US

By Rita Nazareth and Jeff Sutherland

 Aug. 23 (Bloomberg) — Global stocks rallied, snapping three days of declines after valuations reached the cheapest levels since 2009, as investors speculated the Federal Reserve will act to spur the economy. Oil jumped while the dollar fell.

The MSCI All-Country World Index added 2.3 percent at 7:17 p.m. in New York, as weaker-than-anticipated U.S. economic data increased optimism for stimulus measures. The Standard & Poor’s 500 Index jumped 3.4 percent to 1,162.35, paring gains briefly after an earthquake shook New York and Washington. Oil rallied 1.2 percent. The Dollar Index fell 0.3 percent. The yen slid against the U.S. currency after Moody’s Investors Service cut Japan’s sovereign-credit rating. Gold sank the most since May.

The MSCI gauge of global equities is rebounding from the lowest level since September before central bankers meet this week in Jackson Hole, Wyoming. Last year, Fed Chairman Ben S. Bernanke’s hint of a second round of asset purchases, or quantitative easing, spurred a 28 percent jump in the S&P 500.

Financial stocks in the S&P 500 rallied 3.2 percent, recovering from an earlier decline, after the Federal Deposit Insurance Corp.’s list of “problem” banks fell in the second quarter for the first time since 2006 as the cost for bad loans eased.

“The reason for the rebound today might be in the bad economic data that we saw earlier this morning,” Philip Orlando, the New York-based chief equity market strategist at Federated Investors Inc., which oversees about $355 billion, said in a telephone interview. “What investors are reading is that the Fed has got to do something.”

Optimism about more Fed stimulus grew after the Fed Bank of Richmond’s business activity index dropped to minus 10 in August, the weakest since June 2009. The monthly survey of producers in the region covering the Carolinas, Maryland, Virginia and West Virginia corroborated factory reports from Philadelphia and New York that pointed to weakness in the industry. Also, the Commerce Department said sales of new U.S. homes declined more than projected in July to the lowest level in five months.

 “Speculation of another form of the ‘Bernanke Put’ is growing with each new data point that suggest the economy continues to weaken,” Miller Tabak Roberts Securities LLC strategist Adrian Miller wrote in a note to clients today. “We caution the market on getting ahead of itself as the cost/benefit analysis the Fed has used in the past in determining whether another QE program is warranted in not favorable at this point.”

A four-week global equity rout has wiped about $8 trillion from companies’ market value as Europe’s sovereign debt-crisis and worsening economic reports in the U.S. raised concern the global economic recovery is faltering. The S&P 500 fell 16 percent from July 22 through the end of last week in its biggest four-week loss since March 2009. Companies trade at an average 11.3 times estimated earnings, near the lowest level in 2 1/2 years.

U.S. stocks are cheap after suffering the biggest losses since March 2009, said Byron Wien, a senior managing director at Blackstone Group LP, the world’s biggest private equity firm.

“You got the market down to 11 times earnings,” Wien said in a radio interview today on “Bloomberg Surveillance” with Tom Keene and Ken Prewitt. “Usually it sells at around 15. That makes a number of stocks attractive here.”

The S&P 500’s rally, its biggest advance since Aug. 11, was paced by companies most-tied to the economy, with energy and technology shares climbing at least 3.9 percent. All 10 industries in the benchmark gauge advanced. The Morgan Stanley Cyclical Index gained 2.9 percent, breaking a five-day losing streak.

Financial shares in the S&P 500 rose after dropping 1.3 percent earlier as the cost to protect debt issued by Bank of America Corp. surged to a record. Bank of America lost 1.9 percent, paring its decline from 6.4 percent. Goldman Sachs Group Inc. gained 0.3 percent after losing as much as 3.2 percent.

Financial institutions in the S&P 500 tumbled 25 percent in 2011 through yesterday, the most among 10 groups, amid speculation the government debt crisis in Europe will spur banking losses. The industry has the second-biggest weighting in the benchmark measure of U.S. shares at 14 percent. Goldman Sachs and Bank of America slumped 37 percent and 52 percent, respectively, the most since 2008, this year through yesterday.

Stocks briefly pared gains after the 5.8-magnitude earthquake in Virginia rattled Washington and New York. More than 66 million shares changed hands on U.S. exchanges at 1:55 p.m. New York time following the earthquake in Virginia, more than any minute since just after the market opened at 9:30 a.m.

The Stoxx Europe 600 Index rose for a second day, climbing 0.8 percent, after a preliminary purchasing-managers index compiled by HSBC Holdings Plc and Markit Economics showed Chinese manufacturing may contract at a slower pace in August as the world’s second-biggest economy weathers slumping global confidence. The report helped ease concern that the economic slowdown is deepening.

UBS AG rose 2.1 percent after Switzerland’s biggest bank said it plans to cut 3,500 jobs to trim costs. Charter International Plc, a welding and automation-equipment maker, jumped 20 percent after saying it’s in talks with a potential bidder other than Melrose Plc.

The Stoxx 600 has still lost 18 percent this year, driving valuations down to 9.4 times estimated profits, near the lowest level since March 2009, according to data compiled by Bloomberg.

Treasury 10-year yields rose five basis points to 2.15 percent. The government sold $35 billion in two-year notes today at a record low yield of 0.22 percent. The securities are the first of the maturity to be sold after S&P on Aug. 5 downgraded the U.S. AAA long-term sovereign rating. The offering was the first of three note sales this week totaling $99 billion. The Treasury will sell $35 billion in five-year debt tomorrow and $29 billion of seven-year notes on Aug. 25.

The Dollar Index, which tracks the greenback against currencies including the euro, yen and pound, fell 0.3 percent, as optimism over possible Fed moves to boost the U.S. economy damped demand for safer assets. The New Zealand and Australian dollars led gains against the U.S. currency, rising 1.4 percent and 1.1 percent, respectively.

The euro climbed 0.6 percent versus the dollar, to $1.4444, maintaining gains after a report showed German investor confidence fell more than economists forecast. The yen weakened 0.1 percent to 76.73 per dollar after Moody’s lowered Japan’s grade by one step to Aa3, with a stable outlook.                         

 Oil rallied for a second day, climbing 1.2 percent to settle at $85.44 in New York after an earlier decline of 1.2 percent, as equities advanced and the dollar weakened. Oil also increased as fighting continued in Libya, damping hopes the country is close to resuming crude exports. Rebels said they entered Libyan leader Muammar Qaddafi’s compound of Bab Al Aziziya in the capital, Tripoli, and raised their flag, Al Arabiya reported.

Gold dropped as much as 3.5 percent in after-hours electronic trading. The metal posted its first decline in seven sessions, as some investors sold the metal after signs of slowing growth spurred a rally to a record $1,917.90 an ounce.

The relative-strength index of futures in New York has topped 70 since Aug. 8, a signal to some investors that prices were poised to decline. Bullion has jumped 14 percent in August.

S&P’s GSCI Index of 24 raw materials rose 1 percent. Copper climbed the most since Aug. 11, gaining 1 percent. Imports of refined copper by China, the world’s largest user, rose for a second month in July, customs data showed yesterday. Inbound shipments of scrap copper jumped 14 percent from a year earlier.

The Markit SovX Western Europe Index of credit-default swaps insuring the debt of 15 governments rose 2 basis points to 299. Greek government bonds slumped, with 10-year yields climbing to 17.43 percent, the highest level in a month, amid uncertainty over the details of a new loan package for the Mediterranean nation. Greece’s two-year note yield jumped 120 basis points to 39.61 percent, driving the difference with benchmark German securities to the most since at least 1998.

The MSCI Emerging Markets Index rallied 2 percent, after falling to a one-year low yesterday. China’s Shanghai Composite Index advanced 1.5 percent, Taiwan’s Taiex climbed 3.3 percent and South Korea’s Kospi jumped 3.9 percent.

Have a wonderful evening everyone.

Be magnificent!

We must learn to love those who think exactly opposite to us.

