June 14, 2012 Newsletter

Dear Friends,

Tangents:

Looking for a place to take a nice day trip this summer? Well, look no further but the beautiful island of Salt Spring; just a short 35 minute ferry ride through the Georgia Straight. Salt Spring Island is an alluring place for visitors with a mild climate, stunning natural beauty and a colourful cast of characters, such as artists, and musicians.  Coastal Living Magazine named the island the top “small arts town in Canada” and one of the top ten such arts colonies in North America.  Not only is Salt Spring known for the talent it holds, but for the passionate farmers and the abundance of local seafood.  Culinary artists are also drawn to the island because of the fresh, locally grown fruits and vegetables.  Salt Spring is a very food and wine-centric island, boasting a serious legion of world-renowned farmers, vintners, cheese-makers, bakers and chefs.   If you happen to be on Salt Spring Island on a Saturday (just announced, there will now be one on Wednesdays), make sure to check out the Farmers Market located Oceanside at Centennial Park in the heart of Ganges.  What makes this market different from others, all vendors must “make it, bake it or, grow it”.  You will find arts & crafts (jewelry & pottery), woodworkers, organic foods and live music. A little fact to leave you with: Salt Spring Island has its own legal, local currency. Each denomination consists of a world renowned Salt Spring artist’s work. It can be used at par with the Canadian dollar on Salt Spring Island and is also a great collector item and/or gift.

photos of the day June 13, 2012

As they await their loved ones who just returned home from deployment, families prance and wave in anticipation in a hangar at the edge of Gray Army Airfield near Tacoma, Wash. The C-17 at rear was the plane they flew in on.

President Barack Obama waves from Air Force One upon his departure from Washington. Obama will travel to Ohio and New York for campaign events.

Market Closes for June 13, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Nick Baker

June 14 (Bloomberg) — Canadian stocks resumed losses as a rally fueled by Reuters reporting that central banks are prepared to coordinate actions if needed to boost liquidity in financial markets sputtered.

The Standard & Poor’s/TSX Composite Index declined 60.38 points, or 0.5 percent, to 11,437.49 at 3:27 p.m. Toronto time after slumping 0.6 percent earlier. Following the Reuters report, the index had briefly erased its slump.

Canada faces a “major shock” and global financial conditions could deteriorate significantly if Europe’s crisis worsens, the country’s central bank said. While Canada’s financial system has fared well and conditions in the country remain “very stimulative,” deepening European turmoil may boost funding costs for the nation’s banks and generate losses from assets linked to the euro zone, the Bank of Canada said today in its semi-annual Financial System Review.

US

By Michael P. Regan and Inyoung Hwang

June 14 (Bloomberg) — U.S. stocks rose and the dollar weakened as reports on American inflation and jobless claims fueled speculation the Federal Reserve may loosen monetary policy to spur growth. Treasuries fell and commodities gained.

The Standard & Poor’s 500 Index added 0.7 percent at 3:29 p.m. in New York while the dollar weakened against all 16 major peers, with the euro increasing 0.4 percent to $1.2602. Ten-year Treasury yields climbed three basis points to 1.63 percent, while the rate on Spain’s 10-year bond rose as high as 6.998 percent, a euro-era record, after its credit ratings were cut by Moody’s Investors Service. The S&P GSCI commodities index added 1.2 percent.

Speculation grew that the Fed will discuss stimulus efforts at its meeting next week after reports showed jobless claims unexpectedly climbed by 6,000 to 386,000 and the cost of living fell by the most in more than three years. Investors also awaited Greek elections this weekend, with the nation’s benchmark stock index surging 10 percent on speculation the party that backs terms of a bailout may win elections.

“Economic deceleration puts the Federal Reserve in the driver’s seat,” Chad Morganlander, a Florham Park, New Jersey- based money manager at Stifel Nicolaus & Co., which oversees about $115 billion of assets, said in a telephone interview.

“There’s an improvement within the euro. There’s a modest amount of optimism that the Greek vote will bode well for the markets.”

U.S. stocks briefly pared gains as Egan-Jones Ratings Co. reduced its rating on France’s government debt, fueling concern about contagion from the debt crisis. The rally resumed after Reuters reported that central banks are prepared to coordinate actions if needed to boost liquidity in financial markets. The news service cited officials linked to the Group of 20 nations.

