September 11, 2012

Dear Friends,

Tangents:

Sptember 11, 2001: In an unprecedented, highly coordinated attack, terrorists hijack four U.S. passenger airliners, flying two into the World Trade Center towers in New York and one into the Pentagon, killing thousands. The fourth airliner, headed toward Washington likely to strike the White House or Capitol, is crashed just over 100 miles away in Pennsylvania after passengers storm the cockpit and overtake the hijackers.

Ground Zero – March 17, 2012

September 11, 2012:  Someone stops to read names in New Jersey’s memorial to the 749 people from the state lost during the Sept. 11 terrorist attacks on the World Trade Center, as One World Trade Center, now up to 104 floors, looms in the distance across the Hudson River from Jersey City, N.J. Americans paused today to mark the 11th anniversary of the terrorist attacks.

Mel Evans/AP

And also on this day in…

1862 – O. Henry, author, is born.

1885 – D.H. Lawrence is born.
1916 – The “Star Spangled Banner” is sung at the beginning of a baseball game for the first time in Cooperstown, New York.
1962 – Thurgood Marshall is appointed a judge of the 2nd Circuit Court of Appeals.
1965 – The 1st Cavalry Division (Airmobile) arrives in South Vietnam and is stationed at An Khe.
1974 – Haile Selassie I is deposed from the Ethiopian throne.

Sorrow was like the wind.  It came in gusts. – Marjorie Kinnan  Rawlings, 1896-1953

photos of the day September 11, 2012

A young Bavarian herdswoman rests after the return of cattle from summer pastures in the mountains near Bad Hindelang, southern Germany. At the end of the summer season, farmers move their herds down from the Alps to the winter pastures in the valley.

Matthias Schrader/AP

A woman watches a model present a creation from the Rodarte Spring/Summer 2013 collection during New York Fashion Week.

Lucas Jackson/Reuters

Market Closes for September 11^th, 2012:

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

Sept. 11 (Bloomberg) — Canadian stocks rose, erasing losses in the final half hour of trading, as gold and oil rose ahead of a U.S. Federal Reserve policy meeting.

Canadian Natural Resources Ltd. added 1.7 percent as crude increased for a fifth day. San Gold Corp. rallied 9.6 percent after gold advanced for the third time in four days. Royal Bank of Canada, the nation’s largest lender, dropped 1.1 percent after reorganizing its five main business units.

The Standard & Poor’s/TSX Composite Index added 5.02 points, or less than 0.1 percent, to 12,220.45 in Toronto, after slipping as much as 0.2 percent earlier. The benchmark equity gauge has advanced 2.2 percent this year.

“Whatever the Fed is expected to do has already been priced in,” said Danielle Park, portfolio manager with Venable Park Investment Counsel Inc. Her firm manages assets of $1 million or more for at least 250 families. “The trouble is how they can surprise. The Fed doesn’t want to just confirm market beliefs at this point. It’s an ineffective tool unless there’s a surprise factor.”

The U.S. Fed’s Open Market Committee is set for two days of meetings that start tomorrow. Fed Chairman Ben S. Bernanke said on Aug. 31 he wouldn’t rule out steps to lower an unemployment rate he described as a “grave concern.”

Park said there is a greater chance the Fed will disappoint investors, and markets will struggle in the coming months as a global recession kicks in.

Stocks rose earlier after Germany’s Federal Constitutional Court said it would issue its ruling on the 500 billion-euro

($640 billion) European Stability Mechanism bailout plan as scheduled tomorrow, without further comment on the bid to delay the case by lawmaker Peter Gauweiler. He argued the court should delay the ruling after the European Central Bank pledged unlimited funds to buy government bonds.

Canadian Natural Resources advanced 1.7 percent to C$32.18 and Crew Energy Inc. added 2.4 percent to C$7.40, its highest level since April. Crude for October delivery gained 0.7 percent to settle at $97.17 a barrel in New York.

San Gold, which has plunged 46 percent this year, increased 9.6 percent to C$1.03, and Aurizon Mines Ltd. rose 1.8 percent to C$4.61. Gold for December delivery added 0.2 percent to settle at $1,734.90 in New York.