We have humanity for the background, but each must have his own individuality and his own thought.

Push the sects forward and forward till each man and woman are sects unto themselves.

We must learn to love the man who differs from us in opinion.

We must learn that differentiation is the life of thought.

We have one common goal,

and that is the perfection of the human soul, the god within us.

 

-Swami Vivekananda, 1863-1902

 

Dear Friends,

Tangents:

100 YEARS AGO DA VINCI DISAPPEARANCE

A painter visiting the Louvre on August 22, 1911, discovers only hooks where the Mona Lisa, Leonardo da Vinci’s 1503-6 portrait of Lisa Gherardini, should be.  The museum shuts down for days as police comb for evidence.  Suspicion falls briefly on writer Guillaume Apollinaire and Pablo Picasso, and rumors are rife – the masterpiece has been taken to America, Russia, Switzerland.  More than two years pass before former Louvre employee Vincenzo Perugia is nabbed trying to sell the painting to a dealer in Florence.

  “The picture smiled down at me,” he says of the theft, and claims he stole it to restore the work to Italy.  He is sentence to time served.  – The Smithsonian.

 

If you haven’t had the chance to see Woody Allen’s Midnight in Paris yet, don’t delay much longer.  You will be transported – you’ll love it.  It is the most marvelous film – the vistas of Paris are amazing – so beautiful.

Photos of the day 

August 22, 2011

People pay tribute to Jack Layton in front of the Centennial Flame on Parliament Hill in Ottawa, Canada. Layton, the charismatic leader of the New Democratic Party, died on Monday just months after guiding his party to its strongest ever performance in the May federal election. Chris Wattie/Reuters.

 

The statue of Dr. Martin Luther King, Jr. is seen unveiled from scaffolding during the soft opening of the Martin Luther King, Jr. Memorial in Washington, DC. Jacquelyn Martin/AP.

Market Commentary:

Canada

By Matt Walcoff

Aug. 22 (Bloomberg) — Canadian stocks rose for the first time in three days as gold and silver gained on concern the U.S. economic recovery is slowing.

Goldcorp Inc., the world’s second-biggest gold producer by market value, climbed 4.8 percent as futures rallied for a sixth day in New York. BCE Inc., Canada’s biggest phone company, advanced 1.6 percent as telecommunications companies jumped.

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, rose 1.1 percent as wheat and corn jumped to two-month highs.

The Standard & Poor’s/TSX Composite Index gained 60.89 points, or 0.5 percent, to 12,068.36.

“There’s a lot of worry going on in the world, and one of the true safe havens is gold,” Robert Cohen, a resources-fund manager at Bank of Nova Scotia’s Goodman & Co. Investment Counsel unit, said in a telephone interview. Cohen oversees C$1.8 million ($1.8 million). “There is a very high level of fear in stocks.”

The index has dropped less this month than all other major developed-market stock benchmarks except New Zealand’s as gold futures have surged to a record. S&P/TSX gold stocks have soared 15 percent this month while energy companies have plunged 13 percent and financial stocks fell 7.6 percent.

Economists at Goldman Sachs Group Inc. cut their forecast of 2011 U.S. gross domestic product growth to 1.5 percent from 1.7 percent in a note published Aug. 19. Credit Suisse Group AG and JPMorgan Chase & Co. also lowered their growth estimates for the U.S. last week.                       

The S&P/TSX Gold Index jumped to the highest level since December as gold and silver futures each rose 2.1 percent.

Goldcorp gained 4.8 percent to a record C$53.65. Barrick Gold Corp., the world’s largest producer, advanced 2.6 percent to C$51.64. Silver Wheaton Corp., Canada’s fourth-biggest precious-metals company by market value, increased 4.8 percent to C$39.88. Silver Standard Resources Inc., which mines in Latin America, soared 9.1 percent, the most since December 2009, to C$27.47.

An index of S&P/TSX telecommunications stocks climbed 1.3 percent to extend its 2011 surge to 10 percent. The shares have gained as investors seek higher-yielding assets with bond yields near record lows. The index has a dividend yield of 4.6 percent, compared with 2.8 percent for the S&P/TSX Composite Index.

BCE rose 1.6 percent to C$38.84. Rogers Communications Inc., Canada’s largest wireless carrier, advanced 1.5 percent to C$37.01. Telus Corp., the third-biggest phone company, increased 1 percent to C$52.12.

Potash Corp. climbed 1.1 percent to C$50.72 as corn and wheat futures gained on speculation dry weather in the U.S. will cut yields.

 Also today, Ben Isaacson, an analyst at Scotiabank, increased his rating on Potash Corp. shares to “sector outperform” from “sector perform.” In a note to clients, Isaacson cited the shares’ underperformance relative to Potash Corp.’s peers. The company’s U.S.-traded shares sank 18 percent from July 25 to Aug. 19, compared with 17 percent for Agrium Inc.’s U.S. shares and 14 percent for Mosaic Co.

The S&P/TSX Banks Index dropped after sinking 3.4 percent, the most in two years, on Aug. 19. Royal Bank declined 1 percent to C$48.48. Scotiabank, Canada’s third-largest lender by assets, slipped 2 percent to a one-year low of C$49.23. Canadian Imperial Bank of Commerce, the country’s No. 5 lender, lost 1.2 percent to C$68.60.

First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, sank 5.4 percent to C$20.06 as copper decreased 0.7 percent. Teck Resources Ltd., Canada’s largest company in the industry, slipped 1 percent to an 11- month low of C$37.57. Ivanhoe Mines Ltd., which is building a copper and gold mine in Mongolia with Rio Tinto Group, retreated 4.8 percent to C$17.12 to extend its August plunge to 32 percent.

US

By Rita Nazareth

Aug. 22 (Bloomberg) — Most U.S. stocks fell after Goldman Sachs Group Inc.’s decline in the last 15 minutes of trading wiped out the day’s second Standard & Poor’s 500 Index rally, overshadowing gains by technology shares.

Goldman Sachs slumped 4.7 percent to the lowest level since March 2009 after Reuters said Chief Executive Officer Lloyd Blankfein hired a defense attorney. The company confirmed the report after the close of trading. Bank of America Corp. retreated 7.9 percent, the most in the S&P 500, amid concern about the lender’s capital raising plans. Computer stocks in the S&P 500 added 0.7 percent, including Hewlett-Packard Co.’s 3.6 percent advance following last week’s 27 percent plunge.

About 10 stocks fell for every nine that rose on U.S. exchanges at 4 p.m. in New York. The S&P 500 added less than 0.1 percent to 1,123.82 today. The benchmark gauge rallied as much as 2 percent, and posted an advance of 1.1 percent about three hours before markets closed. The Dow Jones Industrial Average rose 37 points, or 0.3 percent, to 10,854.65.

“We’ve been watching mood swings and lack of good news to offset the concerns out there,” Richard Sichel, who oversees $1.6 billion as chief investment officer at Philadelphia Trust Co., said in telephone interview. “Investors are skittish about the financials. There’s still not a lot of confidence in the sector for a couple of years now. When you hear anything that brings back memories of the financial crisis, you’ll see the market reacting like it did today. In addition, the fear of a recession comes and goes.”                  

 Financial institutions in the S&P 500 have tumbled 25 percent in 2011, the most among 10 groups, amid speculation the government debt crisis in Europe will spur banking losses. The industry has the second-biggest weighting in the benchmark measure of U.S. shares at 14 percent. Goldman Sachs and Bank of America have slumped 37 percent and 52 percent, respectively, the most since 2008, so far this year.

Stocks rallied earlier amid optimism the Federal Reserve will announce a plan to stimulate the economy. Chairman Ben S. Bernanke is scheduled to speak on Aug. 26 at a meeting of central bankers in Jackson Hole, Wyoming.