Home Depot Inc., Walt Disney Co. and Cisco Systems Inc. rose at least 2 percent to lead gains in the Dow Jones Industrial Average, which rallied as much as 132 points. All 10 of the main industry groups in the S&P 500 advanced. Kroger Co. rallied 4.9 percent after the largest U.S. grocery-store chain boosted its annual profit forecast and announced a $1 billion share buyback.

International Game Technology, a maker of casino machines, jumped 12 percent for the biggest gain in the S&P 500 after authorizing a share-repurchase plan of as much as $1 billion.

The S&P 500 fell yesterday following a decrease in U.S. retail sales and higher borrowing costs at elections in Italy and Germany. The index tumbled as much as 9.9 percent from a four-year high in April through June 1 amid lower-than-forecast economic data and concern Europe’s debt crisis was spreading.

The index has rebounded almost 4 percent since after the retreat dragged its valuation to 12.9 times reported earnings, the cheapest since November.

Treasuries extended losses after the U.S. sold $13 billion of 30-year bonds at a record low yield. The long bonds yielded 2.720 percent, compared with a forecast of 2.725 percent in a Bloomberg News survey of eight of the Fed’s 21 primary dealers.

The bid-to-cover ratio, which gauges demand by comparing total bids with the amount of securities offered, was 2.40, versus an average of 2.66 at the past 10 sales. Rates on existing 30-year bonds increased two basis points to 2.73 percent.

Italian 10-year yields lost nine basis points to 6.13 percent, halting a six-day increase. Italy sold 4.5 billion euros ($5.6 billion) of debt, with the yield on its benchmark three-year bond rising to 5.3 percent from 3.91 percent at the last auction on May 14.

European shares pared losses triggered by Moody’s Investors Service lowering Spain’s credit rating three steps to Baa3 yesterday. Investors also awaited weekend elections in Greece to gauge prospects of the the nation remaining in the euro bloc.

The Stoxx Europe 600 Index slipped 0.3 percent, recovering most of an early 1.2 percent slide. Credit Suisse slumped 10 percent to its lowest price since 1992. British Sky Broadcasting Group Plc and BT Group Plc tumbled more than 3 percent after winning the rights to show live English Premier League soccer matches by paying an extra 70 percent. Nokia Oyj plunged 18 percent after reducing its outlook for the second quarter.

The rally in Greek stocks pared the Athens Stock Exchange Index’s decline to 19 percent. Greeks will vote for a second time in six weeks after a May 6 ballot failed to result in a government. New Democracy, the largest pro-bailout party, led Syriza, the group opposed to spending cuts, according to the last poll on June 1. Under Greek law, there is a ban on publication of opinion polls two weeks before an election.

Chancellor Angela Merkel rejected quick solutions proposed to fix Europe’s financial crisis such as joint debt sharing, saying Germany can’t save the world economy alone and fellow Group of 20 countries must help. She said the debt crisis and Germany’s role in stemming contagion will be a “central topic” at next week’s G-20 summit.

“Europe is sliding further into a recession and the global and U.S. economies are still slowing down,” said Shane Oliver, the Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “It’s still time for caution on the short-term view.”

Spain’s two-year note yield surged eight basis points to 4.99 percent and the cost of insuring against a Spanish default using credit-default swaps climbed two basis points to 602, compared with an all-time high of 613.5 reached on June 1. A report showed borrowings by the nation’s banks from the European Central Bank rose to a record 287.8 billion euros in May from 263.5 billion euros in April.

The MSCI Emerging Markets Index slid 0.5 percent after closing yesterday at its highest level since May 29. The Hang Seng China Enterprises Index and the Philippine Stock Exchange Index lost at least 1.5 percent. India’s Sensex Index fell 1.2 percent after inflation quickened more than economists estimated.

Have a wonderful evening everyone.

“Yesterday is history, tomorrow is a mystery, today is a gift of God, which is why we call it the present.”

? Bil Keane

Regards,

Amanda Bourke

Assistant to Carolann Steinhoff

Queensbury Securities Inc.