March 13, 2012 Newsletter

Dear Friends,

Tangents:

Today – 3.14, is Pi Day:

Pi

This article is about the number. For the Greek letter, Pi, ?, and ?.

? (sometimes written pi) is a mathematical constant that is the ratio of any Euclidean circle’s circumference to its diameter. ? is approximately equal to 3.14. Many formulae in mathematics, science, and engineering involve ?, which makes it one of the most important mathematical constants. For instance, the area of a circle is equal to ? times the square of the radius of the circle.

? is an irrational number, which means that its value cannot be expressed exactly as a fraction having integers in both the numerator and denominator (unlike 22/7). Consequently, its decimal representation never ends and never repeats. ? is also a transcendental number, which implies, among other things, that no finite sequence of algebraic operations on integers (powers, roots, sums, etc.) can render its value; proving this fact was a significant mathematical achievement of the 19th century.

Throughout the history of mathematics, there has been much effort to determine ? more accurately and to understand its nature; fascination with the number has even carried over into non-mathematical culture. Perhaps because of the simplicity of its definition, ? has become more entrenched in popular culture than almost any other mathematical concept, and is firm common ground between mathematicians and non-mathematicians. Reports on the latest, most-precise calculation of ? are common news items; the record as of September 2011, if verified, stands at 5 trillion decimal digits.

The Greek letter ? was first adopted for the number as an abbreviation of the Greek word for perimeter (??????????), or as an abbreviation for “periphery/diameter”, by William Jones in 1706. The constant is also known as Archimedes’ Constant, after Archimedes of Syracuse who provided an approximation of the number during the 3rd century BC, although this name is uncommon today. Even rarer is the name Ludolphine number or Ludolph’s Constant, after Ludolph van Ceulen, who computed a 35-digit approximation around the year 1600.

–from Wikipedia, the free encyclopedia

photos of the day

March 14, 2012

A man looks at artwork as he is seen through the installation ‘Red Concave Circle’ by De Wain Valentine in the Pacific Standard Time exhibition at the Martin-Gropius-Bau exhibition hall in Berlin.

Thomas Peter/Reuters

A man takes pictures near The Monolith sculptures in the Vigeland Sculpture Park in Oslo. The sculpture park features 212 bronze and granite sculptures designed by Norwegian sculptor Gustav Vigeland between 1939 and 1949.

Stoyan Nenov/Reuters

Market Closures for March 14, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Joseph Ciolli

March 14 (Bloomberg) — Canadian stocks fell for the second time in three days, led by gold companies, on speculation that an economic recovery will curb demand for the metal as an alternative investment.

Guyana Goldfields Inc., which explores for gold in South America, decreased 9.4 percent. China Gold International Resources Corp. fell 4.9 percent. Manulife Financial Corp., North America’s third-largest insurer, advanced 6.6 percent a day after the U.S. Federal Reserve raised its assessment of the economy and refrained from new actions to lower borrowing costs.

The S&P/TSX Composite Index declined 159.79 points, or 1.3 percent, to 12,377.90.

“With the Fed statements yesterday and the data coming out of the U.S., the market is getting a lot better,” Greg Taylor, a money manager at Aurion Capital Management in Toronto, said in a telephone interview. The firm oversees about C$5.5 billion

($5.6 billion). “With that happening, people don’t need their insurance policy, which has been gold. It looks like it has no support until C$1,600, and that’s just dragging these gold companies lower.”

The index has increased 0.6 percent since March 6, the day of its largest decline of the year, as stronger-than-forecast American jobs data and Greece’s debt restructuring helped offset concern over China’s lower growth target and Europe’s economic contraction. Energy and raw-materials companies make up 46 percent of Canadian stocks by market value, according to Bloomberg data.

Gold tumbled on speculation that the Federal Reserve will refrain from offering additional stimulus as the economy recovers. Futures for April delivery retreated 3 percent to

$1,646.90 an ounce at 1:41 p.m. in New York, the biggest loss since Feb. 29.

