Month: September 2011

 

Dear Friends,

Tangents:

I was with my inter-disciplinary professional  group for awhile yesterday working on a family business case we’re involve with and one of the persons in this group is  a lawyer who practices in Vancouver, and  who happens to be Jewish.  He brought cookies to the meeting and said we needed to wind up just after 4 PM because he had to be with family for Rosh Hashana.  We talked briefly about the night of festivities and  lots of food he would be enjoying with his family. 

I forgot to say last night Happy New Year to all my Jewish clients and friends.  May it be a wonderful year.  Reflection begins today followed by the day of atonement next week, Yom Kippur.

Curt Wahlberg wrote today a piece on hope for  a kinder world, something for us to reflect upon: 

Have you ever felt pushed around?  Or criticized?  Or maybe you’ve been on the other side of things and have been too pushy or critical.

My experience suggests that criticism and unkindness are a kind of contagion that affects people in different ways at different times.  Whether you’re the giver or the receiver, criticism, at the least, deprives you of your peace…..We can’t climb higher because of another’s fall.  Nor can we fall lower because of another’s climb.  So there’s no true basis for subjugating another or for feeling imposed upon…

Photos of the day 

September 29, 2011

A Jewish man blows a shofar, Ram’s horn, while others pray as they perform Tasklikh, a Rosh Hashanah ritual for casting sins upon the waters, in front of the Mediterranean sea in Ashdod, Israel. Ariel Schalit/AP.

The Long March II-F rocket, loaded with China’s unmanned space module Tiangong-1, lifts off from the launch pad in the Jiuquan Satellite Launch Center in Gansu province, China. Petar Kujundzic/Reuters.

Market Commentary:

Canada

By Kaitlyn Kiernan

Sept. 29 (Bloomberg) — Canadian stocks advanced, rebounding from yesterday’s 2 percent drop, as financial companies and energy producers climbed after U.S. economic data eased concern that global growth will slow.

Bank of Nova Scotia, Canada’s No. 3 lender, rose 2.4 percent. Cenovus Energy Inc., the country’s fifth-biggest energy company, increased 3.4 percent as crude oil surged after the U.S. said the economy grew faster than previously estimated in the second quarter and jobless claims fell last week. Research In Motion Ltd. lost 3.2 percent, falling for a second day after Amazon.com Inc. announced a competing tablet computer.

The Standard & Poor’s/TSX Composite Index rose 100.45 points, or 0.9 percent, to 11,686.32, widening its advance this week to 1.9 percent.

In the U.S., “the underlying economic numbers were much better than expected, and the general mood is so pessimistic it’s not going to take much for there to be a rally in this market,” Terry Shaunessy, president of Shaunessy Investment Counsel in Calgary, said in a telephone interview. The firm manages about C$150 million ($146 million).

The S&P/TSX has fallen 7.5 percent in September, poised for a seven-month losing streak that’s the longest since 1984.

Energy and raw-materials companies, which make up 46 percent of Canadian stocks by market value, have declined on concern over demand as Europe struggled to contain its debt crisis. This month’s slump is also the biggest since October 2008.

The U.S. economy expanded at a 1.3 percent pace in the second quarter, Commerce Department figures showed, higher than 1 percent in the previous estimate. Jobless claims fell 37,000 last week to 391,000, the fewest since April, according to Labor Department data.

The S&P/TSX Financials Index advanced 1.8 percent, the most among 10 industries, as European lenders soared. Bank of Nova Scotia gained 2.4 percent to C$53.70. Manulife Financial Corp., North America’s fourth-biggest insurer, surged 5 percent to C$12.30. The company named Jacqui Allard president of Manulife Asset Management Canada. The Toronto-Dominion Bank, the country’s second-largest lender by assets, increased 2 percent to C$75.

Canadian energy companies advanced as crude oil gained 1.1 percent after the U.S. GDP report beat economists’ expectations.

New York futures are down 7.5 percent this month and have dropped 14 percent since the end of June, heading for the biggest quarterly loss since the last three months of 2008.

Cenovus Energy advanced 3.4 percent to C$33.22. Suncor Energy Inc., Canada’s biggest oil and gas producer, jumped 2.4 percent to C$27.71. Canadian Natural Resources Ltd., the country’s second-biggest energy company by market value, rose 2.4 percent to C$31.52.

Natural gas pipeline operators pared the advance in energy group after the U.S. Energy Department said reported the biggest inventory gain in the heating fuel in more than two years. U.S. inventories rose 111 billion cubic feet, or 3.5 percent, to 3.312 trillion in the week ended Sept. 23, the department said. Stockpiles had been expected to rise 103 billion, the average of analyst estimates compiled by Bloomberg.

 TransCanada Corp., the owner of the country’s largest pipeline system, erased 0.7 percent to C$42.42. Penn West Petroleum Ltd., a western Canadian energy producer, declined 1.8 percent to $15.72.

Petrobank Energy and Resources Ltd., a western Canadian oil and gas producer, lost 20 percent to C$6.59 after saying it suspended operations of is Conklin demonstration project after finding evidence of combustion gas migration.

Research In Motion fell 3.2 percent to C$21.94 after Collins Stewart said the BlackBerry maker might halt production of its PlayBook tablet. The company called the rumor “pure fiction” in an e-mailed statement to Bloomberg.

US

By Nikolaj Gammeltoft

Sept. 29 (Bloomberg) — U.S. stocks rose, rebounding from a 1 percent decline in the Standard & Poor’s 500 Index, as lower- than-estimated claims for unemployment benefits and helped offset losses by consumer and technology shares.

Bank of America Corp. and JPMorgan Chase & Co. climbed at least 3 percent as European lenders soared after German lawmakers backed an enhanced euro-region rescue fund. General Electric Co. gained 2.7 percent, while Hewlett-Packard Co. added 2.5 percent as jobless claims fell more than forecast and the U.S. economy’s second-quarter expansion topped projections. Advanced Micro Devices Inc. slid 14 percent after the chipmaker cut its forecast.

The S&P 500 added 0.8 percent to 1,160.40 at 4 p.m. New York time after rallying as much as 2.2 percent. The Dow Jones Industrial Average added 143.08 points, or 1.3 percent, to 11,153.98. The Nasdaq Composite Index fell 0.4 percent as Apple Inc. declined 1.6 percent, dropping for a fourth straight day.

“We got two excellent numbers,” Philip Orlando, the New York-based chief equity market strategist at Federated Investors Inc., said about the economic reports in a phone interview. His firm oversees about $350 billion. “It suggests that we are coming out of the soft patch and not spiraling into a double-dip recession.”

Two industries that have beaten the S&P 500 in the third quarter, computer and software makers as well as companies reliant on discretionary consumer spending, fell the most today.

The S&P 500 Information Technology Index lost 0.4 percent, bringing its two-day drop to 1.8 percent. Among its constituents, Apple, which rose 16 percent in the quarter, has dropped 5.5 percent since Sept. 20, while Google Inc., up 4.2 percent for the quarter, slid 2.2 percent in the last two days.

Among consumer stocks, Tiffany & Co. declined 6.9 percent today. Wynn Resorts Ltd. fell 7.3 percent, and Netflix Inc. tumbled 11 percent. Netflix, the movie rental service that has rallied 194 percent since March 9, 2009, plunged 57 percent in the third quarter, the second-biggest retreat in the S&P 500 behind Alpha Natural Resources Inc., which decreased 59 percent.

“They’re shooting the last bastions of outperformance, because consumer stocks have actually done really well,” said Dan Veru, who oversees $3.3 billion as chief investment officer at Fort Lee, New Jersey-based Palisade Capital Management LLC.

“They’re selling the winners that have exposure outside of the U.S.”

Stocks worldwide are headed for their worst quarterly performance since the end of 2008 on concern Europe’s debt crisis will trigger a global recession. The MSCI All-Country World Index has lost 16 percent this quarter and trades at 11.9 times reported earnings, near the lowest level since March 2009. The S&P 500 has lost 12 percent since the end of June.                       

Stock futures extended gains today as applications for jobless benefits dropped by 37,000 in the week ended Sept. 24 to 391,000, the fewest since April, Labor Department figures showed. Economists forecast 420,000 claims, according to the median estimate in a Bloomberg News survey. An agency official said the data probably reflected a “slight mistiming” in the seasonal factors used to modify the figures.

A separate report showed the U.S. economy grew at a 1.3 percent pace in the second quarter, faster than estimated last month and helped by exports and spending on services.

“The U.S. economic data was better than expected,” Michael Gibbs, Memphis, Tennessee-based chief equity strategist at Morgan Keegan Inc., said in a telephone interview. His firm oversees about $70 billion in client assets. “The market wants Europe to show us, not tell us, what’s going to happen.”

Global equities climbed earlier as Germany’s lower house of parliament approved the expansion of the European bailout fund.

The bill’s passage by Europe’s biggest economy allows euro-area officials to weigh further measures to bolster Greece and stem investor concern that helped end the biggest three-day rally in 16 months for European stocks.

“Our markets have fairly well priced in all but the most draconian of scenarios,” Wilbur Ross, the billionaire chairman of private-equity firm WL Ross & Co., said today in an interview on Bloomberg Television’s “In the Loop” with Betty Liu.

“Unless something really calamitous happens” such as a default of a larger European country like Spain or Italy, “short of that, I think we’ve pretty well priced things in.”

The Morgan Stanley Cyclical Index of companies most-tied to the economy climbed 1.5 percent. The Dow Jones Transportation Average, also a proxy for the economy, added 2.1 percent. General Electric gained 2.7 percent to $15.86, and Hewlett- Packard advanced 2.5 percent to $23.78.                    

Financial stocks in the S&P 500 rallied 2.8 percent, the most among 10 industries. Bank of America climbed 3.1 percent to $6.35, while JPMorgan added 3 percent to $31.39.

Harleysville Group Inc. surged 87 percent to $58.96. The insurer agreed to be acquired by Nationwide Mutual Insurance Co., the eighth-largest U.S. personal auto insurer, for $60 a share in cash.

Advanced Micro Devices sank 14 percent, the most in the S&P 500, to $5.31. The second-largest maker of processors for personal computers reduced its forecasts for third-quarter sales and profitability, citing manufacturing glitches.

Netflix dropped 11 percent to $113.19 for the second- biggest loss in the S&P 500. The online and mail-order video service fell on concern about competition with Amazon.com Inc. and Microsoft Corp. The streaming business faces competition from Amazon, which unveiled a tablet computer yesterday that’s designed to work with its own video service. Microsoft plans to offer online pay television service from Comcast Corp. and Verizon Communications Inc. through its Xbox Live service, people with knowledge of the situation said.

Have a wonderful evening everyone.

Be magnificent!

For me, nonviolence is not a mere philosophical principle.

It rules my life.  It is the rule and breadth of my life.

It is a matter not of the intellect but of the heart.

 

-Mahatma Gandhi, 1869-1948

As ever,

Carolann

I shut my eyes in order to see.

       -Paul Gauguin, 1848-1903

 

 

Dear Friends,

Tangents:

Still Life with Basket of Apples, Paul Cézanne, 1890-94  

I read a wonderful article today on Apple entitled The Apple Effect, The Genius Behind The Company’s Success – And What That Could Teach Corporate America And Perhaps The Nation by Alan M. Webber.  Webber first met Steve Jobs back in 1991 when he was a managing editor of the Harvard Business Review.  When he met him, Jobs said to him “That was a great article….One of the best things I’ve ever read.  It’s absolutely right.  It’s not computers.  It’s computing.”  He was talking about an article that appeared in a 1991 issue of HBR, a provocative piece that came at a time when the United States was nervously watching Japanese companies win more than 40% of the American market for laptops, assert leadership in the production of memory chips, and rival US companies in the production of supercomputers.  Don’t worry, the piece argued.  The future isn’t in computers.  It’s in computing.  “Defining how computers are used, not how they are manufactured, will create real value – and thus market power, employment, and wealth – in the decades ahead.  A computer company is the primary source of computing for its customers.”  The future, in other words, is a verb, not a noun.

The article went on to praise the iconoclastic, rebellious culture that Jobs nurtured at Apple.

What I wanted to share with you tonight is the poignant ending of the article which resonates so well in these times:

“Change is in the air – challenges from companies and countries around the globe, in a world where business, politics, society all seem to be changing rapidly, unpredictably, simultaneously.  It is a global strategic inflection point we’re all struggling to adapt to.

Can Apple offer some useful ways of thinking and working differently?  Ways that apply to these challenging times?

There’s no formula, but there are Apple lessons:

Keep innovating and evolving.  Keep raising the bar on yourself and your own possibilities.  Keep learning and seeking.  Keep obsessing about how to be your own best self.   And most important, always remember that it’s better to be a verb than a noun.”

Market Commentary:

Canada

By Kaitlyn Kiernan

Sept. 28 (Bloomberg) — Canadian stocks fell for the first time in three days as copper and energy companies slipped on a decline in U.S. durable goods orders and concern that Europe’s debt crisis will linger.

Suncor Energy Inc., Canada’s biggest oil and gas producer, slipped 4.7 percent as crude headed for its biggest quarterly drop since 2008. Teck Resources Ltd., Canada’s biggest base- metals and coal producer, sank 5.3 percent as copper lost 2.3 percent. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer, slid 4.9 percent as corn and wheat slumped.

The Standard & Poor’s/TSX Composite Index lost 235.22 points, or 2 percent, to 11,585.87.

“There is a wait-and-see mentality,” said Bob Decker, a money manager at Aurion Capital Management in Toronto who oversees about C$5.5 billion ($5.4 billion). “There is still concern about deceleration in the economy and that the commodity shake-ups have not run their course.”

The S&P/TSX had advanced 3.1 percent the past two days as mining and energy companies gained on signs that European policy makers were intensifying efforts to contain the region’s debt crisis.

The European Commission is resisting a push by as many as seven euro-area countries to impose bigger writedowns on banks’ holdings of Greek government debt than those agreed at a July 21 summit, a European official said today.

Canadian energy companies dropped after crude oil fell 3.8 percent on the discord among European leaders and a report that U.S. stockpiles increased last week to an eight-week high.

Natural gas sank 1.8 percent as drilling in the U.S., the biggest consumer of the nation’s gas output, increased supplies of the fuel and forecasts of moderating weather that may reduce demand.

