February 21, 2012 Newsletter

Dear Friends,

Tangents:

Mardi Gras today!  Carnivals will end in many places around the world. Also known as Shrove Tuesday and Pancake Day.  In Paris, a fat ox, crowned with a fillet, used to be paraded through the streets.  It was accompanied by mock priests and a band of tin instruments in imitation of a Roman sacrificial procession.  Tomorrow, Lent begins on Ash Wednesday with a fast for many observant Christians, which  lasts until Easter.  The Saxons called March lenctenmonath, literally lengthening, because the days noticeably lengthen.  Since the longest part of the fast occurs in March, it received the name Lent.  A fast of 36 days was introduced in the 4^th century, but it did not become fixed at 40 days until the early 7^th century, thus corresponding with Christ’s fast in the wilderness.

Lest we forget…on this day in 1916, the  Battle of Verdun was fought in France; over one million men were killed.

One of my favorite magazines, The New Yorker, made its debut on this day in 1925.

W.H. Auden was born on  this day in 1907; one of his poems:

If I could tell you

Time will say nothing but I told you so,
Time only knows the price we have to pay;
If I could tell you I would let you know.

If we should weep when clowns put on their show,
If we should stumble when musicians play,
Time will say nothing but I told you so.

There are no fortunes to be told, although,
Because I love you more than I can say,
If I could tell you I would let you know.

The winds must come from somewhere when they blow,
There must be reasons why the leaves decay;
Time will say nothing but I told you so.

Perhaps the roses really want to grow,
The vision seriously intends to stay;
If I could tell you I would let you know.

Suppose the lions all get up and go,
And all the brooks and soldiers run away;
Will Time say nothing but I told you so?
If I could tell you I would let you know.

-W. H. Auden (1907 – 73)

Beautiful new moon tonight – don’t forget to look!

photos of the day

February 21, 2012

Dancers of Grande Rio samba school parade during carnival celebrations at the Sambadrome in Rio de Janeiro, Brazil. Nearly 100,000 paying spectators turn out for the all-night spectacle at the Sambadrome.

Victor R. Caivano/AP

A masked reveller poses in Saint Mark’s Square during the Venetian Carnival in Venice.

Manuel Silvestri/Reuters

Market Closes for February 21, 2012:

North American Markets

Market Commentary:

Canada

By Katia Porzecanski and Andrew Theen

Feb. 21 (Bloomberg) — Canadian stocks rose to a five-month high as metals and oil advanced after Greece won a second bailout, easing concern the European debt crisis will crimp growth and demand for commodities.

Suncor Energy Inc., the country’s largest oil and gas producer, increased 1.7 percent as oil traded at its highest price in nine months. Barrick Gold Corp., the world’s largest gold producer, rose 2.9 percent, while Teck Resources Ltd., Canada’s largest base-metals and coal producer, jumped 3.3 percent. Ivanhoe Mines Ltd. rallied 2.2 percent after it was rated buy in new coverage at Bank of America Corp.

The S&P/TSX Composite Index rose 167.95 points, or 1.4 percent, to 12,626.25 at 2:00 p.m. Toronto time. The index touched 12,656.31 earlier, the highest intraday price since Sept. 9.

“It’s more confirmation that things are getting better,” Anil Tahiliani, a money manager at McLean & Partners in Calgary, said in a telephone interview. The firm oversees about C$1 billion ($1 billion). “Oil has rallied, so we see gold and other commodities that are related to oil rally off of that.”

The index advanced eight of the past nine weeks as improving U.S. employment, manufacturing and housing data overshadowed the European debt crisis. Seventy-four percent of Canadian exports went to the U.S. last year, according to Statistics Canada.

European finance ministers approved 130 billion euros ($172 billion) in aid for Greece by tapping into European Central Bank profits and coaxing investors into providing more debt relief to shield the region from a default. Greece’s debt may still balloon to 160 percent of gross domestic product in a worst-case scenario, analysis by the International Monetary Fund and European officials indicated.

