August 30, 2012 Newsletter

Dear Friends,


Birthday: August 30th, 1797, Mary Shelley, Writer:

Mary Wollstonecraft Godwin Shelley who wrote Frankenstein at age 18, was the love child of two great English thinkers – William Godwin, a political philosopher, and Mary  Wollstonecraft, author of the first feminist treatise, The Vindication of the Rights of Women.  Both decried the confinement of marriage, but married when Wollstonecraft became pregnant.  Eleven days after Mary’s birth, her mother died.  Her father raised her among the intellectual elite and she and her half sister Fanny once hid under a table to listen to Samuel Coleridge recite The Rime of the Ancient Mariner.

At 16, she met Percy Bysshe Shelley.  They declared their love, ran away to France and later married.  Of her five pregnancies between the ages of 17 and 24, only one child survived.  She was widowed, at 24, when Percy drowned while sailing.  Although her husband had been an outspoken advocate of free love, it appears that Mary was devoted exclusively to him.  She never remarried nor formed any lasting liaisons.  For the remainder of her life, she cared for her father and her son, wrote six more novels, and a body of criticism of Percy’s work.  Mary had her husband’s heart removed before his body was cremated on the shores of Italy, and she kept it with her until her death on February 1, 1851, at the age of 54.

“We will each write a ghost story,” said Lord Byron; and his proposition was acceded to.  There were four of us….Have you thought of a story?  I was asked each morning, and each morning I was forced to reply with a mortifying negative…. On the morrow I announced that I had thought of a story….At first I thought but of a few pages – of a short tale; but [Percy Bysshe] Shelley urged me to develop the idea at greater length. –Introduction to Frankenstein, ed 3, 1831.

And also on this day in…

30 BC – Cleopatra VII, Queen of Egypt, commits suicide.

1871 – Ernest Rutherford, physicist who discovered and named alpha, beta, and gamma radiation, and was the first to achieve a man-made nuclear reaction, born.
1963 – Holtine established between U.S. and Soviet Union goes into operation.

1967 – Thurgood Marshall confirmed as U.S. Supreme Court Justice.
1983 – Lieutenant Colonel Guion S. Bluford, Jr., becomes the first African-American astronaut to travel in space.
photos of the day August 30, 2012

The sun sets during the Burning Man 2012 ‘Fertility 2.0’ arts and music festival in the Black Rock Desert of Nevada, Wednesday. More than 60,000 people from all over the world have gathered at the sold-out festival, which is celebrating its 26th year, to spend a week in the remote desert, cut off from much of the outside world to experience art, music, and the unique community that develops.

Jim Urquhart/Reuters

Chinese girls dressed in traditional Qing dynasty costumes play along a corridor of the Rongguofu, known as Dream of Red Mansion, which is a famous classical novel of China, in Zhengding county, northern China’s Hebei province.

Andy Wong/AP

Guest dressed in white and lit by spotlight gather at the Art Science Museum of the Marina Bay Sands in Singapore. Diner en Blanc or ‘White Dinner,’ which started in Paris 24 years ago, made its Asian debut in Singapore. The 888 guests brought their own food, tables and chairs for a fine dining, flash-mob style gathering in a secret location made known to them only minutes before the event.

Wong Maye-E/AP

Market Closes for August 30, 2012:

North American Markets



Close Change


13000.71 -106.77




S&P 500 1399.48 -11.01




NASDAQ 3048.71 -32.47




TSX 11886.65 -123.14




International Markets



Close Change
NIKKEI 8983.78 -86.03






19552.91 -235.60




SENSEX 17541.64 +50.83




FTSE 100 5719.45 -24.08





Bonds % Yield Previous % Yield

10 Year Bond

1.771 1.801

30 Year


2.341 2.369

10 Year Bond

1.6233 1.6506

30 Year Bond

2.7446 2.7646


BOC Close Today Previous
Canadian $ 0.99294 0.98945




1.00712 1.01072
Euro Rate 

1 Euro=




1.24238 0.80491


1.25155 0.79922


Gold Close Previous
London Gold  


1655.85 1656.30
Oil Close Previous 


WTI Crude Future 94.62 95.49
BRENT 114.01 113.88


Market Commentary:


By Eric Lam

Aug. 30 (Bloomberg) — Canadian stocks fell the most in seven weeks as Bank of Nova Scotia led financial shares lower and oil slumped amid increasing concern over global economic growth.