“People are of the belief that there’s an increasing likelihood of a new quantitative easing program,” Mark Luschini, the chief investment strategist at Philadelphia-based Janney Montgomery Scott LLC, which manages $54 billion, said in a phone interview. “We hold no expectation that we’re going to see that. The hurdle remains pretty high. I’m concerned that if we get some rally on that expectation and it doesn’t come through, that the equity market would be set for a decline.”                    

The S&P 500 rose 28 percent between Aug. 26, 2010, and Feb. 18 after Bernanke foreshadowed a $600 billion bond-purchase program a year ago in Jackson Hole. Record-low yields on Treasuries show traders expect Bernanke to signal that the central bank will begin a third round of asset purchases to boost the economy, known as quantitative easing, a scenario the world’s biggest bond dealers said is unlikely.

 Barclays Plc said 10-year yields indicate traders have priced in $500 billion to $600 billion of Treasury purchases by the Fed. Citigroup said current rates can only be justified by more central bank bond buying or assuming the economy will shrink by 2 percent.

“Without additional Fed stimulus, it is unlikely our target for the S&P 500 of 1,400 is reached this year,” Mary Ann Bartels, Bank of America’s technical research analyst, wrote in a note to clients. “We suggest using rallies to raise cash and/or become more defensive until our trip wires to a bottom generates a buy signal.”

 The S&P 500 trimmed its rally this morning after rising within 5 points of 1,150, a level where rebounds stalled in the prior two days. Today’s slide tracked losses in Germany’s DAX Index, which fell 2.1 percent from the open of U.S. exchanges to close down 0.1 percent, even as the Stoxx Europe 600 Index rallied 0.7 percent. The benchmark index for American equity erased an increase of 2 percent over the same period.

Financial shares in the S&P 500 lost 1.3 percent, the most among 10 groups. The KBW Bank Index fell 1.1 percent to the lowest level since July 2009.

Goldman Sachs tumbled 4.7 percent to $106.51. Blankfein and other people hired attorneys in relation to a U.S. probe of matters raised by the Senate’s Permanent Subcommittee on Investigations, the company said in an e-mailed statement.

Bank of America lost 7.9 percent to $6.42 after China Construction Bank Corp. said the U.S. lender will keep at least half its stake. Bank of America agreed to retain at least half its 10 percent holding, China Construction President Zhang Jianguo told reporters. Analysts including Charles Peabody of Portales Partners LLC said the firm would sell all its shares.                      

Boeing Co. gained 1.5 percent to $58.38. Delta Air Lines Inc. plans to order 100 Boeing 737 single-aisle jets, a rebuff to Airbus SAS, as it refreshes its fleet with planes valued at $8.58 billion, two people familiar with the matter said.

Lowe’s Cos. rose 1.1 percent to $19.53. The second-largest U.S. home-improvement retailer said it plans to buy back $5 billion in stock during the next two to three years.

Hewlett-Packard rallied 3.6 percent, the most in the Dow, to $24.45. The shares plunged the most since the October 1987 market crash last week after a strategy shift undermined confidence in its managers.

At a time when U.S. equities have lost $2.9 trillion in market value, stock analysts are twice as bullish as they’ve been over the past 56 years when compared with economists. Wall Street firms pushed up estimates for Standard & Poor’s 500 Index earnings for a 10th straight quarter, forecasting a 17 percent gain in 2011, data compiled by Bloomberg show. That’s 9.9 times more than economists say gross domestic product will grow. The average ratio since 1954 is 5.4 times, the data show.                      

The split underscores the skittishness among investors, whose confidence has been shaken by Europe’s debt crisis and the slowing global economy. The S&P 500 is experiencing the biggest swings on record and has lost 18 percent since April 29, dragging its valuation down to 12.3 times earnings, almost the lowest since the bull market began in March 2009. Benchmark indexes in Germany, Brazil and Hong Kong have fallen more than 20 percent from their highs, the common definition of a bear market.

     “Everyone’s struggling right now with two questions,”

Keith Wirtz, the Cincinnati-based chief investment officer at Fifth Third Asset Management, which oversees $16.7 billion, said in a telephone interview on Aug. 19. “Is there a recession on the horizon, and where will earnings go? There’s a void of information. People are discounting the chances of a recession and what that could mean for earnings.”

Have a wonderful evening everyone.

Be magnificent!

The golden rule of conduct therefore, is mutual toleration,

seeing that we will never think alike and we shall see the Truth

in fragments and from different angles of vision,

Conscience is not the same thing for all.

While, therefore, it is a good guide for individual conduct,

imposition of that conduct upon all will be an insufferable interference

with everybody’s freedom of conscience.

 

-Mahatma Gandhi, 1869-1948

Dear Friends,

 

Tangents:

G & M: August 19, 1942, DIEPPE RAID ENDS IN DISASTER  Canada suffered 3,367 casualties, including 913 deaths….some historians say it provided lessons in tactics and use of equipment, ones employed in the successful operation two years later.

 

Those summer daydreams

 

From The Huffington Post:

Ø  “What you said in June:  ‘It’s so nice out.  I’m definitely going to start jogging every day.  It was the cold weather that was holding me back before.  Beach body, here I come!’”

Ø  “What you said in July:  ‘Sweet Jesus it’s hot.  I definitely can’t go running now.  I’m not being lazy. It’s just a health hazard to run in temperatures above [28 C].  I have to be mindful of my health.’”

Ø  “What you’re saying now: ‘Okay, maybe jogging isn’t for me.  I mean, I went that one time and it was really boring.  If not for the excruciating cramps and the need to stop every minute to pretend to tie my shoe, I probably would have died of boredom.  Maybe I’ll join a gym in the fall.  Yeah.  I’ll definitely do that.’”

 

Bill Clinton’s Birthday: August 19, 1946

 

Proverb: When spider webs unite, they can tie up a lion.

 

30  YEARS AGO: Seasoned Judgment ~ Calling her a “person for all seasons,” President Ronald Reagan nominates Arizona appeals court judge Sandra Day O’Connor to the U.S. Supreme Court, August 19, 1981.  The first female nominee to the high court, O’Connor faces opposition from anti-abortion groups concerned about her record.  At her confirmation hearing, she describes the role of the judiciary as “interpreting and applying the law, not making it”;  she is confirmed by a unanimous vote in the Senate on September 21.  O’Connor’s 25-year tenure is marked by centrism, and hers is often the swing vote. -The Smithsonian

 

Photos of the day

August 19, 2011

 

Bulgarian artist Kristina Yosifova works on the sand sculpture ‘Quaternion Beasts’ at the Sand Sculptures Festival in Rorschach at Lake Constance, Switzerland. Arnd Wiegmann/Reuters.

Shaun McLaughlin of Natick, Mass., who was born without a right foot, learns to surf Thursday with help from Dana Cummings of AmpSurf during a Learn-to-Surf clinic at Long Sands Beach in York, Maine. AmpSurf, a California-based organization, teaches people with disabilities how to surf. Gregory Rec/Portland Press Herald/AP.

Market Commentary:

Canada

By Matt Walcoff

Aug. 19 (Bloomberg) — Canadian stocks fell, extending a weekly drop, as banks declined on concern the global economic recovery is slowing.

Toronto-Dominion Bank, Canada’s second-largest lender by assets, lost 2.7 percent after Citigroup Inc. and JPMorgan Chase & Co. cut their U.S. growth forecasts. Penn West Petroleum Ltd., a western Canadian energy producer, decreased 3.2 percent as crude oil headed for its fourth-straight weekly retreat. Barrick Gold Corp., the world’s biggest gold producer, rose 1.3 percent as the metal extended a record.

The Standard & Poor’s/TSX Composite Index fell 47.72 points, or 0.4 percent, to 12,138.99 at 12:46 p.m. in Toronto, extending its weekly decline to 3.2 percent.

“The market has been reacting to the financial situation in Europe and the global economic slowdown,” Murray Leith, a money manager at Odlum Brown Ltd. in Vancouver, said in a telephone interview. The firm oversees C$7.5 billion ($7.6 billion). “We’ve had a big economic slowdown in North America, driven by the United States.”