Suncor Energy erased 4.7 percent to C$27.05. Penn West Petroleum Ltd., a western Canadian energy producer, decreased 3.3 percent to C$16. Encana Corp., the country’s largest natural gas producer, slid 4 percent to C$20.21, its lowest value since February 2005. Petrobank Energy and Resources Ltd., a western Canadian oil and gas producer, lost 12 percent to C$8.25, its lowest price since October 2006.

All 10 of the industry groups in the S&P/TSX fell, led by the S&P/TSX Materials Index, which lost 3.9 percent to erase this week’s gains. Base metal producers sank as copper declined more than 5 percent amid concern that a slowing global economy will reduce demand for the metal. A report showed orders for U.S. durable goods fell 0.1 percent in August after rising 4.1 percent in July.

Teck Resources Ltd. slipped 5.3 percent to C$30.40. Mercator Minerals Ltd., which mines copper and molybdenum, dropped 11 percent to C$1.51. Taseko Mines Ltd., which produces copper in British Columbia, declined 6.4 percent to C$2.76, its lowest value since October 2009.

Fertilizer producers sank as corn and wheat futures fell on speculation demand for food and animal feed will drop as the U.S. economy slows and Europe’s debt crisis reduces consumer confidence. Corn fell 1.5 percent after rising 2.2 percent the prior two sessions. Wheat fell 3 percent on signs that slowing economies and ample global supplies are eroding demand.

Potash Corp. dropped 4.9 percent to C$47.05, the lowest since December 2010. Agrium Inc., a fertilizer producer and farm retailer, declined 3.8 percent to C$73.25, its lowest price in more than a year.

US

By Whitney Kisling and Inyoung Hwang

Sept. 28 (Bloomberg) — U.S. stocks declined, halting a three-day rally for the Standard & Poor’s 500 Index, amid growing concern that European leaders are divided over how to handle Greece’s debt crisis.

All 10 industry groups in the S&P 500 fell at least 0.6 percent, with companies most-tied to economic growth dropping the most. Dow Chemical Co. and Alcoa Inc. slid at least 4.9 percent as commodities tumbled. Morgan Stanley and Bank of America Corp. lost more than 4.9 percent, pacing declines among financial shares. Amazon.com Inc. rose 2.5 percent after the company launched its Kindle Fire tablet computer, taking aim at Apple Inc.’s bestselling iPad.

The S&P 500 lost 2.1 percent to 1,151.06 at 4 p.m. New York time, after rising as much as 0.8 percent earlier and rallying 4.1 over the previous three days. The Dow Jones Industrial Average fell 179.79 points, or 1.6 percent, to 11,010.90 today, with all 30 stocks retreating.

“Europe is the issue that is first and foremost in everyone’s mind, so any news that comes out on that does have a strong impact on the market,” Peter Jankovskis, who helps manage about $2.6 billion at Oakbrook Investments in Lisle, Illinois, said in a telephone interview. “Any weakness there is going to be a drag worldwide.”

A four-day rout last week erased $1 trillion from U.S. equities amid concern Greek insolvency is inevitable and Europe can’t contain the damage. The decline left the S&P 500 trading at 12.4 times earnings in the past 12 months, 4.4 percent below its average valuation at the lowest point during the last nine bear markets, Bloomberg data shows.

Stocks fell today as an official said the European Commission is resisting a push to impose bigger writedowns on banks’ holdings of Greek government debt than those agreed at a July 21 summit. The commission opposes ideas that are being floated by some government officials to get banks to accept bigger so-called haircuts and doesn’t want to have talks about any such attempt, the official said on condition of anonymity because the deliberations are private.

Italian and Spanish financial market regulators extended temporary bans on short selling of financial shares that were introduced last month in a bid to stem market volatility, the European Securities and Markets Authority said.

 The S&P 500 had climbed over the past three days amid optimism that euro-area nations were making progress on plans to tame the region’s government debt crisis.                      

“The market is on pins and needles over the whole European debt problem,” Thomas Garcia, head of equity trading at Santa Fe, New Mexico-based Thornburg Investment Management Inc., which oversees about $75 billion, said in an e-mail. “Every new rumor or little piece of news moves the market in one direction or the other a percent or two. It’s frustrating!”

Stocks rose earlier today as a Commerce Department report showed orders for U.S. capital goods climbed in August by the most in three months, a sign business investment continues to support the recovery. Bookings for goods like computers and communications gear, excluding military hardware and aircraft, climbed 1.1 percent, the most since May. Demand for total durable goods dropped 0.1 percent, less than forecast.

The S&P 500 has been trading between about 1,100 and 1,300 since the beginning of August. The benchmark gauge for U.S. equities climbed as high as 1,363.61 on April 29, before starting a decline of as much as 18 percent through August. The index is down 8.5 percent for the year. Strategists estimate it will climb to 1,305 by year-end, representing a 13 percent advance, according to the average in a Bloomberg survey.                    

Raw-material companies fell the most among 10 groups in the S&P 500 today, tumbling 4.5 percent. Energy shares lost 3 percent as a group, as the Thomson Reuters/Jefferies CRB Index of 19 commodities fell 2.5 percent. The Morgan Stanley Cyclical Index of companies most-tied to the economy lost 3.3 percent.

The Dow Jones Transportation Average, a proxy for the economy, lost 2.9 percent. Alcoa fell 4.9 percent to $9.97. Dow Chemical, the largest U.S. chemical maker, slid 6.2 percent to $23.76.

The KBW Bank Index lost 3.5 percent, with Morgan Stanley falling 5.4 percent to $14.16. Bank of America slid 4.9 percent to $6.16, for the largest decline today for the Dow. A group of S&P 500 financial shares have plunged 27 percent since the April high, the biggest drop among the 10 industry groups. Utilities companies have been the only group to gain, adding 1.2 percent in the same period.

Amazon.com shares rose 2.5 percent, the second-most in the S&P 500, to $229.71. The world’s largest online retailer introduced its Kindle Fire, a device that’s smaller and less than half the price of Apple’s iPad. Chief Executive Officer Jeff Bezos is betting he can leverage Amazon’s dominance in e- commerce to pose a challenge to the iPad, after tablets from rivals such as Hewlett-Packard Co. and Research In Motion Ltd. have fallen short.

Jabil Circuit Inc., gained the most in the benchmark index, adding 8.4 percent to $18.84. The U.S. contract electronics manufacturer forecast first-quarter earnings will be at least 62 cents a share, exceeding the average analyst projection, data compiled by Bloomberg show.

Have a wonderful evening everyone.

Be magnificent!

We do not progress from error to truth, but from truth to truth.

Thus we must see that none can be blamed for what they are doing, because they are,

at this time, doing the best they can.  We learn only from experience.

 

-Swami Vivekananda, 1863-1902

As ever,

Carolann

In reality, humility means nothing other than

complete honesty about yourself.

        – Emma Thompson, 1959-

 

 

Dear Friends,

Tangents:

 

September 26^th: Birthday, T.S. Eliot, b. 1888.

We shall not cease from our exploration, and at the end of all our exploring,

we shall arrive where we started and know the place for the first time. –T.S. Eliot, 1888-1965

 

Autumn officially arrived on Friday….in the northern hemisphere, the autumn equinox signals the gathering of the harvest; we can enjoy Earth’s bounty together.  We must accustom ourselves to the days growing shorter, prepare for winter.

Photos of the day

September 26, 2011

Wales supporters pose for a photo before their Rugby World Cup Pool D match against Namibia at Stadium Taranaki in New Plymouth, New Zealand.Nigel Marple/Reuters.

Antonio Banderas and Salma Hayek, voice actors for the animated movie Puss In Boots, gesture to a cat during a photocall to promote their film in Moscow. Ivan Burnyashev/Reuters.

Market Commentary:

Canada

By Kaitlyn Kiernan

Sept. 26 (Bloomberg) — Canadian stocks advanced the most in more than a month as banks and commodity futures gained on speculation Europe will act to stem its debt crisis.

Royal Bank of Canada, the country’s largest lender by assets, advanced 4.1 percent amid rumors that the European Central Bank would create a European version of the U.S.’s Troubled Asset Relief Program, cut interest rates and restart covered-bond purchases. Ivanhoe Mines, which is building a copper and gold mine in Mongolia with Rio Tinto Group, plunged 9.2 percent after the government of Mongolia sought to increase its stake in the project. Suncor Energy Inc. rose 4.5 percent after natural gas futures advanced as warmer-than-normal weather increased demand for the power-plant fuel.

The Standard & Poor’s/TSX Composite Index gained 244.32 points, or 2.1 percent, to 11,707.19, the most since Aug. 23.

The index swung between gains and losses before rallying after 2:30 p.m.     “The market didn’t really digest that rumor until this afternoon when it finally tuned into the sense of urgency in Europe,” Barry Schwartz, a money manager at Baskin Financial Services Inc., said in a telephone interview. The firm oversees C$420 million ($410 million).

Canada’s stock benchmark slumped 6.5 percent last week, the most since March 2009, as economic data from Europe, North America and China were more indicative of a slowdown than most economists had forecast in Bloomberg surveys. Crude oil declined 9.2 percent while gold sank 9.6 percent and silver plunged 26 percent as investors sold commodities to cover losses in other assets. Energy and raw-materials companies make up 47 percent of Canadian stocks by market value, according to Bloomberg data.

Canadian banks advanced amid speculation that the European Central Bank may restart covered-bond purchases next week and cut interest rates next month. The reintroduction of 12-month loans to banks will also be discussed at the ECB’s Oct. 6 policy meeting, a euro-region central bank official said, who spoke on condition of anonymity because the information is confidential.

Royal Bank of Canada climbed 4.1 percent to C$47.98. Toronto-Dominion Bank, the country’s second-largest lender by assets, advanced 4.1 percent to C$73.85. Bank of Montreal, Canada’s fourth-largest lender by assets, rose 4.2 percent to C$58.29. The S&P/TSX Energy Index rose 2.7 percent to end a six-day drop as crude futures advanced.

Suncor Energy, the country’s biggest oil and gas producer, climbed 4.5 percent to C$27.66. Canadian Natural Resources Ltd., the country’s second-biggest energy company by market value, jumped 1.7 percent to C$31.55. Talisman Energy Inc., an oil and gas producer with operations in North America, gained 2.5 percent to C$13.69.

Gold fell, capping the biggest three-session slump since 1983, and silver closed below $30 an ounce on investor sales to cover losses in other assets.  Extorre Gold, which explores in Argentina, lost 6.1 percent to C$7.30. Detour Gold Corp., the company exploring for gold in northern Ontario, decreased 2.7 percent to C$31.17.

Tahoe Resources slid for a third day, falling 8 percent to C$15.57. Michael Gray, an analyst at Macquarie Group Ltd., lowered his 12 month price estimate on the shares to C$23 from C$27.

Ivanhoe Mines erased 9.2 percent to C$15. The company is half-way through completion on a project in Mongolia that will be one of the world’s five-biggest copper mines, according to Rio Tinto Group.

The government of the Asian country is seeking to boost its stake in the mine to 50 percent from 34 percent, Dashdorj Zorigt, Mongolia’s minerals minister, told reporters at Oyu Tolgoi yesterday. Such an increase is permitted only after 30 years, according to a summary of the $10 billion project agreement from London-based Rio, which said the new proposal may alarm foreign investors.

US

By Stephen Kirkland and Rita Nazareth

Sept. 26 (Bloomberg) — Stocks rallied, rebounding from last week’s decline, and Treasuries retreated as European officials discussed plans to tame the region’s debt crisis.

Commodities reversed losses and the Dollar Index retreated.

The Standard & Poor’s 500 Index jumped 2.3 percent to 1,162.93 according to preliminary closing figures at 4 p.m. in New York. Ten-year U.S. Treasury note yields increased six basis points to 1.90 percent, rising from near a record low. The S&P GSCI Index of commodities gained 0.2 percent, erasing an earlier drop of as much as 2.6 percent, as oil snapped a three-day slump. The Dollar Index slipped 0.4 percent, while the euro weakened against 13 of 16 major peers.

The European Central Bank is likely to debate restarting covered-bond purchases and may discuss interest-rate cuts to ease funding strains, a euro-region central bank official said.

German Chancellor Angela Merkel’s comments that leaders must erect a firewall around Greece prompted speculation about a European version of the U.S.’s Troubled Asset Relief Program after finance chiefs including U.S. Treasury Secretary Timothy F. Geithner urged more efforts to prevent contagion.

“Europe will come up with something,” Jeffrey Saut, chief investment strategist at Raymond James & Associates in St. Petersburg, Florida, said in a telephone interview. His firm manages $278 billion. “I don’t think we’re going into a recession. Now is the time to be bullish, not the time to panic. The lows for the year are in.”

The S&P 500 and Dow Jones Industrial Average rose for a second day. The Dow rebounded following last week’s 6.4 percent drop, its biggest since October 2008. Financial and energy shares helped lead gain, with JPMorgan Chase & Co. and Exxon Mobil Corp. pacing the advance. Class B shares of Berkshire Hathaway Inc., billionaire investor Warren Buffett’s company, climbed on plans to buy back stock.

Boeing Co. rose as a delivery of the 787 Dreamliner ended more than three years of delays on the world’s first jetliner with a fuselage made of carbon-fiber composites.

Last week’s rout erased $1 trillion from U.S. equities, and wiped out about $3.6 trillion globally, amid concern Europe can’t contain the damage from its government-debt crisis. The S&P 500 slumped 17 percent between April 29 and Sept. 23, leaving it trading at 12.4 times earnings in the past 12 months, 4.4 percent below its average valuation at the lowest point during the last nine bear markets, according to data compiled by Bloomberg.                       

The S&P 500 is down more than 12 percent since the end of June, poised for its worst quarterly performance since 2008.

Stocks are having the worst quarter on record relative to U.S. Treasuries and gold, which may force investors to buy equities to rebalance their allocations, JPMorgan Chase & Co.’s Marko Kolanovic said. U.S. and emerging-market equities have returned 43 percentage points less, the most during a quarter since at least 2002, according to data compiled by Kolanovic, whose analysis is based on a model portfolio composed of stocks, bonds and gold

A gauge of U.S. homebuilder stocks rose 1.4 percent even after new-home purchases in the U.S. slid in August to a six- month low as the biggest drop in prices in two years failed to lure buyers away from even less expensive distressed properties, a Commerce Department report showed. Another report showed U.S. economic activity fell in August. The Federal Reserve Bank of Chicago’s national index, which draws on 85 economic indicators, was minus 0.43 in August versus 0.02 in July. A reading below zero indicates below-trend-growth in the national economy.

