January 8, 2013 Newsletter

Dear Friends,

Tangents:

Looking for some great wines with great flavor for under $20.00?  Start the new year with these fresh sips!

Cline Zinfandel 2010, California – Price $15 | Score 85/100

Peppery, tobacco leaf, licorice root, cedar, resin, plum and herbal aromas. Round, fresh, warm and slightly sweet palate with light tannins. Black plum, chocolate, peppery, tobacco leaf, leather, meaty, resin flavors with a pruny finish.

Monte Nobile Nero d’Avola 2010, Sicily, Italy – Price $15 | Score 86/100

This simple Italian red is both dry and fresh with meaty, cherry, licorice and dried floral aromas. The palate is similar if slightly astringent with cherry, prune, coffee and tobacco flavors with a bit of chocolate in the finish. There is good fruit and concentration. Good value in a spaghetti red.

The Show Malbec 2011, Mendoza, Argentina – Price $19 | Score 87/100

Charles Bieler, Roger Scommegna and Joel Gott are the 3 Thieves Wine Company and The Show Malbec is a blend of high-altitude fruit from Luan de Cuyo and the Uco Valley. The ’09 is a touch better than last year with ripe sweet fruit, all aged in soft sweet American oak. There is a bit of a savory element that saves it from being too sweet. Serve this with grilled ribs or steaks to best effect.

Las Perdices Cabernet Sauvignon 2010, Mendoza, Argentina – Price $17 | Score 87/100

Peppery, cassis, rooty, licorice, compost, vanilla, coffee, black olive aromas. Fresh, juicy, round, supple palate with savory, peppery, black olive, cassis, blackberry, tobacco leaf and leather flavors with a coffee, warm prune finish. A bit hot and ripe but with fine overall balance. Try this with grilled meats, meat pasta dishes and soft cheeses. Good value

My personal favorite under $20.00, would have to be Apothic Red.  This wine is priced at $15.95 and has a Ruby color. The aromas include plum, blackberry, spice notes, raspberry and vanilla.  It’s a medium body wine with layers of ripe fruit and vanilla flavors with a long finish.

Looking for something a little more pricy?? Try out Châteauneuf du Pape, another one of my personal favorites. This wine is thick, harsh, powerful and richly colored. It’s a red wine only and is elaborated with 13 authorized and controlled grape-varieties among which Syrah, Grenache and Clairette.

“Be faithful in small things because it is in them that your strength lies.” – Mother Teresa

On this day in…

1838 – Alfred Vail demonstrated a telegraph code he had devised using dots and dashes as letters. The code was the predecessor to Samuel Morse’s code.

1853 – A bronze statue of Andrew Jackson on a horse was unveiled in Lafayette Park in Washington, DC. The statue was the work of Clark Mills.

1856 – Borax (hydrated sodium borate) was discovered by Dr. John Veatch.

1886 – The Severn Railway Tunnel, Britain’s longest, was opened.

1889 – The tabulating machine was patented by Dr. Herman Hollerith. His firm, Tabulating Machine Company, later became International Business Machines Corporation (IBM).

1901 – The first tournament sanctioned by the American Bowling Congress was held in Chicago, IL.

1916 – During World War I, the final withdrawal of Allied troops from Gallipoli took place.

1918 – U.S. President Woodrow Wilson announced his Fourteen Points as the basis for peace upon the end of World War I.

1921 – David Lloyd George became the first prime minister tenant at Chequers Court, Buckinghamshire.

1929 – William S. Paley appeared on CBS Radio for the first time to announce that CBS had become the largest regular chain of broadcasting chains in radio history.

1955 – After 130 home basketball wins, Georgia Tech defeated Kentucky 59-58. It was the first Kentucky loss at home since January 2, 1943. 

“Success is not final, failure is not fatal: it is the courage to continue that counts.” – Winston Churchill

Photos of the day January 8^th, 2013

An Oman fan is seen before their match against Qatar during the Gulf Cup Tournament soccer match at Isa Sports City in Isa Town, Bahrain. Photo: Mohammed Dabbous/Reuters

The San Francisco Bay Bridge is pictured in San Francisco, California on January 7, 2013, with the Golden Gate Bridge at bottom right. Photo: Noah Berger/Reuters

A snowboarder glides down a ski path at Sno Mountain on Monday, Jan. 7, 2013 in Scranton, Pa.Photo: Butch Comegys/The Scranton Times-Tribune/AP

“Give light and people will find the way.” – Ella Baker

Market Closes for January 8^th, 2013:

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

Jan. 8 (Bloomberg) — Canadian stocks erased losses in the last half hour of trading as financial shares reversed earlier declines and gold gained the most in a week.

