August 17, 2012 Newsletter

Dear Friends,

Tangents:

Hello all, I’m filling in for Carolann again today so I thought I would share something interesting I came across on the internet recently. Visually striking and more than a little bit haunting is the abandoned theme park know as Wonderland. Built in the Chenzhuang Village of China, about 20 miles northwest of central Beijing, Wonderland was to be the largest amusement park in all of Asia. However, after some disagreements with the local government in 1998, construction was stopped. Developers tried restart the project in 2008, but were unable to resume construction. The land and half built amusement park now function as one of the most bizarre looking corn fields in the world. Reuters photographer David Gray visited the site in early December of last year and published an absolutely beautiful photoset that you can view here:

http://www.theatlantic.com/infocus/2011/12/chinas-abandoned-wonderland/100207/

photos of the day August 17, 2012

An industrial climber ropes down the cupola of Berlin Cathedral with the television tower in the background during inspection works in Berlin, Germany. The new cross atop Berlin Cathedral was installed four years ago and undergoes regular inspections every two years.- Gero Breloer/AP

Pakistani men (c.) count money they collected for worshipers to be delivered to poor families, on the last Friday of the Muslim holy fasting month of Ramadan, in a mosque in Gujranwala, Pakistan.

– Aftab Rizvi/AP

Market Closes for August 17, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Katia Dmitrieva

Aug. 17 (Bloomberg) — Canadian stocks rose for a fourth day, the longest streak in a month, as an index of U.S. leading economic indicators rose more than forecast and optimism grew Europe’s policy makers will take steps to ease the debt crisis.

Royal Bank of Canada, the largest lender in the country, and Toronto-Dominion Bank advanced at least 0.9 percent.

Canadian Oil Sands Ltd. advanced 1.9 percent. Banks and energy companies contributed the most to gains among 10 industries on the Standard & Poor’s/TSX Composite Index.

The S&P/TSX gained 57.31 points, or 0.5 percent, to 12,089.89. The benchmark index rose 1.7 percent this week, erasing losses for the year and leaving it up 1.1 percent in 2012.

German Chancellor Angela Merkel affirmed support for the euro during a press conference in Ottawa yesterday. She is considering easing Greece’s bailout terms, fanning tensions with members of her coalition who oppose giving the Greek government any more concessions, two German lawmakers said.

“The comments out of Merkel are reinforcing that belief that if you’ve missed this bounce, you’ve gotta start buying to get back into the market to catch up,” Greg Taylor, who helps manage C$5.5 billion at Toronto-based Aurion Capital Management Ltd., said in a phone interview.

Merkel’s government is torn between showing some leniency toward Greece as it struggles to meet the terms of its rescues and insisting that Prime Minister Antonis Samaras deliver on his promises, Klaus-Peter Willsch and Frank Schaeffler, both of whom have voted against Merkel’s euro crisis policies in parliament, said in separate telephone interviews.

In the U.S., the Conference Board’s gauge of the economic outlook for the next three to six months increased 0.4 percent after a revised 0.4 percent drop in June, the New York-based group said today. Economists projected the gauge would rise by 0.2 percent, according to the median estimate in a Bloomberg survey.

Royal Bank added 1 percent to C$53.99. Toronto-Dominion advanced 0.9 percent to C$81.24. Canadian Imperial Bank of Commerce was up 0.6 percent to C$75.77.

Oil advanced for a fourth day in New York, reversing declines in earlier trading. Canadian Oil Sands advanced 1.9 percent to C$21.94. Penn West Petroleum Ltd. added 2.1 percent to C$14.45.

Gold swung between gains and losses in New York. Goldcorp Inc. added 0.4 percent to C$38.08. Kinross Gold Corp., the fourth largest gold miner in Canada, slipped 0.2 percent to C$8.23. Eldorado Gold corp. declined 0.4 percent to C$11.71.

Lake Shore Gold Corp. tumbled 16.2 percent to 93 Canadian cents.

US

By Lu Wang and Daniel Kruger

Aug. 17 (Bloomberg) — U.S. stocks rose, sending benchmark indexes to near the highest levels in more than four years, amid better-than-forecast economic data. Treasuries halted a four-day drop, pulling 10-year yields down from a three-month high.

The Standard & Poor’s 500 Index climbed 0.2 percent to 1,418.16, less than one point below its highest closing level since May 2008, and the Dow Jones Industrial Average briefly topped its best close since December 2007. Rates on 10-year notes lost two basis points to 1.81 percent after yesterday climbing as high as 1.86 percent, matching their 200-day moving average. The Stoxx Europe 600 Index rose to a 13-month high and Spain’s bonds rallied as concern over the debt crisis eased.