Equity-options show traders expect Europe’s debt crisis to engulf the U.S. as contracts to protect against losses in the S&P 500 erase the gap with the euro region’s benchmark gauge.

The Chicago Board Options Exchange Volatility Index rose 33 percent last week to 41.25, bringing it within seven points of the 29-month high reached Aug. 8. The VIX, as the gauge is known, eliminated more than half the discount to Europe’s VStoxx Index in the past week, cutting it to 7.3 points from 15 on Sept. 12, data compiled by Bloomberg show.

About five stocks gained for every two that fell in the Stoxx Europe 600 Index, which rebounded 1.9 percent after dropping 6.1 percent last week. BNP Paribas SA, UniCredit SpA and Deutsche Bank AG, the biggest lenders in France, Italy and Germany respectively, rose at least 4 percent.

ECB Executive Board member Lorenzo Bini Smaghi said the ECB will do whatever is necessary to supply sufficient funds to European banks.

“For liquidity, we are there” and “we are ready to do what is needed,” Bini Smaghi said in New York today. “‘‘We need to reassure the markets.’’ He also said the central bank doesn’t expect a default by Greece.

The ECB is likely to debate restarting covered-bond purchases and more measures to ease monetary conditions next week, a euro-region central bank official said. Reintroduction of 12-month loans to banks will also be discussed at the ECB’s Oct. 6 policy meeting, said the person, who spoke on condition of anonymity because the information is confidential. Interest- rate cuts are likely to be discussed, though they are not on the current agenda, the official said.

The yield on the Greek 10-year bond rose 43 basis points, driving the difference in yield with benchmark German bunds 35 basis points higher to 22.23 percentage points. Spanish 10-year yields slipped five basis points to 5.16 percent, while Italy’s were little changed and rates on similar-maturity U.K., French and German debt increased.                        

A benchmark gauge of U.S. corporate credit risk fell for a second day. The Markit CDX North America Investment Grade Index, which typically falls as investor confidence improves and rises as it deteriorates, declined 2.7 basis point to a mid-price of138 basis points, according to index administrator Markit Group Ltd.

The cost of insuring against default on European sovereign debt also retreated. The Markit iTraxx SovX Western Europe Index of swaps on 15 governments fell 1.7 basis points to 363.7, after earlier rising to a record.

Crude oil for November delivery gained 0.5 percent to $80.24 a barrel. Cattle and natural gas rallied more than 2.2 percent to lead gains among the 24 commodities tracked by the S&P GSCI Index.

Gold for December delivery slid 2.1 percent to $1,605.70 an ounce to extend a day-day drop to 7.8 percent, as some investors sold the metal to cover losses in other assets. Silver was little changed after plunging 26 percent over the previous two sessions.

The MSCI Emerging Markets Index declined 0.8 percent as benchmark indexes in Colombia, China and South Korea slumped at least 1.1 percent. Thailand’s SET Index tumbled 5.7 percent after the central bank said it may cut its economic growth forecasts.

Russia’s Micex Index rose 1.5 percent after Prime Minister Vladimir Putin said he would run again for president next year.

Have a wonderful evening everyone.

Be magnificent!

Selfishness in man is a beginning.

 

            -Rabindranath Tagore, 1861-1901

As ever,

Carolann

Ultimately, the only power to which man

should aspire is that which he exercises

over himself.

                 -Elie Wiesel, 1928-

 

Dear Friends,

Tangents:

This is pretty amazing:

Scientists at the world’s largest physics lab, the European Organization for Nuclear Research, said Thursday they have clocked neutrinos traveling faster than light.  That’s something that according to Einstein’s 1905 special theory of relativity just doesn’t happen.  On Thursday night Antonio Ereditato, leader of the Opera experiment at the Cern Laboratory in Switzerland, said beams of neutrinos, or subatomic particles, consistently arrived about 60 nanoseconds sooner on a 730km journey from Cern outside Geneva to the Gran Sasso underground lab in central Italy than if they would have been travelling at the speed of light – about 300,000km per second. Although the neutrinos are only travelling 0.01 per cent faster than light, the result would shake the theoretical foundations of physics that have been built up since Albert Einstein published his theory of relativity. The speed of light is regarded as an absolute limit for fast travel, unless you invoke unproven factors such as extra dimensions, or “wormholes”, in space.

Another fundamental tenet of science is that extraordinary claims require extraordinary proof, so no one is going to accept the Opera results until they have been verified independently by another experiment.

Something to think about:

Scared and sacred are spelled with the same letters. Awful proceeds from the same root word as awesome. Terrify and terrific. Every negative experience holds the seed of transformation. – Alan Cohen  

Photos of the day: 

September 23, 2011

A farmer puts name tags of the cheesemakers on the loaves of cheese made during the summer in the mountain pastures in the Justistal above the lake of Thun, Switzerland. The cheese, about 30 tons, will be shared among the farmers’ families according to the number of cows owned. The event represents a traditional process called ‘chaesteilet,’ distribution of cheese. Peter Klaunzer/Keystone/AP.

Dancers in traditional attire take a break during rehearsals for the garba dance ahead of the Navratri festival in Ahmedabad, India. Navratri, held in honour of Hindu Goddess Durga, is celebrated over a period of nine days where thousands of youths dance the night away in traditional costumes. Navratri starts on Sept. 28. Amit Dave/Reuters.

 

Market Commentary:

Canada

By Matt Walcoff

Sept. 23 (Bloomberg) — Canadian stocks fell, drawing closer to a bear market at any time since rebounding from a five-year low in March 2009, as investors were forced to sell precious metals to cover losses in other assets.

Barrick Gold Corp., the world’s largest gold producer, declined 4.5 percent as the metal completed its biggest two-day retreat since 1983. Silver Wheaton Corp., Canada’s fourth- largest precious-metals company by market value, lost 8.9 percent as silver futures plunged the most in a day since at least 1979. Canadian Oil Sands Ltd., the biggest owner of the Syncrude project, decreased 2.9 percent as crude oil settled below $80 a barrel for the first time since Aug. 9.

The Standard & Poor’s/TSX Composite Index fell 99.64 points, or 0.9 percent, to 11,462.87, extending its weekly decline to 6.5 percent, the most since March 2009. The index has decreased 19.7 percent since closing at a post-2008 high on April 5. A decline of 20 percent is a common definition of a bear market.

“Gold is not a safe haven,” Robert “Hap” Sneddon, the president of Oakville, Ontario, money manager CastleMoore Inc. and the Canadian Society of Technical Analysts, said in a telephone interview. “When margin clerks call, people go to any position that’s been strong to get that liquidity, and that’s what’s happened with gold.”

The S&P/TSX sank 5.3 percent in the previous two sessions as the U.S. Federal Reserve said the economic recovery is at risk and economic data from Europe, North America and China were more indicative of a slowdown than most economists had forecast in Bloomberg surveys. The Canadian stock measure is set to drop for a seventh straight month, the longest streak since 1984.                       

Gold futures dropped 5.9 percent in New York today. Silver sank 18 percent after tumbling 9.6 percent yesterday. The S&P/TSX Gold Index, which according to Bloomberg data includes 48 percent of the world’s publicly traded gold companies by market value, completed its biggest two-day decline since April 2009.

Barrick Gold Corp., the world’s largest gold producer, decreased 4.5 percent to C$47.90. Goldcorp Inc., the world’s second-biggest company in the industry by market value, slipped 4.24 percent to C$46.95. Centerra Gold Inc., which mines in Kyrgyzstan and Mongolia, tumbled 9.8 percent to C$20.64. Silver Wheaton lost 8.9 percent to C$33.24 for its biggest two-day plunge since October 2008.

The S&P/TSX Energy Index fell to a two-year low as crude futures completed a weekly drop.                         

Canadian Oil Sands lost 2.9 percent to C$19.95, the lowest close since March 2009. Canadian Natural Resources Ltd., the country’s second-biggest energy company by market value, slipped 2.2 percent to C$30.23 for a sixth-straight drop.

Petrominerales Ltd., which produces oil and gas in Colombia, declined 8.9 percent to an 11-month low of C$23.66 after Jamie Somerville, an analyst at Toronto-Dominion Bank, cut his rating on the shares to “buy” from “action list buy.” The company said yesterday it had failed to find oil in three exploration wells. Base-metal and coal producers in the S&P/TSX retreated for a sixth day as copper completed its biggest two-day plunge since October 2008. Teck Resources Ltd., Canada’s largest company in the industry, decreased 3.2 percent to C$30.73.                      

Copper producer First Quantum Minerals Ltd. fell 7.3 percent to C$13.71 after Michael Sata, who has called for higher mining taxes, won Zambia’s presidential election. Shares of the Vancouver-based company plunged 35 this week, the most since October 2008.

SouthGobi Resources Ltd., which mines coal in Mongolia, dropped 11 percent to C$6.65, the lowest since January 2009. Shares of companies with operations in Mongolia have plunged this week on concern the Asian country will seek to revise ownership accords.

Financial and industrial companies rose after an internal working paper showed European governments are exploring speeding up the setup of a permanent rescue fund.

Royal Bank of Canada, the country’s largest lender by assets, gained 1.6 percent to C$46.09 after closing at the lowest since July 2009 yesterday. Bank of Nova Scotia, Canada’s No. 3 lender, increased 1.5 percent to C$50.73. Canadian Pacific Railway Ltd., the country’s second-biggest railroad, advanced 5.1 percent from a 22-month low to C$48.59.

Valeant Pharmaceuticals International Inc., Canada’s largest drugmaker, climbed 5.2 percent to C$39.36 after Annabel Samimy, an analyst at Stifel Financial Corp., said in a note to clients that the shares “have been unduly punished.” Valeant had declined 9.1 percent in the previous four days.

Westport Innovations Inc., which develops natural-gas engine technology, rallied 6.4 percent to C$31.15 after saying it replaced C$36 million ($35 million) in matured debt with lower-cost debt.

US

By Rita Nazareth

Sept. 23 (Bloomberg) — U.S. stocks advanced, trimming the biggest weekly decline since October 2008 for the Dow Jones Industrial Average, amid speculation that policy makers will act to prevent a global financial crisis from getting worse.

Home Depot Inc. and Intel Corp. added at least 2 percent, pacing gains in companies most-tied to economic growth. Bank of America Corp. rallied 4.1 percent, the most in the Dow, as the lender prepared more asset sales to bolster capital. Nike Inc., the world’s largest sporting-goods maker, jumped 5.3 percent after profit topped analysts’ estimates and it raised a sales forecast. Newmont Mining Corp. and Halliburton Co. retreated more than 3.2 percent as gold and oil prices slumped.

The Standard & Poor’s 500 Index rose 0.6 percent to 1,136.43 at 4 p.m. New York time, trimming its weekly drop to 6.5 percent. The Dow added 37.65 points, or 0.4 percent, to 10,771.48. The gauge lost 6.4 percent since Sept. 16.

“Policy is viewed as inept, inert and basically out of bullets,” Paul Zemsky, the New York-based head of asset allocation for ING Investment Management, wrote in an e-mail. His firm oversees $550 billion. “If there was a good policy response, we could see the stock market rally 10 percent very quickly.”

A four-day rout this week erased $1.1 trillion in U.S. market value on speculation that central bankers would fail to prevent a financial crisis. The S&P 500 has slumped 17 percent since April 29 on concern that Europe’s debt crisis could derail the global economic recovery.                       

The European Central Bank may step up efforts to boost growth and ease financial-market tensions as early as next month, Governing Council members said. European governments are exploring speeding the setup of a permanent rescue fund, an internal working paper shows.

“There was a mention that if things continue to deteriorate in Europe that there would be a policy announcement, a pro-active response,” said Peter Kenny, a managing director in institutional sales at Knight Capital Group Inc. in Jersey City, New Jersey. “That could give the market some lift, but that doesn’t resolve the underlying problem.”

The S&P 500 started the session trading for 12.4 times earnings in the last 12 months, within 2 percent of a low of 12.2 reached Aug. 8, data compiled by Bloomberg show. The ratio would have to narrow another 18 percent to match its level on March 9, 2009, the start of the bull market in which the gauge rose as much as 102 percent, the data show.

The price-earnings ratio as of yesterday was 5.1 percent below the S&P 500’s average valuation of 13 at its lowest point in the last nine bear markets, data compiled by Bloomberg show.

To reach the lowest of those, 7 on June 21, 1982, the index would have to fall 43 percent to about 640, based on profit in the last 12 months of $91.41 a share.

“Stocks are starting to get pretty cheap,” Jack Ablin, chief investment officer for Chicago-based Harris Private Bank, which oversees $55 billion, said in a telephone interview.

“It’s reality versus expectations. I don’t know where reality is going to be, but if their expectations are pretty low, that’s a good sign for me.”

The Morgan Stanley Cyclical Index of companies most-tied to the economy rallied 1.1 percent. Home Depot, the largest U.S. home improvement retailer, gained 2 percent to $33.72. Intel rose 2.5 percent to $22.16.

The Dow Jones Transportation Average advanced for the first time in a week, stopping the worst five-day decline since Aug. 8, as airline shares rallied and traders were lured by the lowest valuations in about two years.

Delta Air Lines Inc. and United Continental Holdings Inc. surged at least 6.3 percent to lead gains as the average rallied 1.7 percent. Con-way Inc., a freight hauler, advanced 3.5 percent while railroad operator CSX Corp. climbed 3.4 percent.

The benchmark gauge for transportation companies had slipped 11 percent in five days through yesterday, driving its price-earnings ratio down to a 26-month low of 18.7. The period marked the worst slump since early August when S&P stripped the U.S. of its AAA rating and policy makers struggled to reach a compromise on raising the nation’s debt ceiling, sending the S&P 500 to its 2011 low.

Bank of America rose 4.1 percent to $6.31. The lender is in exclusive talks to sell its stake in NPC International Inc., the biggest U.S. Pizza Hut franchisee, for more than $800 million, said two people with knowledge of discussions. The lender also agreed to sell about $880 million in commercial mortgages at a discount of as much as 25 percent, said another person.                        

Nike rallied 5.3 percent to $88.64. Chief Executive Officer Mark Parker has been trying to overcome rising costs for raw materials and transporting goods by cutting operating expenses.

Nike’s gross margin, the percentage of sales left after the cost of goods sold, narrowed by 2.7 percentage points, less than the company’s projection for a 3 percentage point decline.