Manulife Financial Corp. added 2.6 percent and Bank of Nova Scotia rose 0.2 percent. Goldcorp Inc. jumped 3.2 percent, while Barrick Gold Corp. retreated 1.3 percent after it said it has ended talks with China National Gold Group Corp. to sell its African unit. Sears Canada Inc. lost 3.5 percent after same- store sales fell for the nine-week period ended Dec. 29.

The Standard & Poor’s/TSX Composite Index rose 5.26 points, or less than 0.1 percent, to 12,504.81 in Toronto, reversing earlier losses of as much as 0.4 percent. The benchmark gauge has risen 0.6 percent this year, trailing every developed market in the world.

“We’re in a holding pattern: Everybody was waiting for the fiscal cliff, and we had a rally after that, but now there seem to be other mini-cliffs that the market is waiting for,” said Anish Chopra, managing director and fund manager with TD Asset Management Inc. in Toronto. The firm manages about C$204 billion ($206.5 billion).

The S&P/TSX rose 1.8 percent last week as a budget compromise was reached in Washington that averted most of the so-called fiscal cliff of spending cuts and tax increases.

Goldcorp added 3.2 percent to C$35.81. Futures for February delivery of the metal rose 1 percent to settle at $1,662.20 an ounce on the Comex in New York amid increasing demand from China, the world’s second-biggest buyer. That was the biggest gain for a most-active contract since Dec. 31.

Materials producers and financial companies contributed most to gains in the S&P/TSX as six of 10 industries rose.

Manulife added 2.6 percent to C$14.39. Bank of Nova Scotia rose 0.2 percent to C$57.77.

Canadian Natural Resources Ltd. declined 1.5 percent to C$29.34 after an executive said the company needs to see higher returns and lower costs before developing its gas projects.

Suncor Energy Inc., Canada’s largest oil producer, slipped 0.3 percent to C$33.14 and Encana Corp. declined 1.9 percent to C$19.55.

Barrick decreased 1.3 percent to C$33.14 after cutting off sale talks with China National for its African unit, African Barrick Gold Plc. African Barrick was spun off by Barrick in March 2010 and has since struggled to meet production targets amid operational setbacks.

Sears Canada dropped 3.5 percent to C$9.70 after its parent, Sears Holdings Corp., said the Canadian unit’s same- store sales during the nine-week holiday shopping period slid 5.8 percent.

Fourth-quarter earnings before certain items including taxes and interest is expected to be about half of the year-ago result for the Canadian unit, Sears said in a statement. It cited a decline in electronics sales as well as unseasonably warm temperatures in most parts of Canada.

US

By Rich Miller and William Selway

Jan. 8 (Bloomberg) — State and local governments are in their best financial shape since the recession, giving them leeway to cushion the U.S. economy from federal budget cuts with spending and hiring of their own.

After slashing their workforces by about half a million in the past five years, state and local authorities will add employees in 2013, said Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. Their payrolls in the fourth quarter will be 220,000 larger than in the same period for 2012, he projects.

Their expenditures and investment also will be higher, rising by 1.8 percent, triple the increase last year, according to projections by St. Louis-based Macroeconomic Advisers.

“The bloodletting on the state- and local-government level has finally passed through,” said Jim Diffley, chief U.S. regional economist for IHS Global Insight in Philadelphia.

“They’re no longer subtracting from growth.” The shift will help the U.S. weather the blow from federal tax increases and spending cuts, keeping the expansion on course, Zandi said. He forecasts that gross domestic product will climb 2.1 percent this year after rising 2.3 percent in 2012, with the expansion getting stronger as the year progresses.

States and municipalities, which accounted for 12 percent of GDP in 2011, won’t be a drag on growth this year for the first time since 2009, said Ben Herzon, a senior economist at Macroeconomic Advisers. The economic rebound means they’re collecting more taxes, reducing the need for more spending cuts.

State revenue will increase 3.9 percent during the 2012-2013 budget year to surpass the peak reached before the full effect of the 18-month recession took hold, according to a Dec. 14 report by the National Governors Association and the National Association of State Budget Officers.

Fifty-seven percent of cities said they were “better able to meet financial needs” in 2012 than in 2011, the first time a majority reported an improvement since the economic contraction that began in December 2007, a separate National League of Cities survey released Sept. 13 found.