Better-than-forecast data on consumer confidence and leading economic indicators weren’t enough to send the S&P 500 above 1,419.04, its four-year high reached in April. Treasuries still fell for a fourth week, the longest streak since 2010, as improving data reduced demand for the safety of U.S. debt. In Europe, speculation grew that policy makers will take steps to protect the region’s banks, helping the Stoxx 600 extend its rebound from a June low to 17 percent.

“Today’s data is just a couple more pieces of the puzzle that show improvement, but not all that great,” Terry L. Morris, who helps oversee about $2.5 billion at Wyomissing, Pennsylvania-based National Penn Investors Trust Co., said in a phone interview. “The general attitude is optimistic, maybe more optimism than the market should have.”

Trading of S&P 500 companies was about 13 percent below the 30-day average and the index swung no more than 0.29 percent from its high to its low of the session, the smallest fluctuation since 2006.

The Dow climbed 25.09 points, or 0.2 percent, to 13,275.20 and rose as high as 13,281.32.

Gap Inc. and J.M. Smucker Co. jumped at least 4.8 percent after earnings topped analyst estimates. Apple Inc. rose to a record $648.11 and exceeded $600 billion in market value for the first time after Jefferies & Co. said the company had started production of the iPad mini, a smaller version of its popular tablet.

Marvell Technology Group Ltd. slumped 14 percent after predicting profit that fell short of forecasts.

As the S&P 500 approached its highest level since 2008, the cost of using options to protect against declines in the benchmark index slid to a five-year low. The Chicago Board Options Exchange Volatility Index, the benchmark for U.S. options known as the VIX, sank 5.9 percent to 13.45 today, its lowest level since June 2007.

Today’s reports on U.S. consumer confidence and leading economic indicators added to optimism about the economy after data this week that showed retail sales jumped more than expected and applications for building permits rose to the highest since August 2008.

The Thomson Reuters/University of Michigan preliminary August index of consumer sentiment increased to 73.6, the highest level since May, from 72.3 the prior month. The gauge was projected to be little changed at 72.2, according to the median forecast of 72 economists surveyed by Bloomberg.

The Conference Board’s gauge of the outlook for the next three to six months increased 0.4 percent after a revised 0.4 percent drop in June, the New York-based group said today.

Economists projected the gauge would rise by 0.2 percent, according to the median estimate in a Bloomberg survey.

Thirty-year yields today slipped two basis points to 2.93 percent, while rates on two-year debt lost less than one basis point to 0.29 percent.

The Stoxx 600 climbed 1.1 percent over five days to cap an 11th straight weekly gain, its longest rally since January 2006.

Bankinter SA and Bankia SA rallied more than 2 percent on speculation the European Union will disburse the first installment of a 100 billion-euro ($124 billion) bailout facility to Spain’s lenders. Swiss Life Holding AG jumped 3.1 percent as the biggest Swiss life insurer’s first-half profit exceeded analysts’ estimates

Spanish bonds outperformed all their euro-area peers today, with the nation’s 10-year yield falling eight basis points to 6.44 percent. The rate lost 46 basis points this week, the biggest decline since the five days through July 27. Spain’s two-year yield dropped 22 basis points to 3.77 percent today.

The two-year yield may fall to as low as 2 percent should the ECB buy debt through its bond-purchase program, said Steven Major, head of fixed-income research at HSBC Holdings Plc in London.

“It’s all about getting those front-end yields stapled to the floor,” Major said in an interview on Bloomberg Television’s “The Pulse” with Maryam Nemazee.

German 10-year yields slipped three basis points to 1.50 percent.

Australia’s dollar declined against 15 of its 16 major peers, weakening 0.9 percent versus the U.S. currency, after the nation’s Treasury said the central bank would be able to ease monetary policy if the currency’s gains are hurting the economy.

The S&P GSCI gauge of 24 commodities was little changed after a three-day rally, with lead, cocoa and wheat leading gains and gasoline, Brent crude and heating oil falling the most.

Oil for September delivery rose 41 cents, or 0.4 percent, to $96.01 a barrel on the New York Mercantile Exchange, the highest settlement since May 11, amid rising tension in the Middle East. The price is up 9 percent in August and 13 percent in the third quarter.

Platinum for October delivery jumped as much as 2.8 percent to $1,475.30 an ounce, the highest since July 6, after 34 people were killed at Lonmin Plc’s Marikana platinum mine in South Africa, according to the country’s police commissioner.

The MSCI Emerging Markets Index fell 0.4 percent, capping its first weekly drop in five weeks. South Korea’s Kospi Index lost 0.6 percent, with shares in South Africa, Poland and Taiwan declining. The Hang Seng China Enterprises Index of mainland companies added 0.9 percent, and Turkey’s benchmark gauge climbed 1.3 percent. India’s Sensex rose 0.2 percent, while Russia Micex Index slipped 0.5 percent.

Have a wonderful evening everyone.

Regards,

Ellora Howie

Assistant to Carolann Steinhoff

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8X 3Y7