Gauges of energy and raw material producers had the two biggest declines in the S&P 500 within 10 industries, falling at least 0.3 percent. Newmont Mining, the largest U.S. gold producer, slumped 3.7 percent to $62.86. Halliburton decreased 3.2 percent to $31.67.

Stocks are having the worst quarter on record relative to U.S. Treasuries and gold, which may force investors to buy equities to rebalance their allocations, JPMorgan Chase & Co.’s Marko Kolanovic said.

U.S. and emerging-market equities have returned 43 percentage points less, the most during a quarter since at least 2002, according to data compiled by Kolanovic, whose analysis is based on a model portfolio composed of stocks, bonds and gold.

“This underperformance may trigger significant quarterly rebalance flows into equities and out of Treasuries at the end of next week,” Kolanovic, the New York-based global head of equity derivatives strategy at JPMorgan, wrote in a note to clients yesterday.

Have a wonderful weekend everyone.

Be magnificent!

As ever,

Carolann

Variety is the mother of enjoyment.

       –Benjamin Disraeli, 1804-1881

 

 

Dear Friends,

Tangents:

 

Just back from a two day wealth management conference in Calgary; excellent presentations on investing in the current challenging times.   Very reassuring.  More later….it was a busy catch-up day….not to mention emotional markets – crazy.  I never thought I’d live to see a 30-year-bond yield at 2.68%. 

Photos of the day 

September 22, 2011

A dew-laden spider web adorns a fence as a horse grazes in a pasture near Glencoe, Ky. Ed Reinke/AP

Fischer’s Lovebirds stand in a bird cage at Pairi Daiza, a zoo and botanical garden, in Brugelette Belgium.Yves Herman/Reuters

Market Commentary:

Canada

By Matt Walcoff and Whitney Kisling

Sept. 22 (Bloomberg) — Canadian stocks fell to the lowest level in a year after economic data from Europe, North America and China indicated the global recovery may be slowing and fuel and metal prices dropped on a stronger U.S. dollar.

Barrick Gold Corp., the world’s largest gold producer, declined 6.1 percent, sinking with precious metals as the U.S.

Dollar Index surged the most intraday since August 2010. Royal Bank of Canada, the country’s biggest lender by assets, lost 3.4 percent as financial shares slumped to a 12-month intraday low. Suncor Energy Inc., Canada’s largest oil and gas producer, dropped 6.8 percent as crude retreated as much as 7.1 percent.

The Standard & Poor’s/TSX Composite Index fell 483.10 points, or 4 percent, to 11,471.91 at 2:06 p.m. Toronto time, after sinking to 11,467.87, the lowest intraday level since July 2010. The index declined as much as 4.1 percent, the most in six weeks.

“Nothing has changed with respect to Europe and there’s still a response in the marketplace to the Federal Reserve,” which cited significant risks to growth yesterday, said Gareth Watson, at Richardson GMP Ltd. in Toronto. Watson is vice president of investment management at Richardson GMP, which oversees about C$16 billion ($15.5 billion). “In terms of the Canadian market, the Chinese PMI number this morning isn’t helping sentiment amongst resource names, so we’re being hit from all sides.”

Canada’s stock benchmark slumped 10 percent this quarter through yesterday as energy and financial stocks dropped on concern the world’s economy will grow at a slower pace than previously forecast.

The International Monetary Fund estimated on Sept. 20 that world gross domestic product will increase 4 percent this year and next, compared with June forecasts of 4.3 percent for 2011 and 4.5 percent for 2012. The S&P/TSX is set to decline for a seventh straight month, the longest streak since 1984.

Canadian retail sales fell twice as fast as economists forecast in July as demand for new automobiles and furniture dropped, Statistics Canada said today in Ottawa. The U.S. Labor Department said 423,000 Americans filed first-time claims for unemployment benefits last week, more than the 420,000 median estimate of economists in a Bloomberg News survey.

A report in Brussels showed that European services and manufacturing growth contracted for the first time in more than two years this month. China’s manufacturing may shrink for a third month in September, the longest contraction since 2009.

The Thomson Reuters/Jefferies CRB Index of 19 commodities fell as much as 4.5 percent, its biggest intraday slide since May 5. Gains in the dollar cut demand for gold as an alternative asset, sending the metal to a four-week low. Silver was set to retreat the most in a day since October 2008.

Barrick dropped 6.1 percent to C$50.34. Goldcorp Inc., the world’s second-largest gold producer by market value, declined 4.5 percent to C$49.20. Silver Wheaton Corp., Canada’s fourth- biggest precious-metals company by market value, lost 9 percent to C$37.19.

Keegan Resources Inc., which is developing a gold mine in Africa, plunged 27 percent to C$6.30 after issuing a resource estimate. The stock tumbled as much as 29 percent, the most intraday since 2004,

Forty of 43 S&P/TSX financial companies retreated. Royal Bank decreased 3.4 percent to C$44.97 after earlier touching C$44.38, the lowest intraday since June 2009. Canadian Imperial Bank of Commerce, the country’s fifth-largest lender by assets, slumped 4.9 percent to C$70.18 and earlier sank as much as 5.1 percent, the most intraday since May 2010. Manulife Financial Corp., North America’s fourth-biggest insurer, plunged 5.6 percent to C$11.24, the lowest since March 2009.                       

Insurance holding company Fairfax Financial Holdings Ltd. rallied 5.6 percent to C$402.01 after saying it may buy back shares.

The S&P/TSX Energy Index fell for a fifth day, touching the lowest intraday level since September 2009. Suncor dropped 6.8 percent to C$26.22, the lowest since March 2009. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, declined 3.8 percent to C$30.76. Trican Well Service Ltd., Canada’s biggest oilfield-services company, slid 9.4 percent to C$16.67 after plunging as much as 18 percent, the most intraday since December 2008.

Petrominerales Ltd., which produces oil in Colombia, tumbled 10 percent to C$26.10 after saying it failed to find oil in at least three exploration wells. The shares sank as much as 14 percent, the most intraday since December 2008. Base-metals and coal producers in the S&P/TSX retreated to the lowest since August 2010 as copper decreased the most since October 2008.

Teck Resources Ltd., Canada’s largest company in the industry, fell 6.3 percent to C$31.90, the lowest since July 2010. First Quantum Minerals Ltd., the country’s second-biggest publicly traded copper producer, slumped 8.7 percent to C$15.33 to extend its four-day plunge to 28 percent, the most since November 2008. Grande Cache Coal Corp., which mines in Alberta, tumbled 14 percent to C$5.27.

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, dropped for a sixth day, declining 3.5 percent to C$48.63. The shares touched a 2011 intraday low of C$47.98. Corn futures decreased as much as 5.1 percent.

US

By Rita Nazareth

Sept. 22 (Bloomberg) — U.S. stocks slumped, giving the Dow Jones Industrial Average its biggest two-day decline since December 2008, amid investors’ concern that policy makers are running out of tools to avoid another global economic recession.

All 10 industries in the Standard & Poor’s 500 Index retreated at least 1.8 percent as losses were led by commodity and industrial shares. Alcoa Inc., Caterpillar Inc. and Bank of America Corp. dropped more than 5 percent, pacing declines in companies most-tied to economic growth. FedEx Corp., operator of the biggest cargo airline and a proxy for the economy, tumbled 8.2 percent after cutting its profit forecast.

The S&P 500 fell 3.2 percent to 1,129.56 at 4 p.m. New York time, dropping 7.1 percent in four days. The Dow lost 391.01 points, or 3.5 percent, to 10,733.83, bringing its two-day retreat to 5.9 percent. About 13.2 billion shares changed hands on U.S. exchanges at 4:47 p.m., 54 percent more than the three-month average, according to Bloomberg data.

“People are selling first and asking questions later,”

David Kelly, chief market strategist for JPMorgan Funds in New York, said in a telephone interview. “The problem is that policy makers seem to have no clue what the solutions are. The Fed needs to express confidence on the economy itself. I don’t know how much further the market can go down.”

The MSCI All-Country World Index slid 4.5 percent, extending a drop from its May 2 high to more than 20 percent, entering a bear market. The S&P 500 has fallen 17 percent since April 29 amid concern about a global economic slowdown.

Benchmark indexes for the U.S., U.K., Canada, Singapore and New Zealand are the only ones among 24 developed countries that haven’t fallen at least 20 percent from their highs.                         

Stocks fell yesterday on the Federal Reserve’s assessment that the turmoil caused by Europe’s crisis is taking a toll on the economy. The Fed said it will replace $400 billion of short- term debt with longer-term Treasuries to spur growth. Stocks also fell as Moody’s Investors Service cut three U.S. banks.

The world is on the eve of the next financial crisis, with sovereign debt its epicenter, said Mohamed El-Erian, chief executive officer of Pacific Investment Management Co., which runs the biggest bond fund. The European Central Bank hasn’t put in place a “circuit breaker” to contain the region’s debt crisis, El-Erian, who is also Pimco’s co-chief investment officer, said at an event in Washington today. “There has been a significant increase in the financial requirements of international intervention,” El-Erian said.

“You need a lot more firepower in order to be a circuit breaker. Look at how much the ECB has put in and ask yourself the question: has it created a circuit breaker? The answer is no, even though the amounts involved have been massive.”

Bets that stocks will gain make up 20 percent of Traxis Partners LLC’s holdings, down from as much as 85 percent six months ago, as the threat of a recession makes equities too risky, according to co-founder Barton Biggs.

 “I wish I was minus 20,” Biggs said during an interview today on Bloomberg Television’s “Street Smart” with Matt Miller and Carol Massar. “I wish I was zero. I don’t think any place is a place to invest.”

Global stocks fell amid the Fed’s economic outlook and data indicating China’s manufacturing may shrink for a third month in September, the longest contraction since 2009, after a preliminary index of purchasing managers showed measures of export orders and output declined.

Stock futures extended losses after a Labor Department report showed that more Americans than forecast filed first-time claims for unemployment insurance payments last week.

Separately, U.S. consumer confidence dropped last week to the weakest point since the recession ended in June 2009, according to the Bloomberg Consumer Comfort Index.                      

The Morgan Stanley Cyclical Index lost 5.2 percent. The Dow Jones Transportation Average decreased 3.1 percent. The KBW Bank Index slumped 2.7 percent. Gauges of raw material and energy producers had the biggest declines in the S&P 500, slumping at least 5.3 percent, as commodities erased this year’s gain.

Alcoa, the largest U.S. aluminum producer, dropped 6.7 percent to $10.11. Caterpillar fell 6.9 percent to $73.90. Bank of America slid 5 percent to $6.06.

FedEx tumbled 8.2 percent to $66.58. The company, which ships more packages by air than rival United Parcel Service Inc., has seen volume growth slow as demand for express shipments stagnates amid a weakening economic recovery. FedEx also has been spending more on jet fuel, whose average cost jumped about 48 percent in the period.

 The S&P 500 may drop as low as 1,076 before investor panic abates and stocks rally, according to Tom DeMark, the creator of indicators for identifying turning points in securities.

The benchmark index for U.S. equities may fall that far intraday as early as next week and then gain as much as 20 percent, DeMark said in a telephone interview from Phoenix today. The swings will push the VIX, as the Chicago Board Options Exchange Volatility Index is known, above the high of 48 it reached on Aug. 8, he said.

“We’re trying to identify when selling capitulation is about to be completed,” said DeMark, the founder of Market Studies LLC. “We’re trying to identify the inflection point on the downside when the last seller sold. It could come as early as next Thursday.”

U.S. equities briefly trimmed losses as the Financial Times reported that the European Union is looking to speed up a recapitalization of 16 banks. The move would affect mostly “mid-tier” banks, the FT reported, citing a senior French official.

Companies that are least-tied to economic growth, known as “defensive,” outperformed the S&P 500. Gauges of utility and telephone companies fell less than the benchmark index. Only 27 stocks in the S&P 500 rose.

“The market is pricing in a recession,” Peter Sorrentino, a senior money manager at Huntington Asset Advisors in Cincinnati, said in a telephone interview. The firm oversees $14.8 billion. “We don’t see a repeat of 2009. “We’re into a crisis of confidence.”

Goodrich Corp. surged 10 percent to $120.60 for the biggest gain in the S&P 500. United Technologies Corp. agreed to buy Goodrich for $16.5 billion, adding the maker of aircraft landing gear and jet-turbine casings to take advantage of a record surge in commercial plane orders. Goodrich stockholders will get $127.50 a share. United Technologies dropped the most in the Dow, erasing 8.8 percent to $68.31.

Have a wonderful evening everyone.

Be magnificent!

Every day we see or read of appalling things happening in the world as the result of violence in man.

You may say, “I can’t do anything about it,” or “How can I influence the world?”

I think you can tremendously influence the world if you yourself are not violent,

if you lead actually every day a peaceful life – a life which is not competitive, ambitious, envious –

a life which does not create enmity.

Small fires can become ablaze.

 

-Krishnamurti, 1895-1986

As ever,

Carolann

Diligence is the mother

of good fortune.

          -Miguel de Cervantes, 1547-1616

 

 

Dear Friends,

Tangents:

September 16^th, 1620, Mayflower Day: Pilgrims deported from England.

September 18, 1851, New York Times first published.

I attended the Sauder School of Business Family Legacy Series dinner last night where the McLean family was celebrated.   A very entrepreneurial family, their family business, The McLean Group, established in 1972, has grown from a successful real estate investment and development firm into a second-generation family business active in film and television production (Vancouver Film studios), communications (Signal Systems), construction (Harbour Landing Construction), real estate (Blanca Realty), aviation (Blackcomb Aviation), and philanthropy (the McLean McCuaig Foundation).  The patriarch, David, was entertaining with some of his one liners (which he admitted he was famous for).  In the 1980s when interest rates soared to 20%,  almost devastating their business but they persevered.  Dealing with banks, David’s advice was to never go to the bank with a problem (you’ll get nowhere), always go with a solution.  With respect to building a business, entrepreneurship, he said,  “Show me a man who has never lost money, and I’ll show you one who is about to.”