The S&P/TSX lost 5.9 percent this month through yesterday as oil plunged 14 percent. The fuel retreated as data on U.S. housing and employment and European gross domestic product reflected a slowing economic rebound. Energy companies make up 26 percent of Canadian stocks by market value, according to data compiled by Bloomberg.

In a note to clients today, JPMorgan said U.S. GDP will increase one-third as much as it had formerly forecast in the first quarter of 2012. Citigroup cut its 2012 U.S. economic- growth estimate to 2.1 percent from 2.7 percent.                       

The S&P/TSX Banks Index fell to head for its biggest two- day tumble since May 2009.

TD, which has more than 1,000 U.S. branches, dropped 2.7 percent to C$72.03. Royal Bank of Canada, its bigger rival, slipped 2 percent to C$49.45. Bank of Nova Scotia, Canada’s third-largest lender by assets, declined 3.2 percent to C$50.80.

Manulife Financial Corp., the country’s biggest insurer, lost 1.8 percent to C$12.71.

Peter Routledge, an analyst at National Bank of Canada, cut his earnings estimates for the six largest banks after markets closed yesterday, citing economic pessimism in a note to clients.

An index of S&P/TSX energy stocks retreated after plunging 4.9 percent yesterday. Penn West dropped 3.2 percent to C$17.74.

Precision Drilling Corp., Canada’s largest drilling company by market value, declined 3.4 percent to C$11.99 to extend its two- day slump to 13 percent. Bankers Petroleum Ltd., an oil and gas producer with operations in Albania, fell for a sixth day, sinking 5 percent to C$4.16.                        

Gold futures rallied as much as 3.3 percent to head for their seventh-straight weekly advance as the U.S. dollar slid to a postwar low against the Japanese yen.

Barrick gained 1.4 percent to C$49.98. Goldcorp Inc., the world’s second-largest gold producer by market value, climbed 2 percent to C$50.46. Silver Wheaton Corp., Canada’s fourth- largest precious-metals company by market value, rallied 4.8 percent to C$38.59 as silver jumped as much as 4.8 percent.

 RIM gained 6 percent to C$27.03 after Peter Misek, an analyst at Jefferies & Co., raised his rating on the stock to “hold” from “underperform.” RIM could sell its patents for about $2 billion, Misek wrote in a note to clients. The shares have soared 11 percent this week, the most since October.

US

By Jeff Sutherland and Rita Nazareth

Aug. 19 (Bloomberg) — U.S. stocks fell, capping a fourth straight weekly slump for the Standard & Poor’s 500 Index, as the cheapest price-earnings ratios since 2009 failed to lure investors amid concern the global economy is weakening. The yen touched a post-World War II high against the dollar.

The S&P 500 dropped 1.5 percent to 1,123.53 at 4 p.m. in New York, after rising as much as 1.2 percent. The Stoxx Europe 600 Index fell 1.6 percent to its lowest close since July 2009.

The Japanese yen reached 75.95 per dollar, its strongest postwar level as investors sought refuge in the currency. Oil slid 0.1 percent as it swung from gains to losses. Gold futures topped $1,880 an ounce for the first time. Ten-year Treasury yields rose less than one basis point after yesterday’s record low.

Citigroup Inc. and JPMorgan Chase & Co. lowered their growth forecasts for the U.S. economy. German Chancellor Angela Merkel stepped up her rejection of jointly issued euro-area bonds, following speculation the European Union will start joint bond sales. Technology stocks in the S&P 500 retreated 2.8 percent, the most among a group of 10 in the index, as Hewlett- Packard Co. slumped 20 percent, its biggest drop since 1987 on a closing basis.

“The market is trading off of really primal fear,” Peter Kenny, a managing director in institutional sales at Knight Capital Group Inc. in Jersey City, New Jersey. “There’s fear that Europe represents a risk to the global markets, there’s fear of a recession. This is a very policy-driven approach to pricing amid a lack of enthusiasm on the part of the Europeans, specifically the Germans, not willing to assume any more risk. The reason that the market is not selling off more broadly today goes back to the sense that valuations beg for attention.”

The S&P 500 has fallen 18 percent from an almost three-year high on April 29 amid concern about Europe’s debt crisis and a global economic slowdown. The decline through Aug. 8 drove the index to a valuation of 12.2 times reported earnings, the lowest level since March 2009. Its price-earnings ratio is 12.3, compared with the average of 16.4 since 1954, according to data compiled by Bloomberg. The benchmark for U.S. equities lost 4.7 percent this week.

Global stocks fell today, extending the week’s slump in the MSCI All-Country World Index to 3.9 percent, as Citigroup cut its U.S. gross domestic product growth estimate to 1.6 percent in 2011 from 1.7 percent, and lowered its forecast for 2012 to 2.1 percent from 2.7 percent. JPMorgan said GDP will grow 1 percent in the fourth quarter rather than the 2.5 percent previously forecast and 0.5 percent in the first quarter of 2012 instead of 1.5 percent. Citigroup also reduced its earnings estimates for S&P 500 companies for this year and next.                       

Stock futures pared early losses amid optimism European Union regulators may push for joint bond sales by euro-area nations to help contain the debt crisis, putting pressure on Germany to drop its opposition. The European Commission said it may present draft legislation on euro bonds when completing a report on the feasibility of common debt sales. The commission, the EU’s regulatory arm in Brussels, opposed such a step earlier this year because of Germany.

 German Chancellor Merkel rejected the idea of jointly issued euro-area bonds, saying that a “collectivization” of the region’s debt would leave euro members worse off. “We don’t want that,” Merkel told members of her Christian Democratic Union today in Hameln, Germany.

Hewlett-Packard tumbled 20 percent after missing analysts’ forecasts and announcing strategic changes that will take at least a year to execute. Financial shares in the S&P 500 dropped 1.9 percent, the second-biggest decline among 10 industries behind technology. Citigroup retreated 4.3 percent to $26.77. JPMorgan fell 2.4 percent to $34.35.                   

Stocks in the S&P 500 are moving in lockstep with each other by the most since at least 1990, a sign that the market’s biggest retreat in three years may not be over, according to MF Global Holdings Ltd. The average correlation coefficient between the 500 companies and the index was 0.8268 yesterday, using 60 days of data, according to MF Global.

The increase shows investors are ignoring the merits of individual stocks and instead reacting to news about the economy, said Craig Peskin, co-head of technical analysis at the New York-based securities firm. High correlation “is usually the case in a bear market, when investors are liquidating equities as an asset class,” he wrote in an e-mail yesterday.

“In a bull market, when investors are differentiating, we see low or falling correlation.”

Correlation among S&P 500 stocks exceeded 0.78 twice previously, according to MF Global data. After the first time, on Dec. 1, 2008, the S&P 500 declined 17 percent to a 12-year low on March 9, 2009. Correlation peaked again on July 26, 2010, when the benchmark slipped 6.1 percent over the next month, data compiled by MF Global and Bloomberg show.

The yen rallied to the strongest level since World War II versus the dollar as the U.S. economic slowdown and Europe’s debt crisis stoked concern global growth is slumping, bolstering the refuge appeal of Japan’s currency.

Japanese Finance Minister Yoshihiko Noda signaled he’s ready to do another “surprise” intervention in markets to curb the yen’s gains. Noda said he “will keep monitoring markets carefully” and that intervention “is a measure of last resort — it would be meaningless if it were not a surprise.”

The yen has risen beyond the level that prompted Japan to unilaterally sell the currency on Aug. 4, its first intervention in currency markets since March.                          

The Japanese currency gained 5.5 percent over the past three months, making it the second-best performer among 10 major-economy currencies tracked by Bloomberg Correlation- Weighted Currency Indexes. The franc, the biggest gainer, rose 11 percent, while the dollar is down 1.7 percent.