Materials companies led gains in Canada as metals rose on improved prospects for commodity use. Gold had the biggest advance in four weeks as Iran pledged to press on with its efforts to develop nuclear energy, increasing political tension and demand for a haven. Copper rose the most since Nov. 30 as China eased bank-reserve requirements for a second time in three months.

Barrick rose 2.9 percent to C$48.19. First Quantum Minerals Ltd., the country’s second-biggest publicly traded copper producer, gained 4.5 percent to C$23.23. Teck Resources jumped 3.3 percent to C$39.57.

NovaGold Resources Inc., which is developing projects in Alaska and British Columbia, rose 3.6 percent to C$8.71. The company said its shareholders will get one share of NovaCopper Inc., a unit it plans to spin off, for every six NovaGold shares they hold. The spinoff will be voted on at a shareholder meeting in Vancouver on March 28, NovaGold said.

Ivanhoe Mines, Rio Tinto Group’s majority-owned partner in Mongolia’s Oyu Tolgoi copper project, rallied 2.2 percent to C$16.81 after it was rated buy at Bank of America, with a price estimate of C$22.

The S&P/TSX Energy Index rose 1.4 percent. Suncor increased

1.7 percent to C$34.73. Canadian Natural Resources Ltd., Canada’s second-largest energy company by market value, rallied

0.8 percent to C$37.69. PetroBakken Energy Ltd., a western Canadian oil and gas producer, rose 4.2 percent to C$16.06. Flint Energy Services Ltd. surged 66 percent to C$24.80 after URS Corp., a San Francisco-based construction company, agreed to buy the oilfield-services company for C$1.25 billion in cash to add projects servicing oil and natural gas producers in Western Canada. Flint shareholders will get C$25 per share.

S&P/TSX Financials Index rose 1 percent. Royal Bank of Canada, the country’s biggest lender by assets, gained 0.9 percent to C$53.60. Toronto-Dominion Bank, its largest domestic rival, advanced 1.5 percent to C$79.72. Sun Life Financial Inc., Canada’s third-largest insurer, jumped 3.6 percent to C$21.50.

US

By Stephen Kirkland and Rita Nazareth

Feb. 21 (Bloomberg) — U.S. equities pared early gains as a surge in oil weighed on transportation and consumer shares while Greece’s approval for a second bailout failed to spur enough confidence to keep the Standard & Poor’s 500 Index at an almost four-year high. Treasuries declined.

The S&P 500 rose 0.1 percent to 1,362.28 at 4 p.m. in New York after earlier rising as much as 0.5 percent to top its highest closing level since June 2008. The Dow Jones Industrial Average trimmed its advance after climbing above 13,000 for the first time since May 2008. The Stoxx Europe 600 Index lost 0.5 percent. The 10-year U.S. Treasury yield jumped five basis points to 2.06 percent. Oil reached a nine-month high near $106 a barrel as Iran said it stopped selling to France and Britain.

European finance ministers approved 130 billion euros ($173 billion) in aid for Greece by tapping into European Central Bank profits and coaxing investors into providing more debt relief to shield the region from a default. U.S. equities also rose earlier as earnings at companies from Home Depot Inc. to Macy’s Inc. topped analyst estimates.

“When you reach a headline level, there’s always some fallback in the short-term,” Madelynn Matlock, who helps oversee about $14.5 billion at Huntington Asset Advisors in Cincinnati, said in a telephone interview. “Having a deal in Greece means that at least in March we don’t have the prospect of a disorderly default facing us. Obviously, this doesn’t solve any long-term problems. On top of that, in a climate where nobody in the developed world has wonderful growth, the last thing you need is higher oil prices.”

The Bloomberg U.S. Airlines Index slumped as much as 8.3 percent amid concern about higher fuel costs. US Airways Group Inc. and United Continental Holdings Inc. sank more than 10 percent each during the day.

Gauges of clothing makers and food and consumer-staples retailers helped lead losses among 24 industries in the S&P 500.

