January 3, 2013 Newsletter

Dear Friends,

Tangents:

We are enjoying a beautiful winter day today, with just a light dusting of frost this morning!  One of my favourite winter poems by Robert Frost came to mind today.

Stopping By Woods On A Snowy Evening

Whose woods these are I think I know.

His house is in the villiage though;

He will not see me stopping here

To watch his woods fill up with snow.

My little horse must think it queer

To stop without a farmhouse near

Between the woods and frozen lake

The darkest evening of the year.

He gives his harness bells a shake

To ask if there is some mistake.

The only other sound’s the sweep

Of easy wind and downy flake.

The woods are lovely, dark, and deep.

But I have promises to keep,

And miles to go before I sleep,

And miles to go before I sleep.

By Robert Frost

“Judge each day not by the harvest you reap but by the seeds you plant” – Robert Louis Stevenson

On this day in…

1815 – By secret treaty, Austria, Britain, and France formed a defensive alliance against Prusso-Russian plans to solve the Saxon and Polish problems.

1825 – The first engineering college in the U.S. , Rensselaer School, opened in Troy, NY. It is now known as Rensselaer Polytechnic Institute.

1833 – Britain seized control of the Falkland Islands in the South Atlantic. About 150 years later, Argentina seized the islands from the British, but Britain took them back after a 74-day war.

1888 – The drinking straw was patented by Marvin C. Stone.

1925 – In Italy, Mussolini announced that he would take dictatorial powers.

1938 – The first broadcast of “Woman in White” was presented on the NBC Red network. The program remained on radio for 10 years.

1959 – In the U.S., Alaska became the 49th state.

“To accomplish great things, we must not only act, but also dream; not only plan, but also believe” – Anatole France

Photos of the day January 3rd, 2013

A young snowy owl looks into the camera at the zoo in Krefeld, Germany. The species is native to northern Eurasia and North America.

Roland Weihrauch/dpa/AP

A woman gestures as others run into the English Bay during the annual New Year’s Day Polar Bear Swim in Vancouver, British Columbia, Canada.

Ben Nelms/Reuters

Robin and Rob Whitten and their dog, Bella, walk along the Eastern Promenade overlooking Casco Bay in Portland, Maine. The overnight low temperature dropped to 0 degrees Fahrenheit. The combination of cold air and warmer water created the arctic sea smoke rising from the ocean in the background.

Robert F. Bukaty/AP

“Anyone who has never made a mistake has never tried anything new”  – Albert Einstein

Market Closes for January 3rd, 2013:

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

Jan. 3 (Bloomberg) — Canadian stocks fell from a nine- month high, led by declines among gold mining companies, after Federal Reserve policy makers said they will probably end their $85 billion monthly bond purchases in 2013.

Barrick Gold Corp. and Goldcorp Inc., the world’s two largest gold producers, slumped at least 2.9 percent as the price of the metal fell. Silvercorp Metals Inc. declined 6.8 percent as silver fell for the first time in three days.

Reitmans Canada Ltd. dropped 4.2 percent after the clothing retailer reported falling sales during December.

The Standard & Poor’s/TSX Composite Index fell 70.33 points, or 0.6 percent, to 1,2470.44 in Toronto. The benchmark gauge has risen 1.3 percent this week as U.S. lawmakers reached a budget deal averting automatic spending cuts and tax increases.

“We’re all concerned about the amount of money they’re printing,” said Keith Richards, fund manager with ValueTrend Wealth Management in Barrie, Ontario, referring to the Fed’s stimulus programs since the 2008 financial crisis. The firm manages about C$100 million ($101.4 million). “It’s not a bad thing if they stop it when they should, but if they stop it before they should, that is a bad thing.”

Four years after cutting the main interest rate to near zero, policy makers are expanding their third round of so-called quantitative easing to boost economic growth and cut the jobless rate, now at 7.7 percent. In prior rounds of bond purchases, the central bank bought $2.3 trillion in securities.

“A few members expressed the view that ongoing asset purchases would likely be warranted until about the end of 2013” while a few others specified no time frame, according to the record of the Federal Open Market Committee’s Dec. 11-12 gathering released today in Washington.

Gold mining stocks contributed the most to losses in the S&P/TSX as seven of 10 industries retreated. Trading volume was 8.7 percent lower than the 30-day average.

All 31 members of the S&P/TSX Gold subindex declined as the industry gauge fell the most, 4 percent, since November 2012.

Rubicon Minerals Corp., which explores for gold in the Red Lake gold camp in northwestern Ontario, plunged 8.4 percent to C$2.41 to pace losses in the S&P/TSX. Goldcorp lost 4.7 percent to C$35.22 and Barrick declined 2.9 percent to C$34.08.

Gold for February delivery lost 1.4 percent to $1,665.50 an ounce in electronic trading in New York.