Guyana Goldfields fell 9.4 percent to C$4.04, while China Gold dropped 4.9 percent to C$4.23. Nevsun Resources Ltd., which mines the metal in the African country of Eritrea, decreased 6.5 percent to C$3.46. Eight out of the 10 biggest stock declines in the S&P/TSX were gold companies.

Financial stocks in the S&P/TSX, led by insurers, rose for a fifth straight day after the Fed yesterday said 15 of 19 U.S.

banks would be able to maintain capital levels above a regulatory minimum in an “extremely adverse” economic scenario. Treasuries slid, sending 10- and 30-year yields to a four-mouth high.

Manulife surged 6.6 percent to C$13.49 after rising 11 percent, the most intraday since November 2010. Industrial Alliance Insurance and Financial Services Inc. gained 11 percent to C$31.05 on the increased yields, the biggest increase in the S&P/TSX. Sun Life Financial Inc. rose 4.5 percent to C$22.61.

“The move can be traced to the increased in the 10-year bond yield, which is good for life companies,” Taylor said.

“That’s why Manulife is having a strong move today.”

GMP Capital Inc. fell 7.9 percent to C$7.20 after reporting fourth-quarter earnings per share excluding some items of 5 Canadian cents, missing the average analyst estimate of 9 Canadian cents.

Energy stocks in the S&P/TSX slipped with oil prices after inventories climbed to a six-month high.

Suncor Energy Inc., Canada’s largest oil and gas producer, dropped 3.8 percent to C$32.75. TransCanada Corp., the developer of the proposed Keystone XL pipeline, lost 1.6 percent to C$43.82.

US

By Susanne Walker and Rita Nazareth

March 14 (Bloomberg) — Treasuries slid, sending 10-year yields to a four-month high, while the dollar rose and gold tumbled as the Federal Reserve’s improved economic assessment caused investors to reduce bets on more monetary easing. Most U.S. stocks fell a day after the biggest rally of 2012.

The U.S. 10-year yield increased 14 basis points to 2.27 percent and the dollar strengthened versus all 16 major peers.

The Standard & Poor’s 500 Index retreated 0.1 percent to

1,394.28 at 4 p.m. in New York after yesterday closing at its highest level since June 2008. The Dow Jones Industrial Average rose for a sixth day, its longest rally in more than a year, ending up 16.42 points at a more-than four-year high of 13,194.1. Gold futures slid to an eight-week low.

The Fed said yesterday that strains in global financial markets have eased and the labor market is gathering strength.

The central bank said separately that 15 of the nation’s largest

19 banks may keep adequate capital levels even in a recession.

European industrial output rose 0.2 percent in January from the previous month. Chinese Premier Wen Jiabao said relaxing property curbs could cause “chaos” in the market.

“Some worry that with the Fed’s upgrade of the economic environment, they may not do a bond purchase program on the long end,” said Ira Jersey, an interest-rate strategist at Credit Suisse Group AG in New York, one of 21 primary dealers that are required to bid at the auctions.

The yield on the 30-year U.S. Treasury climbed 14 basis points to 3.41 percent, the highest since October. The government today sold $13 billion auction of 30-year bonds at yield of 3.383 percent, the highest since August. The Fed’s 21 primary dealers that are required to bid at the sale were awarded 56.3 percent of the securities, compared with an average of 52 percent for the past five sales. Two-year yields increased four basis points to 0.39 percent.

The S&P GSCI Index of commodities lost 0.8 percent as silver and gold led declines among 21 of 24 raw materials.

Copper dropped the most in a week, losing 1.4 percent to $3.848 a pound, on concern demand will ease in China. Gold for April delivery declined 3 percent to $1,642.90 an ounce. Oil for April delivery slid 1.2 percent to settle at $105.43 a barrel in New York after stockpiles at Cushing, Oklahoma, climbed to the highest level in nine months.

More than two stocks retreated for each that rose on U.S.

exchanges. MetLife Inc. slid 5.8 percent after a plan for a share buyback was rejected by the Fed. The Dow Jones Transportation Average lost 1.4 percent as railroads CSX Corp.

and Norfolk Southern Corp. tumbled at least 2.9 percent. Apple Inc. advanced 3.8 percent to a record $589.58 after Morgan Stanley raised its share-price estimate to $720.