One of the characteristics of successful people, is determination.  When you are tested, struck down, under attack, you find out what you are made of, and to be successful, you must have the resolve to soldier on…

Photos of the day 

September 16, 2011

A rainbow appears over Citizens Bank Park between baseball games in a doubleheader between the Philadelphia Phillies and the Florida Marlins in Philadelphia. Matt Slocum/AP

A visitor touches a 220 kg (485 lbs.) gold bar, worth around $12.8 million at today’s price, on display at the Jinguashi Gold Ecological Park in Xinbei City, Taiwan. The Jinguashi Gold Ecological Park said the gold bar is Taiwan’s largest. Pichi Chuang/Reuters

Market Commentary:

Canada

By Matt Walcoff

Sept. 16 (Bloomberg) — Canadian stocks fell, erasing a weekly gain, as Research In Motion Ltd. plunged after reporting earnings that missed the average estimate in a Bloomberg survey.

RIM, the BlackBerry maker, tumbled 20 percent in Toronto Stock Exchange trading. Cenovus Energy Inc., Canada’s fifth- largest energy company, fell 4.4 percent as crude oil declined. Goldcorp Inc., the world’s second-largest gold producer by market value, climbed 0.9 percent as the metal rebounded from a September low.

The Standard & Poor’s/TSX Composite Index slipped 161.13 points, or 1.3 percent, to 12,263.71, ending the week down 1 percent.

RIM’s “net income was down over 50 percent from last year,” Jennifer Radman, a money manager at Caldwell Investment Management Ltd. in Toronto, said in a telephone interview. The firm oversees about C$1 billion ($1 billion). “That’s pretty scary to people.”

The S&P/TSX gained earlier this week as France and Germany expressed support for Greece’s place in the euro region and the European Central Bank coordinated with international policy makers to lend dollars to banks. Canada’s stock benchmark is set to decline for a seventh straight month, the longest streak since 1984, as energy and financial stocks have retreated on concern the global economic recovery is in jeopardy.

RIM reported second-quarter earnings of 80 cents a share, trailing the average analyst estimate by 9.4 percent, excluding certain items. The Waterloo, Ontario-based company sold fewer than half as many PlayBook tablets as analysts had forecast on average.

The company’s shares tumbled 20 percent to C$23.50 on the Toronto Stock Exchange. In composite trading, RIM fell 2.1 percent to C$23.50 after sinking 19 percent when the company disclosed its results yesterday. The shares have plunged 60 percent this year.

Crude futures dropped 1.6 percent in New York while European finance ministers met in Wroclaw, Poland, to address the continent’s debt crisis.

Canadian Natural Resources Ltd., the country’s second- largest energy company by market value, declined 2.9 percent to C$34.20. Cenovus lost 4.4 percent to C$32.61. Talisman Energy Inc., an oil and gas producer with operations in North America, the North Sea and Indonesia, decreased 5 percent to C$14.30.                        

Canada’s six largest banks and all eight S&P/TSX insurance stocks fell. Toronto-Dominion Bank, the country’s second-largest lender by assets, dropped 2.1 percent to C$73.60. Royal Bank of Canada, its bigger domestic rival, declined 2.5 percent to C$46.30. Manulife Financial Corp., Canada’s largest insurer, lost 3.6 percent to C$12.45 after surging 6.3 percent yesterday.

The S&P/TSX Gold Index climbed for the first time in six days as the metal rose 1.9 percent. Goldcorp increased 0.9 percent to C$50.29. Barrick Gold Corp., its larger peer, gained 0.9 percent to C$52.52. OceanaGold Corp, which mines in New Zealand, soared 11 percent, the most since May 2010, to C$2.88.

Iamgold Corp. advanced 2.8 percent to C$21.59 after Sabrina Grandchamps, an analyst at HSBC Holdings Plc, raised her ratings on the shares to “overweight” from “neutral.” Higher gold prices will boost mining companies’ cash flow, HSBC said in a note to clients.

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, slipped 3.2 percent to C$54.50. Investors should sell some of their shares of fertilizer producers now that farmers have bought most of what they need for the Northern Hemisphere autumn, Charles Neivert, an analyst at Dahlman Rose & Co., said in a note to clients.

Propane distributor Superior Plus Corp. climbed 5.9 percent from a record-low close to C$8.79. The shares had tumbled 12 percent since DBRS Ltd. cut its credit ratings on the company Sept. 12.

US

By Rita Nazareth

Sept. 16 (Bloomberg) — U.S. stocks advanced for a fifth straight day, the longest rally since July for the Standard & Poor’s 500 Index, amid optimism that European leaders will make further progress on controlling the region’s debt crisis.

Amazon.com Inc. jumped 5.5 percent to a record, while Procter & Gamble Co. gained 2.5 percent as a report showed that confidence among U.S. consumers rose. Textron Inc., Tyco International Ltd. and Rockwell Collins Inc. added more than 3.1 percent after a report that United Technologies Corp. is lining up financing for an acquisition. Bank of America Corp. and JPMorgan Chase & Co. slumped at least 1.1 percent.

The S&P 500 rose 0.6 percent to 1,216.01 at 4 p.m. New York time. The index gained 5.4 percent since Sept. 9, its third- biggest weekly rally since 2009. The Dow Jones Industrial Average added 75.91 points, or 0.7 percent, to 11,509.09. The rally trimmed the gauge’s drop this year to 0.6 percent.

“The stock market is extremely undervalued,” David Goerz, the San Francisco-based chief investment officer at Highmark Capital Management Inc., which oversees $17.2 billion, said in a telephone interview. “As things begin to improve, the market can rise back to a more normal valuation. The fact that we got some moderation in terms of thinking about the ECB and how it’s going to address the crisis helped reduce some of the risk. In addition, the most recent data points suggest that this pause in economic activity is in fact transitory.”

The S&P 500 lost 18 percent between April 29 and Aug. 8 amid concern that Europe’s crisis threatened the global economy. The decline left the index trading at 12.2 times earnings last month, the cheapest since 2009, according to data compiled by Bloomberg. Since then, the index rose 8.6 percent.

Equities rose yesterday as the European Central Bank and international policy makers coordinated to lend dollars to banks to tame the credit crisis. Earlier this week, French and German leaders confirmed they will support Greece’s continued participation in the shared euro currency. Ministers began meeting today in Wroclaw, Poland, to discuss ways of shoring up Europe’s most-indebted nations, with U.S. Treasury Secretary Timothy Geithner also in attendance.

European finance ministers ruled out efforts to prop up the faltering economy and gave no indication of providing aid for lenders to go along with yesterday’s liquidity lifeline from the ECB. Clashing with Geithner, finance chiefs from the euro region said the 18-month debt crisis leaves no room for tax cuts or extra spending to spur an economy on the brink of stagnation.                         

“We’re hostage to the European crisis,” Dan Veru, chief investment officer at Fort Lee, New Jersey-based Palisade Capital Management LLC, said in a telephone interview. The firm manages $3.4 billion. “The fear is that there will be another systemic move that will put us into a recession. Sentiment has gotten too negative. There’s a case to be made that any pullback is going to be a buying opportunity.”

Household product and retail companies had the two biggest gains in the S&P 500 within 24 industries, rallying at least 1.7 percent. Amazon, the world’s largest online retailer, jumped 5.5 percent to $239.30, the highest level since it went public in 1997. Procter & Gamble, the world’s largest consumer-products company, climbed 2.5 percent, the most in the Dow, to $64.33.

The Thomson Reuters/University of Michigan preliminary index of consumer sentiment climbed to 57.8 this month from 55.7 in August. The median estimate of economists surveyed by Bloomberg News called for a reading of 57. The group’s measure of consumer expectations six months from now dropped to the lowest level since May 1980.                      

 United Technologies, the maker of Sikorsky helicopters and Carrier air conditioners, is seeking financing that may exceed $20 billion for a major U.S. acquisition, a person familiar with the matter said. The person wasn’t authorized to speak publicly because the details are confidential. John Moran, a spokesman for United Technologies, declined to comment.

Reuters reported the financing search earlier today, citing people it didn’t identify. The story said Goodrich Corp. and Rockwell Collins were attractive targets, according to people not directly involved in the matter, and said Textron and Tyco International were among companies mentioned in the past. Rockwell climbed 7.8 percent, the most in the S&P 500, to $56.21. Textron increased 6.8 percent to $18.63, while Tyco rose 3.1 percent to $43.70.

Banks had the biggest decline in the S&P 500 within 24 industries, falling 0.4 percent as a group. Bank of America, the biggest U.S. lender by assets, retreated 1.4 percent to $7.23. JPMorgan retreated 1.1 percent to $33.43.

 Research In Motion Ltd. tumbled 19 percent to $23.93 after missing analyst estimates as sales of BlackBerry smartphone models slowed and the company shipped fewer PlayBook tablet computers than projected. The company is losing ground in that market to Apple Inc.’s iPhone and devices that use Google Inc.’s Android software. It has made little progress with its PlayBook in the tablet computer market, shipping just one device for every 46 iPads that Apple sold in the latest quarter.

 “RIM is on a path to becoming a niche player,” said Ted Schadler, an analyst for Forrester Research Inc. “RIM has to essentially retrench its strategy. It has to focus on what about its products make them different or better than Apple or Google products.”

A gauge of energy shares in the S&P 500 dropped 0.1 percent, the only decline among 10 industries, as crude oil slumped the most in a week. Schlumberger Ltd., the world’s largest oilfield-services provider, fell 1.9 percent to $72.84.

Today was the expiration for U.S. futures and options contracts on indexes and individual stocks. So-called quadruple witching occurs once every three months.

Have a wonderful weekend everyone.

Be magnificent!

It is not others who must change, but you.

 

-Swami Prajnanpad, 1891-1974

As ever,

Carolann

Friendships, like marriage, depend on

avoiding the unforgiveable.

     -John D. MacDonald, 1916-1986 

 

Dear Friends,

Tangents:

HELLO

A word used in greeting, especially over the telephone

 

In one guise or another, “hallo,” “halloo,” and “hullo” have been used to solicit attention and signal surprise since the Middle Ages.  Hunters urged on their dogs with “halloo,” and the word was also used to signal a ferryboat captain from across the water.  (Some etymologists say it originated with the Old French Ho lá!, meaning “stop” or “pay attention.”)  As a greeting, “hello” had a gutsy, modern air in the late nineteenth century.  It was sleeker than “Do I get you?,” another early option for those greeting each other over the telephone, and it was more suave than England’s awkward choice, “Are you there?”  “Hello” was “a thorough-bred bulldog, ugly enough to be attractive,” one journalist wrote in 1899.  “It makes courtesy wait upon dispatch, and reminds us that we live in an age when it is necessary to be wide awake.”

  For those who normally spoke only with people to whom they’d been introduced, striking a balance between politesse and wasting time was tricky when greeting faceless strangers over the primitive, buzzing phone lines.  Delays and disconnections exasperated early subscribers.  In the beginning, tough young men working the switchboards in the din and clamor of the lawless central offices, like the Chicago exchange, known as “a howling madhouse,” happily battled complainers.  They were soon replaced by the less abrasive “Hello Girl,” whom we now know as the operator.  She flirted instead of fighting and quickly became a national archetype, known for her honeyed voice and her love of gossip.  In a small town, she’d even tell you the train schedule.

  In the name of efficiency, Hello Girls received elocution lessons after the turn of the century.  Then, in a further attempt to improve service, they were instructed to answer all calls with a curt “Number?”  Callers bristled and the Girls went back to “Hello.”  By the late 1920s, however, some company executives across the country banned the word again, with operators restricted to phrases “Number, please?” and “Thank you.”  “Synthetic courtesy is not soft and sentimental,” opined the New York Times.  “It is hard and virile.”

 Something about “hello” just felt right.  Nevertheless, as late as 1937 the New York telephone company tried to kill it once more, advising subscribers to answer their own phones with only their name, or company name, and recommending above all that callers “avoid such old-fashioned, indefinite and time-wasting words as ‘hello’.”  –from encyclopedia of the Exquisite, Jessica K. Jenkins.

 

…and I suppose someday, someone will be describing how “Hey” replaced “Hello” sometime around 2010…

 

Photos of the day 

September 13, 2011

Tuvan shamans participate in a ritual called “Kamlanie” outside the Kyzyl town, the administrative centre of Russia’s Tuva region, south of Siberian city of Krasnoyarsk. Eight shamans, members of “The Spirit of Bear” society took part in the traditional ritual. Ilya Naymushin/Reuters.

A sheep painted with the emblem of England’s rugby team looks on at a farm on the outskirts of Dunedin. England will play against Georgia in their Rugby World Cup Pool B match in Dunedin on Sunday. Marcos Brindicci/Reuters.

Market Commentary:

Canada

By Nikolaj Gammeltoft

Sept. 13 (Bloomberg) — Canadian stocks rose, breaking a three-day losing streak for the Standard & Poor’s/TSX Composite Index, as oil gained and financial companies rallied amid easing concern about French banks.

Toronto-Dominion Bank, Canada’s second-largest lender by assets, increased 1.7 percent. Bank of Nova Scotia, the third- largest lender, added 1.3 percent. Cenovus Energy Inc. rose 1.9 percent as crude climbed for a second day. Silvercorp Metals Inc., the Chinese silver miner accused of accounting fraud in an anonymous letter last month, fell 20 percent after Carson Block’s Muddy Waters LLC said it was shorting the stock.

The S&P/TSX rose 56.65 points, or 0.5 percent, to 12,205.48 at 4 p.m. Toronto time. The gauge lost 4.5 percent during the previous three days.

“We have a daily risk-on, risk-off trade as the market responds to global news,” Mathieu Roy, a money manager at Louisbourg Investments Inc. in Moncton, New Brunswick, said in a telephone interview. Louisbourg manages about C$1.5 billion ($1.5 billion). “We’re in a nervous trading range driven by macro events happening mostly in Europe.”

The index has slumped 14 percent since April 5 as the European debt crisis worsened. On Sept. 9, three officials with German Chancellor Angela Merkel’s coalition said the government is preparing plans to shore up banks in the event that Greece defaults. The officials declined to be named because the deliberations are private.                          

Toronto-Dominion Bank jumped 1.7 percent to C$73.85, while Bank of Nova Scotia surged 1.3 percent to C$51.45. Royal Bank of Canada, the country’s largest lender by assets, rose 0.1 percent to C$46.25. The S&P/TSX Financials Index advanced 0.8 percent while industrial stocks added the most among 10 industries, gaining 1.6 percent.

BNP Paribas SA, France’s biggest bank, and Societe Generale SA rebounded in Paris trading after easing concerns over their access to funding. Societe Generale jumped after Chief Executive Officer Frederic Oudea said in an interview with Bloomberg Television in New York that the bank’s exposure to European sovereign debt was “manageable” and that it could do without access to U.S. money-market funds.