The euro added 0.5 percent against the dollar, erasing earlier losses versus the dollar and yen amid speculation the Federal Reserve will consider measures to help ease financial market turmoil. Fed Chairman Ben S. Bernanke speaks at an economic conference next week in Jackson Hole, Wyoming. Last year at the event Bernanke foreshadowed a second round of bond purchases.

More than $6 trillion has been erased from the value of global equities this month on signs the U.S. recovery is stumbling, while the cost of insuring European sovereign debt is back to levels that triggered the region’s central bank to buy Italian and Spanish bonds on Aug. 8.                        

The Stoxx 600 closed at the lowest level in two years, as a gauge of European banks sank to the lowest level since 2009.

Daimler AG and Bayerische Motoren Werke AG slid more than 2.5 percent. Technology shares were one of two industry group among 19 in the Stoxx 600 to gain, as Autonomy Corp. surged 72 percent after the U.K. software company agreed to be bought by Hewlett- Packard.

The cost of protecting European bank bonds from default rose, with the Markit iTraxx SovX Western Europe Index of credit-default swaps linked to 15 governments climbing two basis points to 291. Two-year Greek yields surpassed 37 percent for the first time in almost a month, and 10-year yields increased 51 basis points to 16.16 percent.

Oil posted a fourth weekly decline. Futures settled 0.1 percent lower at $82.26, after falling as much as 3.9 percent and rallying 1.4 percent today. Oil in New York slipped below $80 a barrel earlier on concern that lower economic growth will curb fuel demand. Futures have dropped 18 percent since July 22, the biggest four-week decline since October 2008.                       

The S&P GSCI index of 24 commodities rose 1 percent. Gold jumped 1.7 percent to settle at $1,852.20 after trading at a record $1,887.63 earlier. The metal rallied for a seventh weekly advance, the longest run of gains since April 2007.

Treasury 30-year yields posted their biggest weekly drop since the depths of the financial crisis in December 2008.

Yields on 10-year Treasury notes increased less than one basis point to 2.07 percent. This is the second period since the 1950s in which stocks have paid higher yields than bonds, according to Birinyi Associates Inc. The 2.28 percent dividend payout for S&P 500 companies is higher than the current rate on 10-year Treasury notes, according to data compiled by Bloomberg.

Have a wonderful weekend everyone.

Be magnificent!

Differentiation, infinitely contradictory, must remain,

but it is not necessary that we should hate each other;

it is not necessary therefore that we should fight each other.

 

-Swami Vivekananda, 1863-1902

As ever,

Carolann

Of course you can’t gain ground

if you are standing still.

            -Bill Clinton, 1946- 

 

Dear Friends,

Tangents:

I spent the afternoon at a seminar held in Vancouver on “The Current State of the Canadian Economy,” hosted by Bloomberg and CFA/Vancouver. The keynote speaker was Dr. Farid Novin from the Bank of Canada.  In spite of recent market turmoil, Dr. Novin is optimistic on the Canadian economy and specifically B.C.’s future economic growth prospects.  He was more cautious in his comments on the current European situation.  Ken Hoffman spoke on commodities and Timothy Lee spoke on fixed income.   All agreed the current state of the  financial world is unprecedented.  Mr. Lee remarked this month marks the 40^th anniversary that Nixon severed the dollar’s to gold.   

  This year is also the 150^th birthday of the US dollar.  The FT recently wrote, ”After a stormy childhood, it spent much of its 20^th century prime as the unquestioned linchpin of global finance, particularly during the Bretton Woods era when it was tied to gold.  Today the greenback is the primary reserve currency, largely because of tradition and lack of alternatives.

  In 1861 people getting paid in the untried new paper currency initially were wary, sending its value sharply lower versus specie.  The phrase ‘not worth a Continental’ – a reference to paper dollars issued to finance the Revolutionary War eight decades earlier – showed their skepticism about fiat currency.  They feared the dollar, created to finance the Union’s war against 11 rebel states that had issued their own dollar three months earlier, would suffer the same fate.

  In fact the dollar almost vanished several times.  Yet the flowering of the US economy in subsequent decades, and the need for liquidity during panics, revived its fortunes.  The longer it hung around, them more it became accepted as ‘legal tender’.  Federal Reserve notes, a 20^th-century development, eventually replaced original greenbacks backed by the Treasury, but the name stuck….Hard-money types say that (when the dollar’s link to gold was severed) began the dollar’s decrepitude, but perhaps they are wrong…”

 Gary brought home some wonderful ripe peaches last night that picked up on his way home from work.  He was telling me that when he was a kid growing up on Ellen Street in Kitchener – there were so many kids around – and the Heller’s, who lived on Ellen Street, had a peach tree in their back yard, and cherries and…they used to steal the peaches.  And they did other things like walk on the posts that separated the lawns from the road, trying to balance themselves in a straight line, and climb up on roof tops in winter and jump off the roofs into the snow piles below.  And he was wondering aloud – now why would we do that?   I suggested it was a way to expend the pent-up energy of youth and maybe if there were more ways for kids to do stuff like that today, society wouldn’t have as many angry young people doing the stuff they’re doing today.

Photos of the day 

August 18, 2011

Egyptian children play as their family awaits Iftar, the meal to break their fast at sunset, during the holy month of Ramadan inside the Al-Azhar mosque, in Cairo, Egypt. Tara Todras-Whitehill/AP.

 

Market Commentary:

Canada

By Matt Walcoff

Aug. 18 (Bloomberg) — Canadian stocks fell, led by energy producers, after the U.S. reported bigger increases in initial jobless claims and consumer prices than most economists had forecast and Morgan Stanley cut its forecast for global growth.

Suncor Energy Inc., Canada’s largest oil and gas producer, lost 6.5 percent as crude futures sank 5.9 percent. Teck Resources Ltd., the country’s biggest base-metals and coal producer, dropped 6.7 percent as copper fell. Royal Bank of Canada, the country’s largest lender by assets, decreased 2.4 percent on concern that European banks lack sufficient capital.

The Standard & Poor’s/TSX Composite Index fell 392.9 points, or 3.1 percent, to 12,186.71.

“We haven’t seen the job numbers in the States pick up,”

Robert “Hap” Sneddon, president of money manager CastleMoore Inc. in Oakville, Ontario, and the Canadian Society of Technical Analysts, said in a telephone interview. “If we have a double- dip in the States, it’s going to affect Canada.”

The index dropped 2.8 percent this month through yesterday as oil futures lost 8.5 percent with data indicating a slowdown in the global recovery. The S&P/TSX’s August decline was the second-smallest among major developed-market stock benchmarks behind Australia’s S&P/ASX 200 as a surge in gold stocks partially canceled out retreats in other industries.

First-time unemployment claims in the U.S. totaled 408,000 last week, the Labor Department said today in Washington.

Thirty-seven of 41 economists in a Bloomberg survey had forecast a lower number. The U.S. consumer-price index rose 0.5 percent in July, the department said. Economists had estimated inflation of 0.2 percent, according to the median forecast in a Bloomberg survey.                       

Crude oil fell the most in more than a week and copper lost 1.7 percent in New York. Suncor dropped 6.5 percent to C$29.67, the lowest since April 2009. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, declined 5.1 percent to C$34.29. Cenovus Energy Inc., Canada’s fifth-biggest energy company, slumped 7.1 percent, the most since it began trading in November 2009, to C$32.92.

Trican Well Service Ltd., the country’s largest oilfield- services company, tumbled 8.3 percent, the most since July 2009, to C$21.69. Precision Drilling Corp., Canada’s biggest drilling company by market value, plunged 9.6 percent to C$12.41.

Teck decreased 6.7 percent to C$39.49. Ivanhoe Mines Ltd., which is building a copper and gold mine in Mongolia with Rio Tinto Group, retreated 6 percent to C$19.15. Sherritt International Corp., which produces base metals, coal and oil, sank 9 percent, the most since June 2009, to C$5.13.