The improvement in finances has helped allay concerns among investors about defaults in the tax-exempt municipal-bond market, where the securities have rallied in anticipation of higher taxes on the wealthy. The $3.7 trillion muni market returned 7.3 percent in 2012, compared with 2.2 percent for U.S. Treasury debt, according to Bank of America Merrill Lynch data.

Last year was the fourth in a row for gains in total municipal- bond returns, the longest such stretch since 2007.

Last week’s federal budget deal, which included a rise in the top income-tax rate to 39.6 percent from 35 percent, was “positive for municipals,” said Alan Schankel, head of fixed- income research at Janney Montgomery Scott LLC in Philadelphia.

Bill Gross, manager of the world’s largest bond fund at Pacific Investment Management Co. in Newport Beach, California, has directed 5 percent of the fund’s $285 billion to munis for three straight months — the longest since at least 2006 that local borrowings have represented that large a share of holdings.

Gross said he’s taking a “cautious” approach to state and local debt because Congress may change the tax-exempt status of the securities.

“We’re holding on to our positions, but muni rates are in this cloud of ‘will they or won’t they’ be taxed in terms of withholdings,” he told Bloomberg Television’s “Market Makers” on Jan. 4.

Faced with the need to balance their budgets, state and local governments were forced into austerity mode after the recession hit, Diffley said. That continued into last year.

Payrolls in December alone fell 10,000 on a seasonally-adjusted basis, as reductions by counties and cities overwhelmed an increase by the states, according to data from the Labor Department in Washington.

Now they may be poised to expand, said Donald Boyd, a senior fellow at the Rockefeller Institute of Government in Albany, New York. “We’re likely to see some growth in payrolls” this year, he said.

California, the most-populous U.S. state, will end unpaid furlough days for its workers in June, a policy it first put in place in 2009 at the height of the financial crisis.

Building also is picking up. After falling in March to its lowest level in more than five years, construction by state and local governments rose 2.3 percent to a seasonally-adjusted annual rate of $252 billion in November, figures from the Commerce Department in Washington show.

The country’s third most-populous state, New York, may break ground this year on a $3.14 billion new bridge to replace the 57-year-old Tappan Zee crossing over the Hudson River. The city government in Oxford, Mississippi, is building a new firehouse, expanding tennis courts and giving its employees a 3 percent raise, Mayor George Patterson said.

“We kept our heads down for a few years, but this year we feel like we’re turning the corner,” he said.

That’s not to say states and municipalities are trouble- free. While they’ve come through the worst of the crisis, they still face longer-term financial challenges, including rising costs for the Medicaid health-care program and underfunded pension plans, Boyd said.

He cited another big danger: the likelihood that the federal government will reduce its aid to the states as it seeks to rein in a budget deficit that has topped $1 trillion in each of the past four years. States get about one-third of their revenues from Washington.

The agreement Congress hammered out to avoid more than $600 billion in automatic spending reductions and tax increases –the so-called fiscal cliff — spared states from cutbacks, at least for now. Under the pact, the decrease in expenditures was put off until March.

The reductions would have cost states $7.5 billion for education, health-care and community-development programs, according to Federal Funds Information for States, a budget- tracking service created by the National Conference of State Legislatures, based in Denver, and the National Governors Association in Washington.

While that’s a small share of the approximately $519 billion that states received in aid last year, Boyd said further cuts are likely.

That means local governments may get less help from the states, Diffley said.

Cities and counties also are lagging behind because they depend on property taxes for much of their revenue, and home prices are just now starting to recover, he added. Prices rose 4.3 percent in October from a year earlier, the biggest 12-month advance since May 2010, according to the most recent data from the S&P/Case-Shiller Composite 20-City Home Price Index.

Columbus, Ohio, fired more than 100 workers when the worst of the recession hit the city and successfully sought approval for higher income taxes from voters, said Dan Williamson, a spokesman for Mayor Michael Coleman. Now it is holding employment steady, he said.

It has been working on a $342 million sewer project and is planning another program to create more parkland along its riverfront.

“We faced our own fiscal cliff in 2009,” Williamson said. “Now, we’re in very good shape. There’s always stresses, there’s always worries, but we feel whatever comes our way in the near term, we can handle it.”

Have a great evening everyone!!!

Be Magnificent!

“The function of education is to teach one to think intensively and to think critically. Intelligence plus character – that is the goal of true education.” – Martin Luther King, Jr.

Amanda Bourke

Assistant to Carolann Steinhoff

Queensbury Securities Inc.

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8X 3Y7

Tel: 778-430-5808

Fax: 778-430-5838