Cenovus, the country’s fifth-biggest energy company, rallied 1.9 percent to C$31.90. Encana Corp., Canada’s biggest natural gas producer, advanced 1.5 percent to C$22.68.

Crude climbed for a second day in New York on speculation a report tomorrow will show stockpiles dropped in the U.S., the biggest oil consuming country. Natural gas futures gained for the first time in three days as forecasts showed hotter-than- normal weather in the U.S. Midwest and West, boosting demand for the power-plant fuel.                     

Guyana Goldfields Inc. rallied 1.3 percent to C$9.30. The gold explorer with operations in South America was rated “outperform” in new coverage at Credit Suisse Group AG with a price estimate of C$13 a share.

Silvercorp fell 20 percent, the most in seven years, to C$6.20. Lorne Waldman, a spokesman for Vancouver-based Silvercorp, didn’t respond to e-mail and telephone requests for comment. Block of Muddy Waters announced his bearish Silvercorp bet on Twitter today.

Toronto-Dominion Bank reduced its forecast for the Canada’s economic growth this year and next to reflect a U.S. economy that had a deeper recession than previously reported, according to Craig Alexander, the bank’s chief economist.

TD cut its growth forecast for Canada to 2.2 percent this year, from 2.8 percent. It reduced the forecast for next year to 1.9 percent, from 2.5 percent, and raised the 2013 outlook to 2.6 percent, from 2.1 percent.

US

By Rita Nazareth

Sept. 13 (Bloomberg) — U.S. stocks rose, sending the Standard & Poor’s 500 Index higher for a second day, as French banks eased concerns over their access to funding and investors watched for signs of progress in taming Europe’s debt crisis.

All 10 main industries in the S&P 500 advanced as gains were led by industrial, raw material and technology companies.

The Dow Jones Transportation Average, a proxy for the U.S. economy, jumped 3.4 percent as airlines rose. Wells Fargo & Co. and Fifth Third Bancorp added more than 1 percent, following a rally in European lenders. Aetna Inc. jumped 5.4 percent as the health insurer said profit will probably beat its forecast.

The S&P 500 increased 0.9 percent to 1,172.87 at 4 p.m. in New York, after falling as much as 0.4 percent. The gauge has risen 1.6 percent in two days. The Dow Jones Industrial Average advanced 44.73 points, or 0.4 percent, to 11,105.85 today.

“Stocks are trading on the news of the day and the news was moderately favorable,” Michael Cuggino, who oversees $15 billion at Permanent Portfolio Funds in San Francisco, said in a telephone interview. “While the issues of liquidity and health of the European banking system and the long-term viability of the euro are still out there, today is a day where people are looking beyond that. We’ve had a big correction. Levels really haven’t gotten back to where they were.”

The S&P 500 fell as much as 18 percent from a three-year high on April 29 through Aug. 8 on growing concern over Europe’s debt crisis and an economic slowdown. Since then, the index has risen 4.8 percent.

Global stocks rose as BNP Paribas SA, France’s biggest bank, and Societe Generale SA surged after easing concerns over their access to funding. Societe Generale jumped after Chief Executive Officer Frederic Oudea said in an interview with Bloomberg Television in New York that the bank’s potential losses from European sovereign debt were “manageable” and that it could do without access to U.S. money-market funds.

“For our bank, the exposure to sovereign debt is low, absolutely manageable,” Oudea said. “We have plenty of buffers of liquidity and we are adjusting to the reduction in the money- market fund exposure.”

Stocks briefly trimmed gains after a report that German Finance Minister Wolfgang Schaeuble said Greece should not get any additional aid beyond what has already been agreed upon.

Greece should default on its bonds to stop a deterioration of the economy, said Mario Blejer, a former Bank of England adviser who took the reins of Argentina’s central bank after its 2001 default on $95 billion.                         

“Greece should default, and default big,” Blejer, who was an adviser to Bank of England Governor Mervyn King from 2003 to 2008, said in an interview in Buenos Aires. “You can’t jump over a chasm in two steps.”

The KBW Bank Index added 1.2 percent. Wells Fargo gained 1.1 percent to $24.36. Fifth Third Bancorp rallied 4.2 percent to $10.35.

All 20 stocks in the Dow Jones Transportation Average rose. Delta Air Lines Inc. climbed 8.3 percent to $7.99. United Continental Holdings Inc. advanced 7.4 percent to $19.28.

Aetna rose 5.4 percent to $40.53. Earnings excluding some items this year are now expected to be more than $4.60 to $4.70 a share, the Hartford, Connecticut-based insurer said in a corporate filing today. Demand for medical care continues to be lower than previous expectations, helping to contain costs, Aetna said.

Best Buy Co. sank 6.5 percent to $23.35. The largest consumer electronics retailer reported second-quarter profit that trailed analysts’ estimates and cut its full-year earnings forecast as sales of televisions and mobile phones declined.                        

The S&P 500 may drop below a one-year low reached last month because too few stocks have declined rapidly enough, according to MF Global Inc.

Using an indicator known as the 10-day stochastic, only 3.2 percent of S&P 500 stocks were “oversold” as of Sept. 9, Craig Peskin and John Kolovos, co-heads of technical analysis research at MF Global, wrote in a note yesterday. While the benchmark gauge for U.S. equities slid 15 percent from a three-year high on April 29 through last week, not enough individual stocks fell quickly and far enough to signal the overall market reached a low point.

“Indicators that measure the degree that equities are oversold are not signaling such a condition has been met,” New York-based Peskin and Kolovos wrote. “One aspect of this market is clear: there is a lot of overhead resistance for equities to get through. However, we do not see evidence that it can be overcome in the near future.”

Have a wonderful evening everyone.

Be magnificent!

The connection of love is total.

In love, difference disappears

and the human soul accomplishes

its object in perfection,

exceeding its own boundaries

and traversing the threshold of infinity.

 

-Rabindranath Tagore, 1861-1901

As ever,

Carolann

The mind in itself can make a heaven

of Hell and a hell of Heaven.

             -John Milton, 1608-1674

 

 

 

Dear Friends,

Tangents:

 

Battle of Marathon, September 9, 490 BC

Leo Tolstoy’s Birthday, September 9, 1828

Photos of the day

September 9, 2011

A heavily armed Port Authority police officer stand guard next to the North Pool at the World Trade Center memorial site in New York. Just days before the 10th anniversary of the Sept. 11 attacks, US counter-terrorism officials are chasing a credible but unconfirmed al-Qaida threat to use a car bomb on bridges or tunnels in New York City or Washington. Mary Altaffer/AP

 

Bavarian farmers, followed by their cows, walk along a road in Oberstaufen, south of Munich. At the end of the summer season, farmers move their herds down from the Alps to the valley into winter pastures. Michaela Rehle/Reuters

Market Commentary:

 

Canada

By Matt Walcoff

Sept. 9 (Bloomberg) — Canadian stocks fell, erasing a weekly gain, as mounting concern over the possibility of a Greek default boosted the U.S. dollar and weakened fuels, metals and shares of financial companies.

Suncor Energy Inc., Canada’s largest oil and gas producer, dropped 3.2 percent as crude oil declined. Royal Bank of Canada, the country’s largest lender by assets, decreased 3 percent.

BlackBerry maker Research In Motion Ltd. lost 4.7 percent after an analyst at Jefferies Group Inc. cut his rating on the company. The Standard & Poor’s/TSX Composite Index fell 296.42 points, or 2.3 percent, to 12,387.54. The index dropped 1.7 percent for the week.

 “The situation in Europe is not getting better,” Stephen Gauthier, a money manager at Fin-XO Securities in Montreal, said in a telephone interview. The firm oversees C$600 million ($602 million). “Oil and gas is quite a big sector, so if you continue to see oil being affected by what’s happening around the world, it’s not great news for the Canadian market.”

The S&P/TSX has retreated 6.9 percent this quarter, second- least among developed countries’ stock benchmarks behind New Zealand’s. Energy stocks in the Canadian index have sunk 13 percent and gold companies have surged 23 percent on concern over sovereign debt in Europe and the U.S. and a slowing global recovery.                      

Canadian employment declined by 5,500 positions in August, Statistics Canada said today. Twenty of 22 economists in a Bloomberg survey had forecast a gain in jobs. The unemployment rate climbed to 7.3 percent from 7.2 percent, the first increase since January.

Fuels and metals fell as the U.S. dollar gained against 15 of 16 other major currencies. The euro dropped as much as 1.8 percent, a day after the European Central Bank cut its 2011 and 2012 growth forecasts.

The ECB said today that Juergen Stark resigned from its executive board, suggesting policy makers are divided over how to fight the debt crisis. Stocks extended their declines after three German officials said Chancellor Angela Merkel’s government is preparing plans to shore up banks in the event that Greece defaults.

The S&P/TSX Energy Index completed its biggest loss in three weeks.

Suncor declined 3.2 percent to C$29.45. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, decreased 4.4 percent to C$34.15. Cenovus Energy Inc., the country’s fifth-biggest company in the industry, slid 6.4 percent to C$31.78, the lowest close since January.Precision Drilling Corp., Canada’s largest drilling company, sank 7.3 percent to C$11.85.                       

Forty-one of 43 S&P/TSX financial companies retreated. Royal Bank of lost 3 percent to C$47.47. Manulife Financial Corp., North America’s fourth-largest insurer, lost 4.2 percent to a one-year low of C$12.32. Toronto-Dominion Bank, Canada’s second-biggest lender by assets, fell 2.7 percent to C$74.22.

The S&P/TSX Gold Index dropped for the first time in six days after closing at a record yesterday. Yamana Gold Inc., Canada’s fourth-largest producer of the metal by market value, declined 1.7 percent to C$16.90. Northgate Minerals Corp., the mining company that has agreed to be bought by AuRico Gold Inc., slumped 7.7 percent from a four-year high to C$3.98.

Harry Winston Diamond Corp., the co-owner of the Diavik mine featured on the TV show “Ice Road Truckers,” sank 6 percent to C$13.52 in the second trading day after reporting earnings that trailed the average analyst estimate in a Bloomberg survey, excluding certain items.

Copper futures retreated the most in a month in New York.

Teck Resources Ltd., Canada’s largest base-metals and coal producer, slipped 4.6 percent to C$40.58. First Quantum Minerals Ltd., the country’s second-biggest publicly traded copper producer, fell 6.4 percent to C$20.81.

RIM lost 4.7 percent to C$29.52 after Peter Misek, a Jefferies analyst, reduced his rating on the shares to “underperform” from “hold.” A Jefferies survey found “lackluster” retail sales of new BlackBerry phones, Misek wrote in a note to clients.

US

By Rita Nazareth

Sept. 9 (Bloomberg) — U.S. stocks fell, erasing a weekly gain for the Standard & Poor’s 500 Index, on speculation Greece could default on its debt and deepen an economic slowdown.

Financial stocks tumbled as Germany set plans to shore up the nation’s banks in the event Greece defaults, according to three coalition officials who spoke on condition of anonymity.

JPMorgan Chase & Co. and Citigroup Inc. slumped at least 4.2 percent. Chevron Corp. and Alcoa Inc. lost more than 3.2 percent as a rising dollar undermined the appeal of commodities.

McDonald’s Corp. fell 4 percent as sales trailed estimates. The S&P 500 retreated 2.7 percent to 1,154.23 at 4 p.m. in New York, the lowest since Aug. 22. The benchmark measure fell for a second straight week, sinking 1.7 percent since Sept. 2.

The Dow Jones Industrial Average declined 303.68 points, or 2.7 percent, to 10,992.13 today. The 30-stock gauge has posted triple-digit moves in 19 of the past 24 trading days.

“We’re dealing with a confidence crisis,” Matt McCormick, a money manager at Cincinnati-based Bahl & Gaynor Inc., which oversees $4 billion, said in a telephone interview. “You look at the possibility of a Greek default. Investors are making a decision now that they don’t want to be long over the weekend. A lot of people think that Germany will pull out a rabbit from the hat and fix Greece. Germany is fighting its own issues. It cannot be the sugar daddy for all of Europe.”

The S&P 500 has fallen as much as 18 percent from a three- year high on April 29 on concern about Europe’s debt crisis and an economic slowdown. It closed as low as 1,119.46 on Aug. 8, within 29 points of a bear market, or a 20 percent drop.

Questions over Greece’s ability to meet the terms of its rescue package are dogging the nation as bondholders weigh whether to participate in a debt exchange that’s crucial to a second bailout. The nation is seeking preliminary responses from bond investors to the proposed swap. Greece has no plans to publish details of anticipated participation in its debt-swap program this week or next, said Petros Christodoulou, head of the country’s debt management office.

Greece is committed to “full implementation” of its bailout agreement, the country’s finance ministry said in a statement. The country rejected default talk as “organized speculation,” according to the statement.

 In a sign officials are increasingly split over the best way to fight Europe’s debt crisis, Juergen Stark resigned from the European Central Bank’s Executive Board. Stark stepped down after protesting the bank’s bond purchases on a conference call earlier this week, said a euro-area central bank official familiar with the meeting.

Stocks also fell on speculation Congress won’t pass President Barack Obama’s $447 billion plan to boost the economy.

The president, speaking before a joint session of Congress yesterday, demanded six times that lawmakers act “right away” on a plan that would boost spending on infrastructure, stem teacher layoffs and cut in half the payroll taxes paid by workers and small business owners.

“For people hoping for a quick injection of economic activity, that’s not what Obama’s plan portends,” Peter Sorrentino, a senior money manager at Huntington Asset Advisors in Cincinnati, said in a telephone interview. The firm oversees $14.8 billion. “There’s a perception that it’s going to be difficult to pass it. Some people are concerned that it might not have worked last time. So, why would this be any better?”

 Benchmark gauges fell yesterday as Federal Reserve Chairman Ben S. Bernanke disappointed investors by not detailing new plans to boost growth in a speech to economists in Minneapolis. Bernanke repeated points from his speech on Aug. 26 in Jackson Hole, Wyoming.                           

All 10 groups in the S&P 500 declined today. The Morgan Stanley Cyclical Index of companies most-tied to economic growth dropped 2.9 percent. The KBW Bank Index of 24 stocks slid 3.4 percent.

JPMorgan declined 4.3 percent to $32.08. Citigroup fell 4.4 percent to $26.74. Chevron lost 3.3 percent to $95.19. Alcoa retreated 3.7 percent to $11.58.