Bank of Nova Scotia, Canada’s third-largest bank, sank 2.4 percent on the Standard & Poor’s/TSX Composite Index after saying it will buy ING Bank of Canada and sell new shares to help finance the deal. Toronto-Dominion Bank slid 1.1 percent after the company’s outlook for the year implied fourth-quarter earnings may miss analysts’ forecasts. Suncor Energy Inc. retreated 0.9 percent as crude declined to a two-week low.

The S&P/TSX dropped 123.14 points, or 1 percent, to 11,886.65 in Toronto for a fourth day of losses. Eight stocks fell for each that rose in the Canadian equity benchmark. The index has declined 0.6 percent this year.

Global equities slumped as data showed economic confidence in the euro area fell more than economists forecast in August as leaders struggled to rein in the sovereign debt crisis. In the U.S., more Americans than forecast filed applications for unemployment benefits last week, a sign that progress in the labor market is faltering. Federal Reserve Chairman Ben S. Bernanke is scheduled to speak tomorrow in Jackson Hole, Wyoming, where he may discuss the economic outlook.

“We’re seeing a lot of volatility in the marketplace,” Irwin Michael, a fund manager at ABC Funds, said in an interview from Toronto. His firm manages about C$850 million. “Everyone is waiting for Bernanke to speak tomorrow and no one wants to do anything until they get the lay of the land.”

Canada’s current account deficit widened to the most in almost two years in the second quarter as exports fell, government figures showed. The deficit — the difference in payments made to foreigners for imported goods, services and investments and receipts received by Canadians — increased to C$16 billion ($16.2 billion) in the second quarter, from C$10.2 billion in the first quarter, Statistics Canada said.

Scotiabank retreated 2.4 percent to C$52.30. The company announced the biggest takeover in its history by agreeing to buy ING Bank of Canada from ING Groep NV for C$3.13 billion in a bid to expand its deposits.

Toronto-Dominion, the second-biggest bank, lost 1.1 percent to C$80.65. The company’s full-year guidance indicates fourth- quarter earnings, excluding certain items, may be about C$1.71 a share, below analysts’ estimates of C$1.84, according to data compiled by Bloomberg.

Royal Bank of Canada gained 0.7 percent to C$54.96 after unexpectedly raising its dividend 5.3 percent to 60 cents a share, its first increase since March. Profits at the bank rose 73 percent to a record C$2.24 billion.

Suncor declined 0.9 percent to C$30.70 and Canadian Natural Resources Ltd. fell 1.6 percent to C$29.87. Crude dropped on speculation oil producers would restore Gulf of Mexico output quickly after Tropical Storm Isaac passed. Oil for October delivery slid 0.9 percent to settle at $94.62 a barrel in New York.

Major Drilling Group International Inc. plunged 14 percent, its biggest loss since January 2009, to C$9.27. The drilling company fell after larger U.S. competitor Boart Longyear Ltd. cut its 2012 forecasts and outlook.


By Rita Nazareth

Aug. 30 (Bloomberg) — U.S. stocks retreated, trimming the third straight monthly advance for the benchmark Standard & Poor’s 500 Index, amid concern about a worsening of Europe’s debt crisis and of a further slowdown of the global economy.

Sears Holdings Corp. slumped 7.9 percent as the retailer will be replaced in the S&P 500 by chemical maker LyondellBasell Industries NV. Ciena Corp., a maker of communications-network equipment, tumbled 20 percent after reporting a wider-than- projected loss and forecasting lower revenue than analysts had estimated. Gap Inc. rose 2.7 percent as sales beat estimates.

The S&P 500 declined 0.8 percent to 1,399.48 at 4 p.m. New York time, trimming its monthly advance to 1.5 percent. The Dow Jones Industrial Average retreated 106.77 points, or 0.8 percent, to 13,000.71 today. Volume for exchange-listed stocks in the U.S. was 4.5 billion shares, near the lowest level since at least 2008 excluding days surrounding holidays.