 Forty-one of 43 S&P/TSX financial companies fell after Lars Frisell, chief economist at Sweden’s financial regulator, said it won’t take much for interbank lending to freeze and the Wall Street Journal reported that U.S. regulators were scrutinizing the American operations of Europe’s largest lenders to assess their vulnerability. Morgan Stanley cut its forecast for global growth this year to 3.9 percent from 4.2 percent.                        

 Royal Bank declined 2.4 percent to C$50.45. Toronto- Dominion Bank, Canada’s second-biggest lender by assets, lost 3.3 percent, the most since May 2010, to C$74. Manulife Financial Corp., North America’s fourth-largest insurer, decreased 6.1 percent to C$13.07.

Stocks extended their losses after the U.S. National Association of Realtors said existing-home sales fell to the lowest level since November last month and the Federal Reserve Bank of Philadelphia’s monthly index of its regional manufacturing industry dropped to the lowest since March 2009.

Semiconductor designer Mosaid Technologies Inc. soared 23 percent to a 10-year high of C$39.22 after technology-patent owner Wi-LAN Inc. made an unsolicited bid of C$38 a share for the company. In a statement, Mosaid said it is evaluating the offer. Wi-LAN decreased 5.9 percent to C$6.67.

Fertilizer producers retreated as corn and wheat futures fell. Potash Corp. of Saskatchewan Inc., the world’s largest company in the industry by market value, dropped 4.2 percent to C$51.90. Agrium Inc., a fertilizer producer and farm retailer, declined 3.9 percent to C$78.19.

Contract electronics manufacturer Celestica Inc. lost 8.5 percent, the most since February 2009, to C$7.44. North American technology stocks retreated after NetApp Inc., a maker of data- storage products, reported first-quarter sales that trailed the average estimate of analysts in a Bloomberg survey and Hewlett- Packard Co. forecast fourth-quarter earnings below its average estimates.

Open Text Corp., Canada’s largest software company, rallied6 percent to C$54 after Bloomberg News reported that  it is in talks to buy Autonomy Corp. After markets closed, HP said it will purchase the Cambridge, England-based software maker.

Yoga-wear retailer Lululemon Athletica Inc. slumped 7.8 percent to C$47.47, extending its three-day retreat to 17 percent, the most since May 2009. Urban Outfitters Inc. Chief Executive Officer Glen T. Senk said Aug. 15 he is “a little concerned” about sales at the company’s Anthropologie chain of women’s clothing stores. Executives at Abercrombie & Fitch Co., the teen-clothing retailer, said yesterday expenses will keep rising this year.

US

By Rita Nazareth

Aug. 18 (Bloomberg) — U.S. stocks tumbled, sending the Dow Jones Industrial Average down more than 400 points for the fourth time this month, on concern the global economy is slowing and speculation that European banks lack enough capital.

Caterpillar Inc. and FedEx Corp. fell at least 4.9 percent, pacing losses in stocks most-tied to the economy, as a Philadelphia-area manufacturing index sank to the lowest since 2009, jobless claims and consumer prices rose, and existing home sales slid. Bank of America Corp. and Citigroup Inc. fell more than 6 percent, following a plunge in European lenders. Hewlett- Packard Co. sank 6 percent after cutting its earnings forecast.

The Standard & Poor’s 500 Index slumped 4.5 percent to 1,140.65 at 4 p.m. in New York. All 10 groups in the S&P 500 dropped at least 1.2 percent, and only 10 stocks in the benchmark gauge advanced. The Dow fell 419.63 points, or 3.7 percent, to 10,990.58. Treasuries rallied, pushing 10-year yields to a record low. About 11.6 billion shares changed hands on U.S. exchanges as of 4:27 p.m., 44 percent more than the three-month average, according to data compiled by Bloomberg.

“It’s almost like a worldwide buyers strike,” Michael Mullaney, who helps manage $9.5 billion at Fiduciary Trust in Boston, said in a telephone interview. “There’s a general malaise on global economic activity. People continue to downgrade their expectations on growth. There’s concern about funding problems. That’s making us very nervous and we want to take risk out of portfolios at least for the immediate future.”

Today’s stock rout erased more than $600 billion of U.S. market value. The S&P 500 has tumbled 16 percent from its April 29 high, matching the retreat between April 23 and July 2, 2010, previously the biggest contraction of the bull market that began in March 2009. The decline from April 29 through Aug. 8 left the S&P 500 within 29 points of entering a bear market. European shares and the Russell 2000 Index entered a bear market last week, falling at least 20 percent from their previous highs.

“The massive exodus from risk markets reflects heightened concerns with a possible recession and the accelerated loss of trust in policymakers,” Mohamed El-Erian, chief executive officer and co-chief investment officer at Pacific Investment Management Co., the world’s biggest manager of bond funds, wrote in an e-mail. “Importantly, such worries will now be compounded by concerns about technical damage to key markets. The risk is of a rapidly deteriorating negative feedback loop of weakening fundamentals, inadequate policies and bad technicals.”

Global stocks tumbled today after Morgan Stanley cut its forecast for global growth this year, citing an “insufficient” policy response to Europe’s sovereign debt crisis, weakened confidence and the prospect of fiscal tightening. The bank estimates expansion of 3.9 percent, down from a previous forecast of 4.2 percent, according to a report dated today.

     The U.S. and Europe are “dangerously close to recession,”

Morgan Stanley analysts including Chetan Ahya said in the note.

“Recent policy errors, especially Europe’s slow and insufficient response to the sovereign crisis and the drama around lifting the U.S. debt ceiling, have weighed down on financial markets and eroded business and consumer confidence.”

 U.S. equities slumped after a report showed that the Federal Reserve Bank of Philadelphia’s general economic index plunged to minus 30.7 this month, the lowest since March 2009, from 3.2 in July. The August gauge exceeded the most pessimistic projection in a Bloomberg News survey in which the median estimate was 2. Readings less than zero signal contraction in the area covering eastern Pennsylvania, southern New Jersey and Delaware.     Government data also showed that more Americans than forecast filed applications for unemployment benefits last week, while the cost of living climbed in July by the most in four months. Separately, the National Association of Realtors said that sales of U.S. previously owned homes unexpectedly dropped in July, reflecting an increase in contract cancellations due to strict lending rules and low appraisals.

 The Morgan Stanley Cyclical Index of companies most-tied to economic growth slumped 6.8 percent as all of its 30 stocks retreated. The Dow Jones Transportation Average of 20 stocks, also considered a proxy for the economy, tumbled 6.1 percent. A gauge of homebuilders in S&P indexes declined 6.7 percent.

Caterpillar, the world’s largest construction and mining- equipment maker, slumped 4.9 percent to $83.33. FedEx, operator of the world’s biggest cargo airline, sank 5.9 percent to $74.46. PulteGroup Inc., the largest U.S. homebuilder by revenue, decreased 11 percent to $4.16.                      

 American banks tumbled, following losses in European financial shares, as Sweden’s financial regulator said his country’s lenders must do more to prepare for a worsening in Europe’s debt crisis. The KBW Bank Index of 24 stocks retreated 5.6 percent. Bank of America, the largest U.S. lender by assets, sank 6 percent to $7.01. Citigroup dropped 6.3 percent to $27.98.

Banks also slumped after the Wall Street Journal reported that American regulators are intensifying scrutiny of the U.S. arms of Europe’s largest banks amid concern about the region’s debt crisis, citing people familiar with the matter.

Hewlett-Packard dropped 6 percent to $29.51 after jumping as much as 8.3 percent earlier. The world’s largest computer maker forecast fiscal fourth-quarter and full-year earnings that missed analysts’ estimates as lackluster consumer spending failed to offset corporate purchases of printers, computers and servers. Hewlett-Packard confirmed it’s considering a spinoff for its PC business and that it has agreed to buy software maker Autonomy Corp. for $10.3 billion.      Gauges of energy and raw-material producers slid at least 5.6 percent. Oil, wheat and copper led declines in commodity markets on concern that slower economic growth will weaken demand for raw materials. Gold surged to a record as investors fled stocks for the perceived safety of the metal.