McDonald’s, the world’s largest restaurant chain, slumped 4 percent to $85.03. Sales at stores open at least 13 months rose 3.5 percent in August, the Oak Brook, Illinois-based company said today in a statement. Analysts projected a gain of 5 percent, the average of seven estimates compiled by Bloomberg.

U.S. sales advanced 3.9 percent, missing analysts’ estimates for a 4.5 percent gain. The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, soared 12 percent, the most since Aug. 18, to 38.52.                       

The S&P 500 may sink to as low as 970 because Wall Street analysts’ earnings estimates are too optimistic, according to MKM Partners LLC’s Michael Darda.

The 2012 forecast for S&P 500 company profits of about $108 a share may have to come down by as much as 30 percent, said Darda, chief market strategist at the Stamford, Connecticut- based research and trading firm. He cited the history of U.S. business cycles and the relationship between bond yields and earnings in making the prediction.

“We believe the S&P 500 will fall to 970-1,030 before bottoming,” Darda wrote in today’s report titled “Profit Squeeze Coming.” He added, “If conditions are less favorable than average, the S&P 500 could surely fall more.”

Have a wonderful weekend everyone.

Be magnificent!

We are fragmented.  We are one person at the office and another at home,

we speak of democracy and are autocrats in our hearts;

we speak of love for our neighbors even as we kill that love with our competitive spirit;

one part of us works, watches, and acts independently of the other.

Are you conscious of the fragmentation of your existence?  Is it possible for a mind

that has splintered the structure of its thoughts to perceive the broad field of consciousness?

 

-Krishnamurti, 1895-1986

As ever,

Carolann

Never look down on anybody unless

you are helping him up.

                    -Jesse Jackson, 1941

 

 

Dear Friends,

Tangents:

 

It’s that time of year….this appeared in the Globe & Mail on Monday:

Morals back in class

 

“He who steals an egg, steals an ox – as all French children knew until 1969, when teachers were told to remove lessons on proverbs from the  national curriculum,” says The Times of London.  “Now primary schools are being told to bring them back as part of a drive to teach moral values to a generation often depicted as lost.  When France’s 6.6 million primary-school children return [this] week after the holidays, they will be invited to learn and discuss a proverb or saying written on the whiteboard in the class.  ‘I’m bringing morals back to school,’ said Luc Chatel, the education minister who [on Aug. 31] instructed primary schools to organize lessons on ‘the precepts of the honest man’ as often as possible; preferably every morning.  ‘I want children to learn about good and evil, truth and falsehood, dignity, courage and honesty.’ ’’

Manners maketh man.

     -motto of William of Wykeham (1324-1404), bishop of Winchester and founder of Winchester College; English proverb, mid 14^th century.

Photos of the day 

September 7, 2011

A test of the Tribute in Light rises above lower Manhattan in New York. Four World Trade Center (2nd l.) is under construction. The memorial, sponsored by the Municipal Art Society, will light the sky on the evening of Sept. 11, 2011, in honor of those who died ten years ago in the terror attacks on the United States. Mark Lennihan/AP

Fans of the Lokomotiv ice hockey team lay flowers and light candles at the Lokomotiv Arena to pay tribute to the players killed in a plane crash, in the city of Yaroslavl, on the Volga River northeast of Moscow, Russia. The Yak-42 jet carrying the Lokomotiv ice hockey team crashed while taking off near Yaroslavl. Misha Japaridze/AP

Market Commentary:

Canada

By Matt Walcoff

Sept. 7 (Bloomberg) — Canadian stocks rose for the first time in four days, led by energy and financial companies, as a German court rejected challenges to Europe’s debt bailout and investors speculated a new stimulus plan will spur U.S. growth.

Suncor Energy Inc., Canada’s largest oil and gas producer, gained 3.7 percent as crude futures advanced the most in four weeks. Toronto-Dominion Bank, the country’s second-biggest lender by assets, increased 1.4 percent after the Bank of Canada said there is less need to withdraw stimulus. Westport Innovations Inc., which develops natural-gas engine technology, soared 18 percent after reaching a marketing agreement with Royal Dutch Shell Plc.

The Standard & Poor’s/TSX Composite Index climbed 202.02 points, or 1.6 percent, to 12,720.56.

“When there’s a bit of better-than-expected news, there’s a bit of a knee-jerk reaction,” Ian Nakamoto, director of research at money manager MacDougall MacDougall & MacTier Inc. in Toronto, said in a telephone interview. The firm oversees $4 billion.

The S&P/TSX dropped 2 percent in the previous three days, including a 0.8 percent drop Sept. 2 after the U.S. said employment didn’t increase in August. Concern over the European debt crisis intensified after German Chancellor Angela Merkel’s party lost a state election. Canada’s stock benchmark has declined 5.4 percent this year.

Germany’s top court today rejected challenges to the country’s participation in bailouts for indebted euro-region governments. Industrial production in the country increased eight times more last month than the median economist forecast in a Bloomberg survey, the Bundesbank said today.                     

U.S. President Barack Obama is set to lay out plans to Congress tomorrow to inject more than $300 billion into the economy next year, mostly through tax cuts, infrastructure spending and aid to state and local governments.

Oil futures rebounded from a one-week low in New York. Suncor rose 3.7 percent to C$30.36. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, gained 3.2 percent to C$35.66. Athabasca Oil Sands Corp., PetroChina Co.’s partner in Canadian oil-sands development, advanced 5.8 percent to C$13.65. TransGlobe Energy Corp., which operates in Egypt and Yemen, jumped 9.8 percent to C$9.91.

Every S&P/TSX bank and the three biggest insurers in the index climbed after the Bank of Canada kept its benchmark interest rate at 1 percent.

“In light of slowing global economic momentum and heightened financial uncertainty, the need to withdraw monetary policy stimulus has diminished,” the bank said in a statement.                      

 TD increased 1.4 percent to C$77.65. Royal Bank of Canada, the country’s largest lender by assets, rose 1.4 percent to C$48.90. Manulife Financial Corp., North America’s fourth- biggest insurer, gained 2.9 percent to C$13.

All 15 companies in an index of S&P/TSX base-metals and coal producer advanced as copper rallied. The metal climbed as Freeport-McMoRan Copper & Gold Inc. faced labor disputes in Peru and Indonesia.

 First Quantum Minerals Ltd., the country’s second-biggest publicly traded copper producer, rose 5.5 percent to C$23.25. Ivanhoe Mines Ltd., which is building a copper and gold mine in Mongolia with Rio Tinto Group, gained 8.5 percent to C$21.77.

Major Drilling Group International Inc., a contract driller, surged 9.6 percent to C$12.65 after reporting first- quarter earnings that beat the average analyst estimate in a Bloomberg survey by 12 percent, excluding certain items. The jump was the biggest since October 2009.                       

Westport rose 18 percent to a nine-year high of C$26.85. Shell and Westport will jointly offer fuel supply, customer support and maintenance to owners of North American natural-gas vehicles, Shell said in a statement.

Magna International Inc., Canada’s largest auto-parts maker, rallied 5.2 percent to C$36.98 after Ravi Shanker, an analyst at Morgan Stanley, raised his rating on the shares to “overweight” from “underweight.” Shanker cited share-price declines since Aug. 4 and the company’s “best-in-class” balance sheet. Magna had $1.74 billion of cash and equivalents as of June 30.

Bombardier Inc., the maker of trains and airplanes, rebounded 5.5 percent to C$4.70 after closing at a one-year low yesterday. Boeing Co. raised its 20-year commercial-aircraft- demand forecast for China by 15 percent.

Transcontinental Inc., Canada’s largest printer, plunged 9.4 percent, the most since March 2009, to C$11.86. The company reported third-quarter earnings that trailed the average analyst estimate in a Bloomberg survey by 9.9 percent, excluding certain items.

Evertz Technologies Ltd., which makes electronics for broadcasters, soared 12 percent, the most since February 2009, to C$13 after its first-quarter profit surpassed the average analyst estimate in a Bloomberg survey by 19 percent, excluding certain items.

Imax Corp., the maker of giant-screen movie projection systems, surged 9.5 percent to C$18.07. The shares have rallied 30 percent since closing at the lowest relative to earnings since 2000 on Aug. 22.

US

By Stephen Kirkland and Rita Nazareth

Sept. 7 (Bloomberg) — Stocks rose, rebounding from a four- day global slump that drove valuations to the lowest level since 2009, amid speculation President Barack Obama’s plan for more than $300 billion in economic stimulus will boost growth.

Treasuries, German bunds and gold fell as the dollar snapped a six-day rally.

The MSCI All-Country World Index surged 2.8 percent and the Standard & Poor’s 500 Index jumped 2.9 percent at 4 p.m. in New York. The 10-year Treasury yield added six basis points to 2.04 percent after reaching a record low yesterday, and Germany’s yield climbed six basis points to 1.91 percent. The dollar weakened against the euro after legal challenges to Germany’s role in the region’s rescue funds were rejected by the nation’s top court. Gold dropped the most in two weeks and copper advanced above $9,000 a metric ton in London.

Equities rallied after a selloff erased $2.5 trillion from global markets this month and left the MSCI World trading at 12 times reported earnings. Obama plans to propose tax cuts, infrastructure spending and direct aid to state and local governments. Federal Reserve Bank of Chicago President Charles Evans called for more stimulus to reduce a 9.1 percent jobless rate, including a commitment to keep interest rates low until unemployment falls to around 7.5 percent.

“The stock market likely marked its bottom,” David Sowerby, a Bloomfield Hills, Michigan-based portfolio manager at Loomis Sayles & Co., which oversees $150 billion, said in a telephone interview. “To the extent that President Obama’s message is permanent versus temporary, the market and the economy will respond more favorably.”                      

The S&P 500 rallied the most in two weeks, rebounding from a three-day, 4.4 percent slump. Yahoo! Inc. surged 5.4 percent after ousting Chief Executive Officer Carol Bartz and announcing a strategic review of its business. Bank of America Corp. climbed 7 percent after naming Tom Montag and David Darnell as co-chief operating officers and ousting wealth-management head Sallie Krawcheck and consumer-banking leader Joseph Price from its management ranks.

JPMorgan Chase & Co., American Express Co. and Alcoa Inc. also rallied at least 4 percent to help lead gains in all 30 stocks in the Dow Jones Industrial Average. All 10 of the main industries in the S&P 500 advanced, led by financial and energy companies.

Obama will address Congress tomorrow amid unemployment that remains at 9.1 percent more than two years after the recession’s official end. Evans’s speech places the Chicago Fed president among the “few” members of the Federal Open Market Committee who, according to minutes of the group’s gathering in August, favor a “more substantial move” beyond the central bank’s pledge to hold rates at record lows for about two years.

 “Given how truly badly we are doing in meeting our employment mandate, I argue that the Fed should seriously consider actions that would add very significant amounts of policy accommodation,” Evans, 53, said in the text of a speech today in London. “Such further policy accommodation does increase the risk that inflation could rise temporarily above our long-term goal of 2 percent.”

The Fed said the economy grew at a slower pace in some regions of the country as shoppers limited their spending and factories curbed production. The economy continued to expand at a “modest pace,” though some districts noted “mixed or weakening activity,” the Fed said in its Beige Book survey released today. Fed Chairman Ben S. Bernanke will talk about the U.S. economic outlook tomorrow in Minneapolis.

Treasury 10-year notes fell for the first time in a week. Thirty-year bonds also retreated, sending their yields up nine basis points to 3.36 percent.

The Stoxx Europe 600 Index advanced 3.1 percent, rebounding from the lowest level in more than two years. The gauge’s valuation had dropped to about 10.4 times reported earnings, near the cheapest level since December 2008, according to data compiled by Bloomberg. Cie. Financiere Richemont SA jumped 7.3 percent as the second-biggest luxury-goods company reported sales that beat estimates. Germany’s DAX Index jumped 4.1 percent, the most since May 10.

The Dollar Index, which tracks the U.S. currency against those of six trading partners, fell 0.7 percent, dropping for the first time in seven days. The Swedish krona strengthened 0.8 percent against the euro after the central bank signaled it may raise interest rates one more time this year.

The Australian dollar appreciated against 15 of 16 major peers monitored by Bloomberg, climbing 1.6 percent versus the U.S. dollar, after a report showed the economy grew last quarter at the fastest pace in four years. The Swiss franc weakened to 1.21015 per euro, a day after the central bank set a ceiling of 1.20 versus the 17-nation currency and said it was prepared to use “unlimited” quantities of cash to defend it. The franc declined 8.1 percent versus the euro yesterday, the biggest drop since the shared currency’s introduction.

The yield on the 10-year Spanish bond fell 19 basis points to 4.98 percent, declining for the second straight day, with the similar-maturity Italian security’s yield sliding 24 basis points. Greek bonds fell, sending 10-year yields up 27 basis points to 20.08 percent.

Germany’s Federal Constitutional Court in Karlsruhe threw out suits targeting the country’s share of the 110 billion euros ($154 billion) in loans for Greece from euro-region governments and the International Monetary Fund as well as a separate 750 billion-euro rescue fund approved last year to halt the spread of the Greek debt crisis. The ruling clears the way for Chancellor Angela Merkel’s coalition to participate in the European rescue plans.                      

The Italian Senate approved Prime Minister Silvio Berlusconi’s revised austerity plan, setting up a final vote in the Chamber of Deputies as Italy seeks to stem surging bond yields. The austerity package, the second in a month, was announced on Aug. 5 to convince the European Central Bank to buy Italian bonds after the 10-year  yield surged to a euro-era record of 6.4 percent.

The cost of insuring European government bonds fell from records. The Markit iTraxx SovX Western Europe Index of credit- default swaps linked to 15 nations sank 10 basis points to a mid-price of 317.

The Markit CDX North America Investment Grade Index, which investors use to hedge against losses on corporate debt or to speculate on creditworthiness, fell 5.2 basis points to a mid- price of 121 basis points, according to index administrator Markit Group Ltd.                      

Copper jumped 1.9 percent, the most in a week, to close at $4.132 a pound on the Comex in New York, and climbed to $9,092 a ton on the London Metal Exchange as threats of mine strikes heightened concern that a global shortfall of the metal will worsen. Nickel surged 5.3 percent, the most since May 2010.

Freeport-McMoRan Copper & Gold Inc.’s Peruvian workers will begin a two-day stoppage today over pay increases, a union official said. Another strike may start at the company’s Grasberg mine in Indonesia next week, unless workers are offered higher wages.