Silvercorp fell 6.8 percent to C$4.83 and Silver Wheaton Corp. dropped 3.1 percent to C$35.24. Silver for March delivery slipped 1.8 percent to $30.455 an ounce in electronic trading.

Reitmans slumped 4.2 percent to C$11.98. The Montreal-based fashion retailer said sales for the five weeks ended Dec. 29 dropped 5.4 percent. Same-store sales fell 3.4 percent.

Africa Oil Corp., which is exploring for oil and gas in Kenya, Ethiopia and Somalia, declined 4.8 percent to C$6.99 after Christopher Brown, director of research in international oil and gas with Canaccord Genuity Corp., downgraded the stock’s rating to hold from speculative buy. He also reduced his price target to C$8 a share from C$13.50.

The stock is at risk due to several near-term potentially negative events relating to well results, flow tests, elections in Kenya and possible changes to existing contracts, Brown said in a note to clients today.

’’A previously high-risk, high-reward story has devolved into a high-risk, medium-reward opportunity,’’ he said.

US

By Michael P. Regan and Inyoung Hwang

Jan. 3 (Bloomberg) — Treasuries slid, sending 10-year yields to the highest since May, and U.S. stocks retreated after Federal Reserve policy makers said they will probably end their bond-purchase program this year. The dollar extended gains after the Fed minutes and commodities declined.

Ten-year Treasury note yields increased seven basis points to 1.90 percent at 4:10 p.m. in New York. The Standard & Poor’s 500 Index slipped 0.2 percent to 1,459.37 after earlier climbing within one point of its highest closing level in five years. The index surged 2.5 percent yesterday, the most in a year, after lawmakers reached an agreement on tax rates. The U.S. currency rose versus 13 of 16 major peers and the Dollar Index jumped to the highest since November, while industrial metals led commodities lower. Gold lost 1.4 percent in extended trading.

Fed policy makers said they will probably end their $85 billion monthly bond purchases sometime in 2013 with members divided between a mid- or end-of- year finish, signaling a divide among central bankers on how long the quantitative easing should last. Earlier gains in stocks came after a private report showed better-than-forecast growth in employment and retailers posted improving sales.

“There’s a pretty active debate” at the Fed, Christopher Orndorff, who helps oversee $450 billion as senior money manager at Western Asset Management Co. in Pasadena, California, said in a telephone interview. “They’re airing the disagreements on the board and preparing the markets for what will eventually happen. But the Fed has been pretty clear unemployment has to come down lower and the economy has to grow faster before QE ends.”

Four years after cutting the main interest rate to near zero, policy makers are expanding their third round of so-called QE to boost economic growth and cut the jobless rate. In prior rounds of bond purchases, the central bank bought $2.3 trillion in securities.

The yield on the benchmark 10-year Treasury security rose the most since October yesterday as lawmakers approved a budget averting income-tax increases for more than 99 percent of households, breaking an impasse about how to head off the so- called fiscal cliff. Lawmakers must next tackle the U.S. debt ceiling, which reached its $16.4 trillion limit on Dec. 31.

Among U.S. stocks, UnitedHealth Group Inc. lost 4.7 percent to lead declines in the Dow Jones Industrial Average after Deutsche Bank AG removed its buy rating on the stock. Mellanox Technologies Ltd. sank 17 percent after the Israeli developer of data-management technology reduced its revenue guidance on weaker demand.

TJX Cos. rose 3.3 percent and Ross Stores Inc. climbed 8 percent, while Target Corp. and Nordstrom Inc. also helped lead gain in retailers after reporting December sales. General Motors Co. and Ford Motor Co. rallied more than 1.9 percent after reporting December results that topped analysts’ estimates.

A report today from ADP Research Institute indicated the labor market finished 2012 with momentum, with a 215,000 increase in jobs that was the largest since February and more than economists estimated. The data fueled optimism before tomorrow’s government payrolls report as investor focus returned to economic prospects after the budget agreement was sealed.

Separate government data showed applications for jobless benefits increased by 10,000 to 372,000 last week.

The Labor Department releases non-farm payrolls for December tomorrow. Economists predict an addition of 153,000 workers last month after a 146,000 gain in November. The unemployment rate held at 7.7 percent, the lowest since December 2008, according to economists’ estimates.

BlackRock Inc.’s Laurence D. Fink, who heads the world’s largest asset manager, lowered his expectations for stocks in the first quarter after saying yesterday he’s disappointed by the bill U.S. lawmakers passed and thinks it doesn’t address the deficit strongly enough. The package won’t cut deficits enough to avoid a sovereign-rating downgrade, Moody’s Investors Service said.

Have a great evening everyone!!!

Be Magnificent!

“When you are content to be simply yourself and don’t compare or compete, everyone will respect you.” ― Lao Tzu, Tao Te Ching

Karen Parnham

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