Alcoa Inc., the largest U.S. aluminum producer, decreased 6.1 percent to $11.51. Exxon Mobil Corp. fell 4.3 percent to $70.94.

Treasuries surged, pushing yields to record lows, as investors seek a refuge in the world’s safest securities on concern global growth is slowing and speculation inflation will remain subdued.

     “The bond market is indicating certainty of a recession,”

Chad Morganlander, a Florham Park, New Jersey-based money manager at Stifel Nicolaus & Co., which oversees more than $115 billion in client assets, said in a telephone interview.

“Uncertainty regarding recession risk puts S&P 500’s earnings estimates in peril of drastic cuts, repricing stock market valuations and expectations lower.”

Since the third quarter of last year, companies in the S&P 500 have earned $774.3 billion, according to data compiled by Bloomberg, pushing per-share profit to $91.44 as of yesterday from $74.97 on July 2, 2010.

 Analysts have underestimated U.S. earnings for eight straight quarters, with S&P 500 companies beating forecasts by an average of 5.1 percent in the three months ended in June. At the start of the last recession, their projections for overall profit proved 8.2 percentage points too high in the third quarter of 2007, and 33.5 points too high in the fourth. That was the biggest miss ever, according to data compiled by Bloomberg.

Most U.S. stocks declined yesterday, wiping out an earlier advance, amid speculation that the Fed may not consider another economic stimulus program to avert a recession.

Bernanke’s pledge last week to keep interest rates near zero percent until mid-2013 was “inappropriate policy at an inappropriate time,” Charles Plosser, president of the Fed Bank of Philadelphia, said yesterday in a radio interview on “Bloomberg Surveillance” with Tom Keene and Ken Prewitt.

Dallas President Richard Fisher said the central bank shouldn’t enact policy to protect stock investors. Both officials dissented from the Fed’s Aug. 9 statement.

“It’s ugly out there,” Paul Zemsky, the New York-based head of asset allocation for ING Investment Management, said in a telephone interview. His firm oversees $550 billion. “It’s a combination of concern of a potential recession and the lack of policy tools to fight it. Until people see a bottom, they are not going to buy stocks. There will be pressure on the equity market until we see a solid policy response.”

 U.S. stocks may slip to new lows in the next few weeks, setting the stage for a rally of more than 20 percent in the S&P 500, Tom DeMark, the creator of indicators meant to identify turning points in markets, said in an Aug. 16 interview. The S&P 500, which closed at 1,193.89 yesterday, will probably drop below the 11-month low of 1,119.46 set on Aug. 8 before surging above 1,363.61, its peak on April 29, according to DeMark.

U.S. and European options gauges surged. The VIX, as the Chicago Board Options Exchange Volatility Index is known, jumped 35 percent to 42.67. The VStoxx Index, which measures the cost of protecting against declines in the Euro Stoxx 50 Index, snapped a five-day losing streak. It climbed 35 percent, the most since May 2010, to 47.17. Volatility gauges in Hong Kong, South Korea, Japan and India also rose.

The selloff in U.S. stocks may be close to ending with valuations so low they could withstand a 15 percent decline in profits, said Barton Biggs, the hedge fund manager who said this month he was selling shares. The tumble in stocks shows that investors expect a slowing economy to spur analysts to lower earnings estimates, he said.

Earnings at S&P 500 companies are forecast to climb 17 percent to $99.08 a share in 2011 and 14 percent to $112.90 in 2012, estimates compiled by Bloomberg show. The index is trading at 12.4 times profits in the last 12 months, 24 percent below its five-decade average.

“It’s very possible, in the grand scheme of things, that what we’re seeing is the classic retest of the lows of 10 days ago,” Biggs said on Bloomberg Television today. “We may be in the process of making an important bottom.”

Have a wonderful day everyone.

Be magnificent!

In your veins, and in mine, there is only one blood,

The same life that animates us all!

Since one unique mother begat us all,

Where did we learn to divide ourselves?

-Kabir, 1440-1518

As ever,

Carolann

The glow of inspiration warms us;

it is a holy rapture.

            -Ovid, 43 BC- 18 AD 

 

 

 

Dear Friends,

 

Tangents: 

 

Everybody should do at least two things each day that he hates to do, just for practice. – William James, 1842-1910

 

Smiling

 

It’s interesting that we smile when we’re happy but also when we’re anxious and afraid.  We revel in our smiles when laughter descends and pull them out of the psychological drawer to fend off anxiety or if there’s no one around to give us a much-needed hug.  This makes the smile a Darwinian arrow of optimism through the DNA of humanity.  Smiling is all there is left when your breath leaks away. –Don Kieran, The Book of Idle Pleasures.

 

Piecing together a masterpiece

 

 On the surface, it’s a simple remastering of a masterpiece: The Chinese landscape scroll “Dwelling in the Fuchan Mountains,” normally kept in two pieces, has been brought together for the first time in 360 years at Taiwan’s National Palace Museum.

  Some critics call the nearly 23-foot long painting one of the Top 10 works of Chinese art, and this month, museumgoers can finally see why.  “It’s a model of the landscape paintings done since the Song Dynasty using simple, pure  strokes to express an artist’s idea or feeling,” says curator He Chuan-hsin. 

  More than 90,000 people have already braved lines to see the scroll made in 1350 by Huang Gongwang.  Back then, an adoring collector ordered that the scroll be burned at his death.  The fire claimed 7% before the rest was saved – in two pieces.  A nearly 21-foot long segment landed in the Qing Dynasty’s imperial collection and was taken to Taiwan after the Chinese civil war in 1949.  The smaller piece stayed in China.  “I should think it wouldn’t be easy at all to keep both parts separate for so long,” said museum visitor and high school teacher Yao Lifang, from China.

  Mr. Yao’s government sees the scroll as a metaphor for China and Taiwan after more than 60 years of political separation,  Beijing claims the self-ruled island as its own.  The museum near Shanghai, China, that houses the smaller piece suggested uniting the pieces in 2008 following the election of a conciliatory president in Taiwan.  The small piece returns to China in September, however, and Taiwanese are not keen to reconcile.  –Ralph Jennings, correspondent.

Photos of the day 

August 17, 2011

While it’s summer in some parts of the world…

Children play in a fountain at sunset near the beach in Tel Aviv, Israel. Baz Ratner/Reuters.

Snow-covered fields are seen in Argentina’s Patagonian resort town of San Martin de Los Andes.Patricio Rodriguez/Reuters.

Market Commentary:

Canada

By Matt Walcoff

Aug. 17 (Bloomberg) — Canadian stocks rose, led by financial and precious-metals stocks, as companies including Target Corp. and AP Moeller-Maersk A/S reported earnings that beat their average analyst estimates and gold gained.

Bank of Nova Scotia, Canada’s third-largest lender by assets, advanced 1.3 percent as bank stocks erased their losses for the month. Kinross Gold Corp., the country’s third-biggest gold producer, increased 2.4 percent as the metal climbed for a third day. Valeant Pharmaceuticals International Inc., Canada’s largest drugmaker, surged 6.8 percent.

The Standard & Poor’s/TSX Composite Index gained 87.95 points, or 0.7 percent, to 12,618.66 at 3:11 p.m. in Toronto. “The Canadian market has been pretty resilient to a lot of the fears and concerns out there, especially the problems in Europe and debt-ceiling issue in the U.S.,” Gerry Brockelsby, a money manager at Marquest Asset Management Inc. in Toronto, said in a telephone interview. The firm oversees C$250 million ($255 million). “It’s not a direct hit on our banking system.”

The S&P/TSX declined 3.2 percent this month through yesterday, the least among major developed-market stock benchmarks. Besides the rebound in bank shares, gold stocks surged on concern over U.S. and European sovereign debt.

The eight S&P/TSX banks and three largest insurers advanced. Scotiabank rallied 1.3 percent to C$54.03. Bank of Montreal, the country’s fourth-largest lender by assets, increased 1 percent to C$60.14. Manulife Financial Corp., North America’s fourth-biggest insurer, rose 1.5 percent to C$13.91.                         