Royal Bank declined 1.1 percent to C$55.81 after the bank said Jim Westlake, head of international banking and insurance, will retire at the end of October. Royal Bank will shuffle its five main business divisions, creating a new investor and treasury services unit to serve institutional clients.

Thompson Creek Metals Co. Ltd., a molybdenum miner that is the third-worst performer on the S&P/TSX materials index this year, surged 4.9 percent to C$3.22. The stock has risen 16 percent this month.

Research In Motion Ltd. rose 4 percent to C$7.27 ahead of a presentation tomorrow from Apple Inc., during which the tech giant is expected to introduce the iPhone 5 smartphone. RIM, which plans to launch its own next-generation BlackBerry 10 line of smartphones next year, has steadily lost market share to competitors such as Apple and Samsung Electronics Co.

Bombardier Inc. added 0.9 percent to C$3.57. Shares have fallen 12 percent this year, compared with a 7.9 percent gain in the S&P/TSX Industrials index. Chief Executive Officer Pierre Beaudoin said the upcoming CSeries jet is “still on target”

for its first flight this year. The first delivery will take place a year after the maiden flight, Beaudoin said in a Bloomberg TV interview today in Tianjin, China.

In July, aerospace unit chief Guy Hachey said issues with the jet’s fly-by-wire system, which electronically transmits pilot commands to plane controls, might delay the flight.

US

By Inyoung Hwang

Sept. 11 (Bloomberg) — U.S. stocks rose, after yesterday’s drop in the Standard & Poor’s 500 Index, amid speculation the Federal Reserve will act to stimulate the economy.

Alcoa Inc. and Caterpillar Inc. climbed at least 1.7 percent, pacing gains among the biggest companies. Eight out of 10 groups in the S&P 500 rose. Morgan Stanley jumped 3.9 percent after saying it will purchase the rest of its brokerage joint venture from Citigroup Inc. Ralph Lauren Corp. led declines among luxury goods companies as Burberry Group Plc said profit will be at the lower end of estimates

The S&P 500 added 0.3 percent to 1,433.56 at 4 p.m. in New York. The Dow Jones Industrial Average gained 69.07 points, or

0.5 percent, to 13,323.36 today. Volume for exchange-listed stocks in the U.S. was 5.9 billion shares, or almost in line with the three-month average.

“The market is anticipating that there will be some stimulus move on the part of the Fed,” John Praveen, chief investment strategist at Prudential International Investments Advisers, a unit of Newark, New Jersey-based Prudential Financial Inc., which manages about $960 billion, said by telephone. “The market is grinding higher on liquidity because of what central banks have done and on hopes of further stimulus from the Fed and positive moves from European policy makers.”

The S&P 500 is less than 10 percent from its record closing high after rising 14 percent this year. The equities index is 20 percent above its level on Sept. 15, 2008, the first trading day after Lehman Brothers Holdings Inc. filed the world’s biggest bankruptcy and prompted a 46 percent drop through March 9, 2009.

The benchmark gauge fell 0.6 percent yesterday as concern Greece’s debt crisis will worsen overshadowed speculation that central banks will take steps to support the global economy.

Equities advanced today ahead of a two-day meeting starting tomorrow in which the Federal Open Market Committee will discuss additional measures to stimulate the U.S. economy. Fed Chairman Ben S. Bernanke said on Aug. 31 he wouldn’t rule out steps to lower an unemployment rate he described as a “grave concern.”

A report from the Commerce Department showed that the country’s trade deficit widened in July for the first time in four months as the global economic slowdown reduced demand for American-made goods. The National Federation of Independent Business’s optimism index rose last month to 92.9 from a nine- month low of 91.2 in July, indicating confidence among small businesses in the U.S. climbed in August as more companies anticipated a pickup in hiring and sales.

U.S. equities also rose as Germany’s Federal Constitutional Court said it will issue a ruling tomorrow on whether to allow the country to ratify the 500 billion-euro ($640 billion) European Stability Mechanism. The court rejected an argument by lawmaker Peter Gauweiler that it delay the decision after the European Central Bank pledged unlimited funds last week to buy government bonds.

The S&P 500 climbed to its highest level since 2008 on Sept. 6 as the ECB approved the bond-buying program to lower borrowing costs for the most-indebted euro-area states.