“The main focus is the softer news overseas,” said Michael Strauss, who helps oversee about $26 billion of assets as the chief investment strategist at Commonfund in Wilton, Connecticut. “There’s more of a reality check of Europe.

Clearly the numbers in the U.S. have gotten a bit better.”

Equities slumped as data showed that economic confidence in the euro area and Japan’s retail sales fell more than economists forecast, while South Korean manufacturers’ confidence stayed near the lowest level since the global financial crisis. Spain will delay deciding whether to seek a sovereign bailout until the aid conditions are clear, Prime Minister Mariano Rajoy said following a meeting with French President Francois Hollande.

In the U.S., more Americans than forecast filed applications for unemployment benefits last week, a sign that progress in the labor market is faltering amid a slowing economy. Consumer spending climbed in July for the first time in three months as the biggest part of the economy struggled to overcome a jobless rate hovering over 8 percent.

Federal Reserve Chairman Ben S. Bernanke is scheduled to speak tomorrow in Jackson Hole, Wyoming, where he may discuss the economic outlook. Policy makers have said they are prepared to provide new stimulus “fairly soon” unless there is evidence of “substantial and sustainable” improvement in the recovery, according to minutes of the Federal Open Market Committee’s July 31-Aug. 1 meeting. Policy makers are set to meet in September.

Sears fell 7.9 percent to $52.90. S&P said the company has too few shares available for trading to be representative of U.S. companies. The retailer has 106.5 million shares outstanding and 36.1 million shares that can be traded, based on data compiled by Bloomberg. It is controlled by hedge-fund manager Edward Lampert. He and his RBS Partners LP hedge fund own a total of 61.7 percent, while Fairholme Capital Management has 15.8 percent, data compiled by Bloomberg show.

Ciena tumbled 20 percent to $13.46. The economy is taking a toll, and Ciena has been slow to book revenue on new products, Chief Executive Officer Gary Smith said. Ciena’s biggest customers are phone carriers such as AT&T Inc.

August same-store sales at Gap, the biggest U.S. specialty- apparel retailer, climbed 9 percent, beating the average projection for a 5.5 percent gain from analysts surveyed by researcher Retail Metrics Inc. The shares added 2.7 percent to $36.11.

Visteon Corp. jumped 8.7 percent to $46.16 after South Korean auto-parts maker Mando Corp. said it may bid for Visteon’s 70 percent stake in Halla Climate Control Corp., Mando’s former affiliate.

Pandora Media Inc. soared 14 percent to $11.52. The Internet radio service reported break-even second-quarter results, excluding some items, beating analysts’ estimates.

The S&P 500 has climbed 11 percent in 2012 as global central banks have taken action to boost economic growth. The gauge may rally to 1,500 this year even as investors contend with rising risks created by modern market structure, said Laszlo Birinyi, president of Birinyi Associates Inc.

Birinyi, founder of the Westport, Connecticut-based research and money-management firm, reiterated the bullish call on shares that he has made since the S&P 500 began its 108 percent rally 3 1/2 years ago. His analysis is based in part on a comparison to past bull markets that started with gains such as the 29 percent advance during March and April 2009.

“If this market continues to track history — and to date nothing has been a better guide — we could see 1,500 before year end,” wrote Birinyi, who advised clients to buy equities before they bottomed in March 2009. “We like the market in part because it is a bull market. The day-to-day commentary is all good and fine for information but the reality is that in a bull market stocks go up.


Have a wonderful evening everyone.

Be magnificent!


When one lives with concepts one never learns.  The concepts become static.

You may change them but the very transformation of one concept to another is still static, is still fixed.

But to have the sensitivity to feel, seeing that life is not a movement of two separate activities,

the external and the inward, to see that it is one, to realize that the inter-relationship is this movement,

is this ebb and flow of sorrow and pleasure and joy and depression, loneliness and escape,

to perceive nonverbally this life as a whole, not fragmented, nor broken up, is to learn.

Krishnamurti, 1895-1986

As ever,



Ever notice that ‘what the hell’ is always

the right decision?

-Marilyn Monroe, 1926- 1962

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

Senior Vice-President &

Senior Investment Advisor