December 14, 2012 Newsletter

Dear Friends,

Tangents:

Interesting article in the Wall Street Journal this week:

-by Robert Lee Holtz

Researchers on Wednesday said they found the earliest known chemical evidence of cheese-making, based on the analysis of milk-fat residues in pottery dating back about 7,200 years. The discovery suggests Europe’s early farmers added a cheese course to their diet almost as soon as they learned to domesticate cattle and started regularly milking cows.

Mélanie Salque/University of Bristol

A fragment of a sieve that researchers say were used as cheese strainers.

Mélanie Salque/University of Bristol

Another sieve fragment

Scientists led by geochemist Richard Evershed at the U.K.’s University of Bristol tested ancient, perforated clay pots excavated at sites along the Vistula River in Poland, and found they had likely been used by prehistoric cheese mongers as strainers to separate curds and whey—a critical step in making cheese.

The pots have long puzzled archeologists, but their new analysis, reported in Nature, revealed unique carbon isotopes of milk in the traces of fatty acids that had soaked into the ceramic sieves.

“It is a no-brainer,” said Dr. Evershed. “They have to be cheese strainers.”

No one knows exactly when or where cheese-making began, but experts said the traces of milk fat on these unglazed clay strainers are the clearest evidence yet of the origins of this basic biotechnology, which launched a dairy trade that today produces more than 11 billion pounds of cheese every year and as many as 5,000 different named varieties world-wide, from Appenzeller to Zamorano.

Cheese historians suspect that the first cheese was most likely a soft, watery concoction, resembling a contemporary cottage cheese or a fromage frais, that was naturally curdled by the bacteria commonly found on a cow’s teats.

Shards of the distinctive urns, which resemble pottery cheese strainers still in use today, are found often at sites settled by the Neolithic-era tribes who first brought the innovations of agriculture and animal husbandry to central Europe. They almost always turn up in association with large numbers of cattle bones.

In prehistoric times, when almost every adult was lactose-intolerant, the invention of cheese-making offered herders a way to turn fresh whole cow’s milk into a food that they could consume without getting ill, experts said. Cheese contains far less lactose than milk. Moreover, cheese, which normally takes up a tenth of the volume of the milk from which it is made, is easier to store, transport and preserve.

“Making cheese is a particularly efficient way to exploit the nutritional benefits of milk, without becoming ill because of the lactose,” said archeologist Peter Bogucki, an associate dean at Princeton University, who was part of the international research team.

In fact, evolutionary biologists at University College London have suggested that a genetic mutation to better tolerate lactose first originated in central Europe about the time this prehistoric cheese-making began. The inherited ability to digest cow’s milk more easily is widespread today among people of European ancestry.

For decades, archeologists have debated how the vessels pocked with holes were used. Some scholars theorized that the pots were used to brew beer. Others speculated that primeval chefs used them to separate meat from stock or honey from honeycomb. The containers also may have been fire pots to hold glowing embers safely.

“Scholars have been duking it out for decades as to what these sieves were used for,” said University of Vermont cheese chemist Paul Kindstedt, author of “Cheese and Culture: A History of Cheese and Its Place in Western Civilization.” He wasn’t involved in the research. “This new finding is really definitive —beyond a reasonable doubt—that this utensil was used for cheese making.”

On this day in…

1799 – George Washington died at age 67.

1819 – Alabama became the 22nd state in the United States.

1911 – Norwegian explorer Roald Amundsen became the first man to reach the South Pole, beating an expedition led by Robert F. Scott.

1939 – The Soviet Union was dropped from the League of Nations.

1967 – DNA synthesized for the first time.

1981 – Israel formally annexed the Golan Heights.

 
Feel the fear and do it anyway. – Susan Jeffers.

photos of the day

December 14, 2012

The 78.74-foot-tall Christmas tree is lit in St. Peter’s square at the Vatican.

Gregorio Borgia/AP

Winner Lara Gut of Switzerland (l.) and Nadja Kamer of Switzerland, who came in third, celebrate with champagne on the podium after a women’s Alpine Ski World Cup downhill race in Val d’Isere, France.