Gold futures dropped for a second day, falling 3 percent to $1,817.60 an ounce. Oil rallied the most in four weeks, surging 3.9 percent to $89.34 a barrel in New York as storms threatened to reduce production from the Gulf of Mexico, where shut-ins from last week’s hurricane probably curbed stockpiles.

The MSCI Emerging Markets Index rose 2.3 percent, rebounding from a three-day slide. Benchmark gauges in South Africa, Russia and Poland jumped more than 3 percent as prices for oil and industrial metals increased.

The Shanghai Composite Index added 1.8 percent, the most in two weeks, after the China Securities Journal said the central bank may ease monetary policy. China’s central bank may add cash to the market by buying bills from banks in open market operations or cutting the required reserve ratio for banks, the China Securities Journal, which is operated by the official Xinhua News Agency, said in a commentary. Korea’s Kospi Index rallied 3.8 percent.

Have a wonderful evening everyone.

Be magnificent!

An individual is a separate entity without connection.

A person is an individual connected.

 

-Swami Prajnanpad, 1891-1974

As ever,

Carolann

Sooner or later, those who win are those

who think they can.

                      -Richard Bach, 1936- 

 

 

Dear Friends,

Tangents:

 

VAN GOGH BLOOMS

With the help of 8,000 potted plants, Van Gogh’s A Wheatfield with Cypresses has been re-created on the western side of London’s National Gallery as part of its carbon-reduction plan.  The living painting is part of a General Electric/National Gallery collaboration and will keep growing until October – there’s still time to see it.  for a view of the “living wall” go to www.gereports.com/van-gogh-ecomagination-style/.

The idea of living walls has really been catching on in lots of cities (including Vancouver)– amazing to see, just a spectacular concept I think.

…and as for back to school, the sentiments expressed in this poem stir nostalgia,

ATLANTIC FAREWELL

All summer she saved us

from the heat’s languor

with shuddering cold mirth,

then sent us squealing

with delight to snuggle

warm sand valleys until

we called for mercy again.

We leave reluctantly

as gulls wipe our salty

tears from the rocks.

                          -Elizabeth Mata

Photos of the day 

September 6, 2011

People painted with black grease celebrate during the traditional festivities of the Cascamorras festival, in the streets of Baza, Granada, Spain. According to an ancient tradition, the people from Baza try to stain with grease the Cascamorras, a man coming from the nearby village of Guadix to steal the statue of the Virgin of Mercy. He can only recover the statue if he gets there clean, something that has never happened in the five centuries of the ritual. Daniel Tejedor/AP

Labrador ‘Mara’ is shampooed as she sits in Germany’s first dog wash station in the dog Boutique ‘Dog an der Koe’ in Leipzig, central Germany. Jens Meyer/AP

Market Commentary: 

Canada

By Matt Walcoff

Sept. 6 (Bloomberg) — Canadian stocks fell for a third day, led by financial and energy companies, after a state election setback for German Chancellor Angela Merkel’s party fueled concern that the European debt crisis will worsen.

Royal Bank of Canada, Canada’s largest lender by assets, dropped 1.5 percent as Greek bond yields climbed to a euro-era record. Suncor Energy Inc., the country’s biggest oil and gas producer, slid 2.4 percent as crude futures slipped 0.5 percent in New York. Barrick Gold Corp., the world’s largest producer of the metal, advanced 2.3 percent.

The Standard & Poor’s/TSX Composite Index decreased 83.87 points, or 0.7 percent, to 12,518.54.

“It’s how long do the Germans want to continue bailing out the Greeks or the Portuguese?” Philip Petursson, managing director of the Portfolio Advisory Group at Manulife Financial Corp.’s asset-management unit in Toronto, said in a telephone interview. The unit oversees $217 billion. “The markets just want to know someone is in control of the situation, and apparently, now no one is in control, whether it’s the U.S. economic situation, the U.S. debt situation, European debt, the global economy.”

The index slipped 1.3 percent during the previous two days, including a 0.7 percent drop on Sept. 2 after a U.S. government report showed employers added no jobs in August. The Canadian stock benchmark has fallen 6.9 percent this year as energy, base-metals and insurance stocks have dropped on concern over the European debt crisis and signs of a slowing global recovery.                      

Bond yields in the most-heavily indebted European Union countries surged after Merkel’s party suffered its fifth election loss this year on Sept. 4 as she failed to sway voters in her home state with a campaign based on her handling of the euro-area debt crisis. Canadian markets were closed yesterday for the Labor Day holiday.

S&P/TSX financial companies declined after rallying 2.2 percent last week. Royal Bank lost 1.5 percent to C$48.22.

Toronto-Dominion Bank, its biggest domestic rival, slipped 0.8 percent to C$76.56. Bank of Nova Scotia, Canada’s third-largest lender by assets, decreased 1.4 percent to C$52.30.

Crude oil retreated after sliding 2.8 percent Sept. 2. Suncor fell 2.4 percent to C$29.28. Bankers Petroleum Ltd., which operates in Albania, slumped 5.5 percent to C$4.64.

Encana Corp., the country’s largest natural gas producer, tumbled 4.7 percent to C$23.37 after Andrew Potter, an analyst at Canadian Imperial Bank of Commerce, cut his price estimate on its U.S.-traded shares to $32 from $38.

Oil and gas explorer Open Range Energy Corp. soared 40 percent to a record C$8.95 after saying it will spin off its services and supply business into a new company.

The S&P/TSX Gold Index closed at a record high as the metal rallied as much as 2.5 percent before erasing its gains.

Barrick Gold Corp., the world’s largest gold producer, gained 2.3 percent to C$53.15 after Peter Ward, an analyst at Jefferies Group Inc., began coverage of the company with a “buy” rating. In a note to clients, Ward cited the company’s July purchase of Equinox Minerals Ltd.

European Goldfields Ltd., which operates in southern Europe, advanced 5.1 percent to C$12.66. Centerra Gold Inc., which mines in Kyrgyzstan and Mongolia, jumped 10 percent to a record C$23.12 after being featured in a technical-analysis story in the Globe & Mail.

Harry Winston Diamond Corp., the co-owner of the Diavik mine featured in the TV series “Ice Road Truckers,” increased 6.4 percent to C$15.03. The company is scheduled to report second-quarter financial results tomorrow.

First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, retreated 3 percent to C$22.03 a day after Anindya Mohinta, an analyst at Citigroup Inc., cut his rating on the company to “hold” from “buy.”

SNC-Lavalin Group Inc. slumped 4.5 percent to C$48.57. Police raided one of the construction company’s Canadian offices as part of probe related to Bangladeshi government contracts, according to the Canadian Press.

 BlackBerry maker Research In Motion Ltd. climbed 3.5 percent to C$30.63. Gus Papageorgiou, an analyst at Scotiabank, raised his rating on the shares to “sector outperform” from “sector perform” in a note dated yesterday.

Directory publisher Yellow Media Inc. plunged 12 percent to 79 Canadian cents after saying its chief financial officer, Christian M. Paupe, will leave the company. Shares of the Montreal-based company have sunk 87 percent this year.

US

By Rita Nazareth

Sept. 6 (Bloomberg) — U.S. stocks fell, giving the Standard & Poor’s 500 Index its longest slump in almost a month, amid concern that Europe’s debt crisis is worsening. Equities pared losses in the final 30 minutes of trading.

The benchmark measure trimmed its drop from 2.9 percent as companies most-tied to economic growth rebounded, propelling the Morgan Stanley Cyclical Index to a 0.2 percent gain for the day.

Bank of America Corp. and JPMorgan Chase & Co. decreased more than 3.4 percent on concern about a global financial crisis. Exxon Mobil Corp. and Alcoa Inc. lost at least 1.3 percent on speculation that demand for commodities will slow.

The S&P 500 lost 0.7 percent to 1,165.24 at 4 p.m. in New York. The benchmark gauge has fallen 4.4 percent in three days, the longest drop since Aug. 8. The Dow Jones Industrial Average slumped 100.96 points, or 0.9 percent, to 11,139.30 today.

“The big worry is the situation in Europe,” John Carey, a Boston-based money manager at Pioneer Investments, said in a telephone interview. The firm oversees about $250 billion.

“Until we have some resolution of that crisis, we’re going to have continued turbulence in the market. I still think the chance of a recession is less than 50 percent. However, there’s the risk that sentiment just turns so negative that people crawl back into their holes and we do have another downturn.”

The U.S. stock market was closed yesterday for a holiday, as global equities fell, Italian bonds dropped for an 11th day and the cost of government and bank default insurance rose to records amid concern about Europe’s debt crisis.

Benchmark gauges trimmed losses in the final minutes of trading as investors, including Mark Bronzo, who helps manage $26 billion at Security Global Investors in Irvington, New York, cited “short covering” after the selloff. “The markets were hit hard and we will get some news from Europe and also hear from President Obama,” he wrote in an e-mail.

A stagnant labor market and bleaker business and consumer sentiment may require more effort from President Barack Obama and Federal Reserve Chairman Ben S. Bernanke to spur growth.

Obama has requested a joint session of Congress on Sept. 8 for an address to unveil his proposals to promote job growth. In a letter to House Speaker John Boehner, Obama said that the nation faces “unprecedented” economic challenges.

The MSCI All-Country World Index fell a fourth day. The franc weakened the most since the creation of the euro after the Swiss central bank imposed a ceiling on the franc for the first time in more than three decades and pledged to defend the target with the “utmost determination.”

HSBC Holdings Plc cut its forecast for global economic growth for the next two years and said the efficacy of any further stimulus measures will be limited. The world economy will grow 2.6 percent this year and 2.8 percent in 2012, compared with estimates published in June of 3 percent and 3.4 percent respectively, London-based HSBC economists including Stephen King and Madhur Jha said in a note to clients today.

“Healthy economic recovery is now but a distant dream,” they wrote. “For the developed world, the downgrades are particularly aggressive whereas, for the emerging world, the reductions are more modest, helped by the ongoing support offered by China and India.”

Stocks pared losses earlier today after the Institute for Supply Management’s index of non-manufacturing businesses increased to 53.3 in August from 52.7 a month earlier, beating the median 51 projection by economists in a Bloomberg News survey. A reading above 50 signals expansion. The Tempe, Arizona-based group’s index averaged 56.1 in the five years to December 2007, when the last recession began.

Companies most-tied to economic growth rebounded from the lows of the session. Hewlett-Packard Co. lost 2.9 percent to $23.63, after falling as much as 5.9 percent. General Electric Co. decreased 3.2 percent to $15.25, paring an earlier drop of 4.8 percent.

Bank of America declined 3.6 percent to $6.99, while JPMorgan lost 3.4 percent to $33.44. The two lenders were among 17 banks sued by the U.S. to recoup $196 billion spent on mortgage-backed securities bought by Fannie Mae and Freddie Mac.

The Federal Housing Finance Agency, on behalf of Fannie Mae and Freddie Mac, filed 17 lawsuits on Sept. 2 in New York state and federal courts and in federal court in Connecticut.

U.S. government-backed firms and agencies should “stop punishing banks” and suspend demands for mortgage repurchases because they are impeding an economic recovery, according to Paul Miller of FBR Capital Markets & Co. Repurchase losses may total $121 billion, wrote Miller, a former federal bank examiner, in a note to clients dated today. He previously said the tally might range from $54 billion to $106 billion.

Gauges of energy and raw-material producers in the S&P 500 fell at least 0.6 percent as the S&P GSCI index of 24 commodities lost 0.5 percent. Exxon slid 1.4 percent to $71.15. Alcoa decreased 2.2 percent to $11.77.

Temple-Inland Inc. rallied 25 percent to $30.85. International Paper Co., the world’s largest pulp and paper maker, said it agreed to acquire the Austin, Texas-based company for $3.7 billion, ending a three-month battle for control of the shipping-box manufacturer.

A measure of momentum for the S&P 500 is showing a similar pattern to one that preceded the previous two bear markets in U.S. stocks and could presage more losses, according to WJB Capital Group Inc.

For the first time since 2007, the benchmark’s Moving Average Convergence/Divergence line, calculated by subtracting the index’s average level during the past 26 months from the average over the past 12 months, crossed below the “signal line” that plots the 9-period average difference between the two, according to Bloomberg data. The 12-month moving average itself is still rising.

“The only thing that’s missing, to date, from the S&P repeating the 2000 and 2008 turndowns is a rolling over in its 12-month moving average,” John Roque, a senior technical analyst at WJB in New York, wrote in a note to clients today.

The last two times the cross below the signal line occurred December 2007 and April 2000 — the S&P 500 slumped 54 percent and 47 percent, respectively, before hitting its bottom, Bloomberg data show. Roque said the S&P 500 is at risk of extending losses should the benchmark’s average price during the past 12 months start falling.

UBS AG cut its year-end forecast for the S&P 500 and estimates for earnings in 2011 and 2012 on concern the global economy is weakening. The index will climb 15 percent from its closing level on Sept. 2 to 1,350 at the end of the year, down from an earlier prediction of 1,425, according to Chief U.S. Market Strategist Jonathan Golub.

Thomas Doerflinger, also a strategist at the firm, lowered his estimates for combined profit by companies in the benchmark equity index to $95 a share in 2011 from $99.35 and to $101 a share in 2012 from $108.

Bearish bets by investors using futures contracts on the S&P 500 Index increased to the highest level in almost four years in the week ended Aug. 30, according to data compiled by Bloomberg and the Commodity Futures Trading Commission. Short selling involves the sale of securities borrowed from the owner, and generates profit when the trader repurchases them at a lower price and returns them to the owner.

Hedge funds and other large speculators hold a net 107,913 futures contracts wagering that the S&P 500 will decrease in value. The short position is the highest since September 2007, when bearish bets reached a record of 127,474 contracts a month before the benchmark equity gauge reached an all-time high, according to Bloomberg data going back to 1997.

Have a wonderful evening everyone.

Be magnificent!

The infinite oneness of the Soul is the eternal sanction of all morality.

You and I are not only brothers – every literature voicing man’s struggle towards freedom

has preached that – but you and I  are really one.

This is the dictate of Indian philosophy.

This oneness is the rationale of all ethics and all spirituality.

 

-Swami Vivekananda, 1863-1902

As ever,

Carolann

Desire is the key to motivation, but it’s determination

and commitment to an unrelenting pursuit of your

goal – a commitment to excellence – that will enable

you to attain the success you seek.

                                -Mario Andretti, 1940-