December 10, 2012 Newsletter

Dear Friends,

Tangents:

Emily Dickinson was born on December 10^th, 1830 at Amherst, Massachusetts.  She was reclusive, mysterious, and frail in health.  Seven of her poems were published during her life, but after her death in 1886, her sister, Lavinia, discovered almost 2,000 more poems written on the backs of envelopes and other scraps of paper locked in Emily’s bureau.  They were published gradually over 50 years, beginning in 1890.  She is now recognized as one of the most original poets of the English-speaking world.

The Only News I Know

-Emily Dickinson

The only news I know

Is bulletins all day

From Immortality.

The only shows I see,

Tomorrow and Today,

Perchance Eternity.

The only One I meet

Is God, – the only street,

Existence; this traversed

If other news there be,

Or admirable show –

I’ll tell it you.

And also on this day in…

1520 – Martin Luther publicly burned the papal edict demanding that he recant or face excommunication.

1901 – The first Nobel Prizes are awarded

1915 – Ford Motors manufactures its One Millionth car

1965 – The Grateful Dead played their first concert, at the Fillmore Auditorium in San Francisco.

1967 – Singer Otis Redding died at age 26 in the crash of his private plane in Wisconsin.

1998 – Six astronauts opened the doors to the new international space station.

2002 – Former President Jimmy Carter accepted the Nobel Peace Prize for his diplomacy in the Middle East in the 1970s.

2007 – Former Vice President Al Gore accepted the Nobel Peace Prize with a call for humanity to rise up against a looming climate crisis.

2009 – President Barack Obama accepted the Nobel Peace Prize with a humble acknowledgment of his scant accomplishments and a robust defense of the U.S. at war.

2009 – James Cameron’s 3-D film epic “Avatar” had its world premiere in London.

Prosperity does not exalt the wise man, nor does adversity cast him down. –Seneca the Younger, 5 BC-65 AD.

photos of the day

December 10, 2012

Children watch as candles are lit for the Jewish holiday of Hanukkah in Jerusalem’s Mea Shearim neighborhood.

Ammar Awad/Reuters

Johan Huibers poses with a stuffed tiger in front of the full-scale replica of Noah’s Ark in Dordrecht, Netherlands. The Ark has opened its doors after receiving permission to receive up to 3,000 visitors per day. In the Bible story, God ordered Noah to build a boat massive enough to save animals and humanity while God destroyed the rest of the earth in an enormous flood.

Peter Dejong/AP

Market Closes for December 10th, 2012:

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

Dec. 10 (Bloomberg) — Canadian stocks rose for a second day as Nexen Inc. and Progress Energy Resources Corp. surged after the government approved takeovers of the energy companies.

Nexen, to be acquired by China-owned Cnooc Ltd. for $15.1 billion, soared 14 percent. Progress, which expects to close its C$5.2 billion ($5.2 billion) deal with Malaysia’s Petroliam Nasional Bhd this week, rose 13 percent. Both deals were approved Dec. 7. Athabasca Oil Corp. and MEG Energy Corp. fell at least 2.4 percent after the government said it will limit foreign takeovers by state-owned companies interested in Canada’s oil sands.

The Standard & Poor’s/TSX Composite Index advanced 70.88 points, or 0.6 percent, to 12,230.47 in Toronto. The equity gauge has gained 2.3 percent this year.

“It’s the haves and the have nots: Nexen and Progress have been taken out, but the state-owned enterprises are on the sidelines now where they won’t be able to buy Athabasca and those sorts of companies,” said Ian Nakamoto, director of research with MacDougall MacDougall & MacTier Inc. in Toronto.

His firm manages about $4 billion. “It doesn’t mean they aren’t still in play, but it’s always better to have more potential suitors.”

The Canadian market was also lifted by optimism for a budget compromise in Washington and better-than-expected economic data from China over the weekend, Nakamoto said.

“The sentiment on the fiscal cliff is positive, but hopefully it doesn’t become too positive because these things can always fall off the rails pretty soon,” Nakamoto said.

U.S. President Barack Obama and House Speaker John Boehner met yesterday at the White House, with representatives for the two leaders offering no details of the negotiations while issuing identical statements afterward that “the lines of communication remain open.” Leaders in the U.S. need to agree on a budget to prevent more than $600 billion of automatic tax increases and spending cuts from coming into effect next year.

China’s industrial production climbed 10.1 percent last month, while retail sales grew 14.9 percent, the statistics bureau said yesterday. Economists in a Bloomberg survey had a median estimate of 9.8 percent growth in industrial production and a 14.6 percent increase in retail sales.

Energy and raw-materials stocks contributed most to gains in the S&P/TSX as all 10 industries advanced. Trading volume was 21 percent higher than the 30-day average, according to data compiled by Bloomberg.

Nexen jumped 14 percent to C$26.44, its biggest gain since July. The deal by Beijing-based Cnooc is the largest-ever takeover by a Chinese company, according to data compiled by Bloomberg. It gives the state-owned company a stake in Canada’s largest oil-sands project and the biggest position in the Buzzard oil field in the U.K. North Sea.

Progress soared 13 percent to C$21.96. Following the acquisition, the companies will make a final investment decision on a proposed liquefied natural gas terminal in British Columbia in late 2014, according to a joint statement on their websites.

The facility may cost $9 billion to $11 billion, with the exports expected in 2018, they said.