Wal-Mart Stores Inc. slid after the biggest retailer’s quarterly earnings trailed analysts’ estimates as an emphasis on low prices hurt margins.

The S&P 500 earlier rose as much as 0.5 percent to 1,367.76, above its highest close since June 2008. Alcoa Inc. led the Dow higher earlier today as aluminum prices rallied in London.

About three shares fell for each that advanced in the Stoxx 600. Segro Plc, the U.K.’s largest publicly traded owner of industrial properties, sank 2.1 percent after saying net asset value declined 9.8 percent. Real-estate companies fell 1.5 percent as a group for the biggest drop among 19 industries.

Europe is still struggling to avoid the threat of default as investors warned Greece will soon risk violating the terms of its second bailout in three years. The nation signed up to a program of austerity and economic reform aimed at slashing debt to 120.5 percent of gross domestic product by 2020 from about 160 percent last year.

Economists from Citigroup Inc. to Commerzbank AG concluded Greece may again fail to deliver on austerity goals amid a fifth year of recession, looming elections and social unrest.

“The Greek bailout keeps the wheels on the bus,” James Dunigan, who helps oversee $107 billion as chief investment officer in Philadelphia for PNC Wealth Management, said in a phone interview. “The ride is a little smoother, but it doesn’t solve the longer-term issues.”

The two-year Treasury yield increased less than one basis point to 0.303 percent following an auction of $35 billion of the notes. The notes yielded 0.310 percent, matching 0.310 percent in pre-auction treading and compared with 0.25 percent at the previous sale on Jan. 24. The Treasury auction drew a bid-to-cover ratio, which gauges demand by comparing total bids with the amount of securities offered, of 3.54 compared with an average of the past 10 auctions of 3.49 percent.

The Dollar Index, which tracks the U.S. currency against those of six trading partners, fell 0.3 percent. The Australian dollar weakened against its 16 major counterparts, losing 0.9 percent versus the U.S. currency, after minutes of the nation’s most-recent central bank policy meeting showed there is scope for monetary easing.

Brent oil for April settlement increased $1.63, or 1.4 percent, to $121.68 a barrel on the London-based ICE Futures Europe exchange.

Iran stopped selling oil to France and Britain yesterday, preempting a European Union ban, an official news website said.

EU nations bought a combined 18 percent of Iran’s exports of crude and condensates, or 452,000 barrels a day, in the first half of 2011, according to the U.S. Energy Department. France purchased 49,000 barrels a day and the U.K. 11,000 barrels.

Nineteen of the 24 commodities tracked by the S&P GSCI Index advanced, sending the gauge up 1.7 percent. Copper advanced the most in 11 weeks, climbing 3.5 percent to $3.8445 a pound in New York. Spot gold climbed 1.2 percent to $1,755.60 an ounce and silver advanced 3.7 percent.

Commodities also rallied in the first U.S. trading session since China’s central bank cut reserve requirements for banks to boost lending and support economic growth. U.S. markets were closed yesterday for the Presidents’ Day holiday.

The yield on the Spanish two-year note declined seven basis points to 2.76 percent as the government sold 2.5 billion euros of three- and six-month bills. The yield on the 10-year Italian bond dropped four basis points to 5.44 percent, driving the extra yield investors demand to hold the securities instead of bunds six basis points lower.

The MSCI Emerging Markets Index lost 0.4 percent. Russia’s Micex Index slid 1.3 percent. The Turkish lira slipped 0.5 percent after the central bank cut its highest lending rates.

India’s Sensex rose 0.8 percent after trading resumed following yesterday’s holiday.

Have a wonderful evening everyone.

Be magnificent!

As an individual, a specific entity, you have physical, mental, and nervous limits, among others.

If you know your own limits and try to stay within these limits,

you are free.

Swami Prajnanpad, 1891-1974

As ever,

Carolann

Use what talents you possess: the woods would be silent if

no birds sang there except those that sang best.

-Henry Van Dyke, 1852-1933

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7