The Dow Jones Industrial Average surged 218 points yesterday and closed at the highest level since 2007, while financial shares in the S&P 500 rallied 3.9 percent as a group, the biggest gain of the year. The Fed said that it expects “moderate economic growth” and predicted the unemployment rate “will decline gradually.”

“Investors globally believe that macro risks have subsided” because of central bank actions, Tony Crescenzi, a strategist at Pacific Investment Management Co., said today in a radio interview on “The Hays Advantage” with Kathleen Hays and Vonnie Quinn. PIMCO manages the world’s biggest bond fund in Newport Beach, California. “The data as it’s accumulated has convinced more and more investors that the U.S. economy is on firmer footing than many previously thought.”

JPMorgan Chase & Co. and Wells Fargo joined banks raising dividends and authorizing share repurchases after passing the stress tests. The results of the Fed’s tests showed that almost three years of economic expansion have helped U.S. banks raise profits, rebuild capital and increase liquidity after the collapse of Lehman Brothers Holdings Inc. in 2008.

Citigroup Inc., the lender that took the most government aid during the financial crisis, said it will resubmit its capital plan to regulators after failing to meet some minimum standards in the tests. Citigroup has repaid $45 billion in TARP money. Chief Executive Officer Vikram Pandit said in a memo to employees today that the bank still plans a “meaningful”

payout to shareholders.

“I was expecting all of the banks to pass, but when you look at the terms, the stress tests were so onerous that a modest miss really isn’t all that discouraging,” said William Fitzpatrick, a Milwaukee-based financial-services analyst at Manulife Asset Management, whose team oversees $800 million.

The Stoxx 600 advanced for a second day as three shares gained for every two that declined. Barclays Plc and Credit Suisse Group AG climbed at least 3.9 percent to lead a rally in bank stocks. EON AG, Germany’s largest utility, jumped 6 percent as earnings exceeded analysts’ estimates. Legal & General Group Plc surged 7.2 percent after the fourth-biggest U.K. insurer by market value boosted its dividend as full-year profit rose.

The dollar advanced 0.4 percent to $1.3026 against the euro and strengthened 1 percent versus the yen. The Dollar Index, a gauge of the currency against six major peers, increased 0.5 percent to the strongest level since January.

The pound strengthened versus 14 of 16 major peers and the yield on the 10-year gilt jumped 17 basis points to 2.34 percent.

Britain is proposing to revive “perpetual gilts,” first used in the wake of the 1720 South Sea Bubble crisis, to allow the government to borrow for as long as possible at record-low rates, according to two people familiar with budget discussions.

Chancellor of the Exchequer George Osborne will use his March 21 budget to announce a consultation on introducing bonds of up to

100 years and reviving debt with no fixed maturity.

The two-year Italian yield slipped four basis points to

1.997 percent as the government sold 6 billion euros ($7.8

billion) of bonds today, with borrowing costs on its three-year debt falling to the lowest since October 2010.

The MSCI Emerging Markets Index was little changed.

Benchmark indexes in Turkey, Poland, Hungary and South Korea gained at least 1 percent, offsetting declines in China and Brazil. Russia’s Micex Index added 0.8 percent.

China’s Shanghai Composite Index sank 2.6 percent, the biggest drop since Nov. 30. A gauge tracking Chinese property stocks in Shanghai slid 3.7 percent. Anhui Conch Cement Co., the nation’s biggest maker of the building material, fell 3.3 percent, and Poly Real Estate Group Co., China’s second-largest developer by market value, slumped 3 percent.

Have a wonderful evening everyone.

Be magnificent!

I am imperfect and want to be perfect – this alone is the starting point of my nonviolence.

The imperfect will turn perfect when it ceases to be and what is not comes into being.

-Acharya Mahaprajna, 1920-2010

As ever,

Carolann

The opposite of love is not hate, it’s indifference.

The opposite of art is not ugliness, it’s indifference.

The opposite of faith is not heresy, it’s indifference.

And the opposite of life is not death, it’s indifference.

-Elie Wiesel, 1928-

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

Senior Vice-President &

Senior Investment Advisor