MEG Energy, which is developing the Christina Lake project in the Athabasca region of Alberta, fell 3.1 percent to C$33.65 and Athabasca Oil, which is also developing oil sands interests in the Athabasca region, slipped 2.4 percent to C$10. Canadian Prime Minister Stephen Harper introduced new regulations on Dec. 7 that will prevent further controlling investments by foreign state-owned enterprises in the oil sands industry other than in “exceptional circumstances.”

HudBay Minerals Inc. added 5.7 percent to C$10.33 and Dundee Precious Metals Inc. climbed 5.6 percent to C$9.01 as gold for February delivery advanced 0.5 percent to settle at $1,714.40 an ounce in New York.

Silver Standard Resources Inc. rose 5 percent to C$14.29 and Silver Wheaton Corp. added 2.1 percent to C$36.15. Silver for March delivery rose 0.7 percent to $33.377 an ounce in New York.

US

By Rita Nazareth and Adria Cimino

Dec. 10 (Bloomberg) —  U.S. stocks advanced, after the longest weekly rally in the Standard & Poor’s 500 Index since August, as economic data in China beat estimates and investors watched the latest developments in American budget talks.

McDonald’s Corp., the largest restaurant chain, added 1.1 percent as its November sales rose 2.4 percent globally. Cliffs Natural Resources Inc. and Newmont Mining Corp. rose at least 1.5 percent to pace gains in commodity producers. American International Group Inc. slid 2.3 percent after the insurer said superstorm Sandy will cost the company about $1.3 billion.

The S&P 500 rose less than 0.1 percent to 1,418.55 at 4 p.m. New York time. The Dow Jones Industrial Average added 14.75 points, or 0.1 percent, to 13,169.88. About 5.3 billion shares changed hands on U.S. exchanges, or 15 percent below the three- month average, according to data compiled by Bloomberg.

“China hit that trough and is starting to see an acceleration of growth,” said Tom Wirth, who helps manage $1.6 billion as senior investment officer for Chemung Canal Trust Co., in Elmira, New York, said in a phone interview. “As far as our market goes, I don’t think there’s anything out there right now. It’s waiting on the politicians.”

China’s stocks rose the most among Asian equity markets today as the Shanghai Composite Index jumped to a four-week high after factory output and retail sales data beat economists’ estimates. U.S equities fell earlier today as Italian Prime Minister Mario Monti said he lost support and will resign.

In the U.S., lawmakers from both parties are leaving rhetorical room for a split-the-difference agreement with President Barack Obama on a U.S. budget deal. The president and House Speaker John Boehner met one-on-one yesterday at the White House, with representatives for the two leaders offering no details of the negotiations yet issuing identical statements afterward that “the lines of communication remain open.”

McDonald’s added 1.1 percent to $89.41. Analysts projected a gain of 0.2 percent for sales at stores open at least 13 months, the average of 14 estimates compiled by Consensus Metrix. Sales in the U.S. increased 2.5 percent, the Oak Brook, Illinois-based company said today in a statement. Analysts anticipated a drop of 0.6 percent.

Commodity shares gained. Cliffs Natural added 4.6 percent to $30.86. Newmont Mining increased 1.6 percent to $45.11.

Halozyme Therapeutics Inc. added 3.5 percent to $5.94 after a filing by partner Roche Holding AG with European regulators triggered a $4 million milestone payment.

Comtech Telecommunications Corp. climbed 3.9 percent to $25.06. The satellite equipment maker that derives about half its revenue from the U.S. government rose after a rating upgrade by JPMorgan Chase & Co.

AIG lost 2.3 percent to $33.36. The company will make a capital contribution of $1 billion to its U.S. property-casualty subsidiaries, the New York-based insurer said. Sandy’s cost was about $2 billion before tax, AIG said. Sandy made landfall in New Jersey in October and damaged homes, vehicles and commercial property while interrupting business in states including New York.

The S&P 500 Retailing Index dropped 1.5 percent in the biggest decline among 24 groups. Priceline.com Inc. retreated 5 percent to $625.96. The online travel service was downgraded to hold from buy at Deutsche Bank AG by equity analyst Ross Sandler. The 12-month share-price estimate is $710.

Options traders are sending bearish contracts on Dell Inc. to the lowest level in seven years, reducing hedges after the stock plunged 29 percent this year and the third-biggest personal computer maker took steps to expand into new businesses.

Puts protecting against a 10 percent decline in the shares cost 0.98 point more than calls betting on a 10 percent gain, based on three-month data compiled by Bloomberg. The price relationship known as skew reached 0.38 on Nov. 15, the lowest since August 2005. While Dell shares have climbed 18 percent since reaching a 3 1/2-year low on Nov. 16, the stock is trading near its cheapest level compared with analysts’ profit estimates since 2009.

Dell is expanding with acquisitions in other businesses as customers turn to smartphones and tablets and demand for PCs declines. Goldman Sachs Group Inc. last week recommended buying the shares on speculation the company may be acquired.

Dell is buying companies that are “very high-margin, very high-growth,” Brian Frank, a money manager at Frank Capital LLC, which oversees $25 million, said in a Dec. 3 interview at Bloomberg’s headquarters. The New York-based investment firm has 3.2 percent of its assets in Dell, making the stock its ninth- largest holding, according to Frank.

Have a wonderful evening everyone.

Be magnificent!

Though they may take various roads, all are on the way.

Swami Vivekananda, 1863-1902

As ever,

Carolann

Unrest of spirit is a mark of life.

-Karl Menninger, 1893-1990

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