“Everybody is waiting to see what the Fed and German court will do,” Greg Peterson, director of investment research at Ballentine Partners LLC in Waltham, Massachusetts, which has about $4 billion in assets, said by telephone. “Europe keeps on walking up to the cliff and stepping back just enough not to fall off. Ultimately, through small steps, they’ll come to a solution to this crisis that they’re having.”

Alcoa, the largest U.S. producer of aluminum, jumped 3.1 percent to $9.33, its highest level since May. Caterpillar, the world’s biggest maker of construction and mining equipment, rallied 1.7 percent to $88.60. Cliffs Natural Resources Inc., the largest iron-ore producer in the U.S., added 6.4 percent to $41.68.

Energy companies jumped the most in the S&P 500’s 10 groups, rising 0.9 percent, followed by financial and industrial stocks. The Morgan Stanley Cyclical Index rallied 1 percent as investors bought shares of companies most tied to economic growth. The gauge is up 14 percent from its low this year in June.

Morgan Stanley will purchase 14 percent of its brokerage joint venture from Citigroup at a price that values the total unit at $13.5 billion — or about 40 percent less than Citigroup’s earlier estimate. Citigroup expects the sale to result in a $2.9 billion charge in the third quarter.

Morgan Stanley climbed 3.9 percent to $17.25, while Citigroup advanced 2.6 percent to $32.66. Diversified financial companies posted the biggest gain out of 24 groups in the S&P 500, rising 1.7 percent. Bank of America Corp. jumped 5.2 percent to $9.03, the highest since April.

Green Mountain Coffee Roasters Inc. jumped 5.9 percent to $32.16. Luigi Lavazza SpA said in a filing after the market closed yesterday that it increased its stake to 6.8 percent.

Lavazza owned 5 percent of the maker of Keurig brewers and single-serve pods as of Feb. 24, data compiled by Bloomberg show.

Legg Mason Inc., the money manager reeling from 19 straight quarters of client redemptions, jumped 5.4 percent to $26.85.

The Baltimore-based company said today in a statement that Mark R. Fetting will step down as chairman and chief executive officer on Oct. 1, two months before a standstill agreement with activist investor Nelson Peltz expires.

Ralph Lauren lost 2.6 percent to $156.22, while Tiffany & Co. erased 1.2 percent to $62.26. London-based Burberry said full-year profit will be at the lower end of analyst estimates after sales growth slowed. Coach Inc. fell 1.8 percent to $61.48 after Brean Murray Carret & Co. lowered its rating on the largest U.S. luxury handbag maker to hold from buy.

Airline stocks fell, sending the Bloomberg U.S. Airlines Index 1.4 percent lower. Dahlman Rose & Co.’s Helane Becker cut her estimates for third-quarter sales to reflect higher jet-fuel costs and “cautious” expectations for traffic this month. U.S.

Airways Group Inc. lost 3.2 percent to $11.62, while Southwest Airlines Co. slid 2.2 percent to $8.95.

Moody’s Investors Service, which placed a negative outlook on the U.S.’s Aaa grade in August, said in a statement today that the nation’s rating would likely be cut to Aa1 if negotiations between lawmakers fail to produce policies that reduce the percentage of debt to gross domestic product.

Goldman Sachs Group Inc.’s David Kostin said yesterday a deal to head off automatic tax increases and spending cuts at the start of next year may be “messy” and could hurt stocks.

The so-called fiscal cliff “is unlikely to be resolved in a smooth fashion, and probably will be resolved in a messy way,” Kostin, the New York-based firm’s chief equity strategist, said yesterday at a conference in San Diego sponsored by the Insured Retirement Institute.

The benchmark gauge for U.S. equities slumped within 1 percent of a bear market from April through October last year as S&P stripped the U.S. of its AAA credit rating.

Have a wonderful evening everyone.

Be magnificent!

The important question for me is,

is the body a source for creating, for realizing yourself,

for realizing what life is all about?  You ask this question

and you go where it takes you and then you ask another question

and then again you follow.  So this understanding of the body, of the unity within the body

and the innumerable areas which it reveals to you is what I call realization.

Chandralekha, 1929-2006

As ever,

Carolann

Show me a hero and I will write you a tragedy.

-F. Scott Fitzgerald, 1896-1940

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