Jean-Christophe Bott/Keystone/AP

Market Closes for December 14th, 2012:

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam and Whitney Kisling

Dec. 14 (Bloomberg) — Canadian stocks climbed, extending their gain for the week, as optimism about the global economy fueled by American and Chinese manufacturing reports offset a slump in factory sales and concern about U.S. budget talks.

Dundee Corp. surged 14 percent after the company said it will give shareholders a 50 percent stake in Dundee Real Estate Investment Trust, its 70 percent-owned real-estate unit. China Gold International Resources Corp. declined 5.8 percent as the precious metal dropped for a third straight week. Encana Corp. slipped 4.3 percent a day after PetroChina Co. agreed to pay C$1.18 billion ($1.2 billion) for a 49.9 percent stake in an Alberta shale formation.

The Standard & Poor’s/TSX Composite Index rose 7.55 points, or 0.1 percent, to 12,296.72. The equity gauge gained 1.1 percent for the week and is up 2.9 percent this year.

“You’ve got some positive impulses and some negative impulses, so we’re stabilizing and we’ll see more stabilization later,” Robert “Hap” Sneddon, president of Castlemoore Inc. in Oakville, Ontario, said in a phone interview. “We had a little bit of a positive with Harper allowing two sovereign deals to go through in the oils.”

Industrial production in the U.S. rose in November by the most in two years. In China, the December preliminary reading was 50.9 for a purchasing managers’ index released by HSBC Holdings Plc and Markit Economics, beating estimates.

Canadian factory sales fell faster than economists forecast in October on declines in aircraft and automobiles, while inventories reached the highest in almost four years.

President Barack Obama and Republican House Speaker John Boehner remained deadlocked yesterday during their third White House meeting on next year’s budget. Canadian Finance Minister Jim Flaherty said today that Canada would enter a recession if U.S. policy makers are unable to reach an agreement to avoid fiscal tightening scheduled for January.

“There is good reason for concern in the next quarter or so if that issue is not resolved satisfactorily,” Flaherty told reporters today in Ottawa.

Encana fell 4.3 percent to $19.96, after jumping 2 percent yesterday. PetroChina’s deal marks the first between Canada and a state-owned company since Canadian Prime Minister Stephen Harper unveiled new foreign investment rules on Dec. 7.

The rules, announced after the approval of Cnooc Ltd.’s purchase of Nexen Inc., prohibit state-owned enterprises from taking control of Canadian oil-sands businesses unless there are “exceptional circumstances.” Joint ventures and minority stake acquisitions aren’t barred under the rules.

China Gold fell 5.8 percent to C$3.41. Gold futures for February delivery rose 20 cents to settle at $1,697 an ounce in New York. The metal was down 0.5 percent this week.

Dundee rallied 14 percent to C$30.47 after its board approved a tax-efficient plan to give shareholders a 50 percent stake in Dundee Realty Corp.

Inmet Mining Corp., the target of a proposed takeover offer from First Quantum Minerals Ltd., climbed 4.7 percent to C$69.83 after the miner boosted the copper resource estimate at its Cobre Panama project by 27 percent.

US

By Lu Wang

Dec. 14 (Bloomberg) — U.S. stocks had their first weekly decline in a month as budget talks dragged on, overshadowing the Federal Reserve’s plan to expand bond purchases and better-than- estimated economic data.

Consumer companies fell the most among 10 groups in the Standard & Poor’s 500 Index as analysts cut ratings for Family Dollar Stores Inc. and Priceline.com Inc. Apple Inc. sank 4.4 percent after UBS AG and Jefferies & Co. lowered their share- price estimates. Berkshire Hathaway Inc. and DuPont Co. each climbed 2.1 percent amid optimism over share buybacks. An index of steelmakers rallied 7 percent as economic data beat forecasts in China, the world’s biggest buyer of industrial metals.

The S&P 500 fell 0.3 percent to 1,413.58, snapping a three- week gain. The Dow Jones Industrial Average declined 20.12 points, or 0.2 percent, to 13,135.01 for the week.