  Precious-metals producers climbed as the U.S. Dollar Index slipped to an August low and the U.S. reported higher wholesale inflation for July than most economists had forecast.

Kinross gained 2.4 percent to C$16.36. Barrick Gold Corp., the world’s largest gold producer, advanced 0.8 percent to C$49.65. Lake Shore Gold Corp., which mines in Ontario, soared 5.1 percent to C$2.28 to extend its two-day surge to 17 percent, the most since 2009. The company reported a new discovery yesterday.

Valeant rallied 6.8 percent to C$41.85. The shares have rebounded 10 percent since Aug. 5, the day after the company reported second-quarter net income that trailed analysts’ forecasts, as at least seven insiders bought shares.

Progressive Waste Solutions Ltd., the waste-management company formerly known as IESI-BFC Ltd., surged 6.6 percent, the most since April 2010, to C$20.83 after saying it will buy back shares.

Neo Material Technologies Inc., which makes rare-earths and zirconium products, increased 6.4 percent to C$9.53. The shares have climbed 33 percent since Aug. 8 after closing at the lowest level relative to earnings since March 2009.

US

By Jeff Sutherland and Rita Nazareth

Aug. 17 (Bloomberg) — Most U.S. stocks fell, wiping out an earlier rally, as Dell Inc. forecast weaker sales and two Federal Reserve officials warned against applying too much stimulus to the economy. Treasuries, commodities and the Swiss franc climbed.

About 21 stocks retreated for every 20 that advanced on U.S. exchanges. The Standard & Poor’s 500 Index rose 0.1 percent to 1,193.88 at 4 p.m. in New York, after jumping as much as 1.3 percent and falling as much as 0.7 percent. The yield on 30-year Treasury bonds dropped 11 basis points after stocks erased their rally. The S&P GSCI index of 24 commodities advanced 1 percent as oil jumped 1.1 percent. The franc strengthened against most of its 16 major peers.

Technology shares fell the most among S&P 500 groups, losing 0.9 percent as Dell said slower spending on PCs and consumer technology crimped its sales forecast. Charles Plosser and Richard Fisher, two Fed officials who dissented from the central bank’s latest policy statement, spoke out against unnecessary stimulus measures. The Swiss National Bank said it will expand liquidity, refraining from tougher moves such as adopting a currency target.

“People started to reevaluate the odds of a QE3,” James Paulsen, chief investment strategist at Minneapolis-based Wells Capital Management, which oversees about $340 billion, said in a telephone interview. “There are a lot of people that have been saying we’re going to get a QE3,” he said, using a nickname for a third round of quantitative easing. “The fact that Fisher came out today with a very explicit comment brought some selling in. It reduces the odds of a QE3. Dell’s figures are important because they say something about the consumer.”                      

 The S&P 500 dropped 1 percent yesterday after rallying 7.5 percent over the three prior days amid a decline in jobless claims, an increase in retail sales and better-than-estimated profits. The S&P 500 is down 13 percent from April 29 on concern about Europe’s debt crisis and an economic slowdown.

Dell, the second-largest personal-computer maker, sank 10 percent. Lackluster demand from consumers and market-share gains by Apple Inc. weighed on its results, offsetting stronger corporate orders for server computers. Renewed concerns that the economy will fall back into recession also may be curbing spending.

Rival Hewlett-Packard Co. dropped 3.7 percent. The biggest personal-computer maker was cut to “market perform” from “outperform” at BMO Capital Markets. Apple fell less than 0.1 percent while Microsoft Corp. lost 0.4 percent. Target gained 2.4 percent. The second-largest U.S. discount retailer said profit jumped 3.7 percent in the second quarter on higher sales.

Per-share earnings increased 17 percent among the S&P 500 companies that have released quarterly results since July 11, according to data compiled by Bloomberg. About three-quarters of the companies have topped the average analyst profit forecast, the data show.

Stocks reversed earlier gains on investor speculation that the Fed may not consider another economic stimulus program to avert a recession. The Fed finished its second round of so- called quantitative easing at the end of June. The program helped propel a rally of as much as 28 percent in the S&P 500 after Fed Chairman Ben S. Bernanke foreshadowed the plan on Aug. 27, 2010.

Bernanke’s pledge last week to keep interest rates near zero percent until mid-2013 was “inappropriate policy at an inappropriate time,” Plosser, president of the Fed Bank of Philadelphia, said today in a radio interview on “Bloomberg Surveillance” with Tom Keene and Ken Prewitt. Dallas President Fisher said the central bank shouldn’t enact policy to protect stock investors. Both officials dissented from the Fed’s Aug. 9 statement.                        

Stocks rose earlier after producer prices advanced 0.2 percent in July, following a 0.4 percent drop in June, the Labor Department said today. Economists in a Bloomberg survey forecast a 0.1 increase. The report showed the cost of crude goods dropped in July for a third consecutive month, led by declining petroleum and food prices.

Slowing sales and the drop in raw-materials mean companies will be less likely to raise prices, which may give Fed policy makers more room to act to spur growth after the world’s largest economy almost stalled. Bernanke may announce policy intentions at a conference in Jackson Hole, Wyoming, on Aug. 26.

The extra yield Treasury investors get to hold 30-year bonds instead of two-year notes shrank to the narrowest in a week on speculation the U.S. economic recovery is stalling.

The difference between yields on two-year notes and 30-year bonds fell to 3.37 percentage points at 2:45 p.m. in New York, from 3.48 yesterday. The spread was the narrowest since Aug. 10, when it was the smallest since October 2010. 

 The yield on 10-year Treasury notes slipped six basis points to 2.16 percent.

Crude rose to the highest level in almost two weeks as the dollar fell against the euro, increasing the appeal of dollar- denominated commodities as an investment. Futures climbed as much as 2.7 percent before trimming their advance to settle 1.1 percent higher, following an unexpected increase in U.S. inventories.

Gold advanced to a record for the second day, gaining 0.5 percent to settle at $1,793.80. Copper increased. Wheat futures climbed 0.8 percent to a two-month high on speculation that dry weather in the U.S. Great Plains will cut acreage of winter crops set to be planted next month.

In Europe, Carlsberg A/S sank 17 percent as the world’s fourth-largest brewer cut its profit forecast because of faltering sales in Russia. Deutsche Boerse AG lost 5.8 percent and London Stock Exchange Group Plc fell 2.8 percent after French President Nicolas Sarkozy said France and Germany will propose a financial-transaction tax.

German Chancellor Angela Merkel and Sarkozy rejected an expansion of a 440 billion-euro ($633 billion) rescue fund yesterday and rebuffed calls for joint euro borrowing.

The MSCI Emerging Markets Index rose 0.5 percent. Russia’s Micex Index added 1.9 percent, and India’s Sensex Index climbed 0.7 percent. Dell suppliers in Taiwan slid, helping to push the Taiex Index down 0.7 percent. Quanta Computer Inc. sank 4.3 percent and Compal Electronics Inc. dropped 4 percent.

The franc rose against most of its major peers. The currency advanced 0.9 percent against the dollar and 0.6 percent versus the euro. The Swiss National Bank said it will expand banks’ sight deposits to 200 billion francs ($253 billion) from 120 billion francs. It will also continue to repurchase outstanding SNB bills and use foreign-exchange swap transactions.

The yield on two-year Greek notes rose 55 basis points to 34.98 percent. Portuguese two-year securities yielded 11.85 percent, up eight basis points from yesterday. The cost of insuring sovereign debt increased, with the Markit iTraxx SovX Western Europe Index of credit-default swaps linked to 15 governments climbing one basis point to 278 basis points.

Have a wonderful evening everyone.

Be magnificent!

To love is to understand and feel that the other person is different.

-Swami Prajnanpad, 1891-1974

As ever,

Carolann

Stop worrying  

nobody gets out of this world alive.

          -Clive James, 1939-