“The market would love for a fiscal cliff deal to be announced, then it would trend back to really the fundamentals, which are actually looking better,” David Chalupnik, head of equities at Nuveen Asset Management in Minneapolis, said in a phone interview. His firm manages $112 billion. “Time is running out here pretty quickly for certainly a grand bargain type of deal.”

President Barack Obama and Republican House Speaker John Boehner remained deadlocked during their third White House meeting on next year’s budget. More than $600 billion in tax increases and spending cuts are scheduled to start taking effect in January unless Congress acts to avert them.

Government reports showed retail sales and industrial production rebounded in November while jobless claims declined to a nine-week low. The Fed said it will buy $45 billion a month of Treasury securities starting in January to help boost growth, in addition to $40 billion a month of mortgage-debt purchases under a previous plan. Asset buying will continue until the labor market improve “substantially,” the central bank said.

Three rounds of bond purchases from the Fed have helped the S&P 500 more than double from a 12-year low in 2009. While the benchmark gauge is up 12 percent this year, it’s fallen 1.9 percent this quarter, worse than any other developed market among 24 tracked by Bloomberg.

“The fiscal cliff is creating value in equities as there is too much negativity priced in,” said Scott Minerd, chief investment officer of Guggenheim Partners LLC, who oversees more than $125 billion from Santa Monica, California. “I’m of the mindset that the fiscal cliff is a non-event.”

Consumer-discretionary shares in the S&P 500 fell 1.2 percent for the week, the most among 10 industry groups.

Family Dollar slumped 7.2 percent to $65.86 as JPMorgan Chase & Co. reduced its rating for the discount retailer to neutral, an equivalent of hold, from overweight, citing increased competition. Dollar General Corp., the largest U.S. dollar-store chain, said it will match rivals’ price cuts to retain customers that analysts anticipate will spend more cautiously next year. Dollar General lost 6.4 percent to $43.83.

Priceline.com declined 6.9 percent to $613.54. The online travel agency was cut to hold from buy at Deutsche Bank AG on concern competition in the industry may heat up next year.

Apple tumbled 4.4 percent to $509.79. Steven Milunovich, an analyst at UBS, cut his price estimate to $700 from $780, citing concern that growth may slow for the iPhone and iPad. Based on checks with Apple’s suppliers, Milunovich said that the company is starting to curb production of the iPhone. Peter Misek at Jefferies trimmed his forecast to $800 from $900.

Berkshire climbed 2.1 percent to $89.15. The company said it will pay as much as 120 percent of book value, a measure of assets minus liabilities, for stock buybacks, signaling Chief Executive Officer Warren Buffett views the shares as undervalued. The previous limit was 110 percent.

DuPont advanced 2.1 percent to $44.09. The biggest U.S. chemical maker by market value said 2012 earnings will reach the upper end of the company’s forecast and it will spend as much as $1 billion to repurchase shares.

An S&P 500 index of steelmakers rallied 7 percent for the biggest weekly gain since September as data from China showed factory output and retail sales beat economists’ estimates while manufacturing may expand at a faster pace.

U.S. Steel Corp., the country’s largest producer of the metal by volume, jumped 9.6 percent to $23.85. Cliffs Natural Resources Inc., the largest U.S. iron-ore producer, surged 15 percent to $33.96.

TripAdvisor Inc. advanced 8 percent to $41.67. Liberty Interactive Corp. bought about $300 million in shares of the online travel-review company, gaining voting control from billionaire Barry Diller, who stepped down as its chairman.

Have a wonderful weekend everyone.

Be magnificent!

Do not destroy.  Iconoclastic reformers do no good to the world.

Help if you can; if you cannot, fold your hands, stand by, and see things go on.

Therefore say not a word against any man’s convictions, so far as they are sincere.

Secondly, take man where he stands, and from thence give him a lift.

Swami Vivekananda, 1863-1902

As ever,

Carolann

Everything comes gradually and at

its appointed hour.

-Ovid, 43 BC- 17/18 AD

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