June 9th, 2011 Newsletter
Dear Friends, I read this article with amusement in The Financial Times on the weekend:
In praise of feuds
Literary giants produce beauty, truth and good old fights
It took 15 years and the expectoration of much bilious invective, but Paul Theroux and V. S. Naipaul are friends again. With a little encouragement from Ian McEwan, their fellow author, the two distinguished men of letters have buried the hatchet and, rumour has it, may even resume their old habit of lunching together. So ends a celebrated literary feud – though more than one reader will feel a pang of sorrow at its passing.
From Fyodor Dostoyevsky’s quarrels with Ivan Turgenev to Ernest Hemingway’s falling out with Gertrude Stein, the history of literature is replete with venomous disputes that make the feud between the Montagues and Capulets look like an Italian playground squabble. Gabriel Garcia Marquez and Mario Vargas Llosa, the twin titans of Latin American literature, came to blows in a Mexican cinema in the 1970s and did not speak for 30 years.
After Gore Vidal likened the late Norman Mailer to Charles Manson, the serial killer, Mailer – who had a mean right uppercut as well as a talent for writing – threw a hefty punch at Mr. Vidal. Dazed and flat on the floor, Mr. Vidal responded with a typical verbal jab: “As usual, words fail Norman Mailer.”
Some authors generously admit to standing on the shoulders of giants, but not Mr. Vidal, who upon hearing of Truman Capote’s death observed that it was “a good career move.”
Novelists, playwrights and poets are not inherently more bitchy than actors, composers, television presenters or pop stars. But their feuds are more fascinating, because their genius lies in harnessing the power of words to produce beauty and truth. When genius descends into petty but exquisitely phrased abuse, the rest of us look on with horrified admiration.
Even so, V.S. Naipaul, now 78 years old, surely went too far this week when he dismissed the fictional work of Diana Athill, his 93-year-old publisher, as “feminine tosh”. Can’t he pick on someone his own age?
photos of the day
June 9, 2011
Master of Hounds, (l.), looks at his neighbor, Viscount Nelson, at Belmont Park in Elmont, N.Y. Master of Hounds, trained in Ireland, is entered in Saturday’s Belmont Stakes.
Mark Lennihan/AP
Pilgrims make their way to the shrine of El Rocio during the annual pilgrimage in which hundreds of thousands of devotees of the Virgin del Rocio converge in and around the shrine in Villamanrique, Spain.
Miguel Angel Morenatti/AP
Market Commentary:
Canada
By Matt Walcoff
June 9 (Bloomberg) — Canadian stocks rose, ending the longest Standard & Poor’s/TSX Composite Index losing streak since 2006, as fertilizer producers gained after the U.S. cut crop-supply forecasts and precious-metals companies advanced on speculation the European debt crisis will worsen.
Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, increased 3.4 percent as corn futures climbed. Kinross Gold Corp., Canada’s third-biggest producer of the metal, gained 3.3 percent as the euro retreated against 13 of 16 other major currencies. Sino-Forest Corp., the forestry company that has plunged 72 percent since a short seller said it manipulated financial data, rallied 4.7 percent.
The Standard & Poor’s/TSX Composite Index rose 71.95 points, or 0.6 percent, to 13,255.74 after closing at the lowest level relative to earnings since September yesterday.
The decline in valuations is attracting investors back into the stock market, said John Kinsey, a money manager at Caldwell Investment Management Ltd. in Toronto, which oversees about C$1 billion ($1 billion). “We’re getting bottom-fishers or people that are bargain-hunting,” he said.
The index’s seven-day streak of declines was the longest since 2006. The index fell 4.7 percent from May 30 to yesterday as U.S. statistics on employment and manufacturing trailed economists’ forecasts and U.S. Federal Reserve Chairman Ben S.
Bernanke called his country’s economic recovery “frustratingly slow.”
Potash Corp. advanced for the first time in five days, rallying 3.4 percent to C$53.98, as the U.S. Agriculture Department today cut its year-end estimates for corn and wheat stocks more than most analysts had forecast. Agrium Inc., Canada’s second-largest fertilizer producer, increased 2.6 percent to C$82.49.
European Central Bank President Jean-Claude Trichet said today “strong vigilance” is necessary to restrain inflation, signaling the bank will raise interest rates next month.
The euro declined after Trichet’s statement, indicating traders believe the most-indebted Western European countries will be unable to handle higher interest rates, Peter Boockvar, a strategist at Miller Tabak & Co. in New York, said in an e- mail to clients. Precious-metals producers gained.
Kinross rose 3.3 percent to C$15.25. Eldorado Gold Corp., which mines in China and Turkey, advanced for the first time in nine days, increasing 2.1 percent to C$14.09. First Majestic Silver Corp., which operates in Mexico, climbed 5.6 percent to C$18.21 as silver climbed 2.2 percent.
The S&P/TSX Financials Index gained after closing yesterday at an 11-month low relative to earnings. Royal Bank of Canada, the country’s largest lender by assets, rose 0.9 percent to C$54.86. Bank of Nova Scotia, the No. 3 Canadian lender, advanced 0.9 percent to C$58.24.
Sino-Forest rose 4.7 percent to C$5.15. The shares have fallen from C$18.21 on June 1, the day before Muddy Waters Research said the company lied about its finances. The company, which operates in China, yesterday asked Canadian regulators to investigate Muddy Waters.
Muddy Waters’ founder, Carson Block, said the company’s disclosures of land holdings don’t match Chinese city records and that its production may be overstated. Sino-Forest has denied the assertions and published documents on its website that it says back up its financial statements.
Construction-products maker Armtec Infrastructure Inc. sank 59 percent to a record low of C$4.35 after suspending its dividend. In a press release, the company cited “unprecedented weather conditions across the country and margin compression.”
Uranium One Inc. fell for a record ninth-straight day, dropping 6.2 percent to C$2.90. Japan may evacuate more towns affected by radiation from the Fukushima Dai-Ichi nuclear plant, the Wall Street Journal reported.
US
By Rita Nazareth
June 9 (Bloomberg) — U.S. stocks advanced, snapping a six- day decline, as the trade deficit unexpectedly narrowed amid record exports and consumer confidence improved.
The Morgan Stanley Cyclical Index of companies most-tied to economic growth rose 1 percent. Mosaic Co. and CF Industries Holdings Inc. paced gains among fertilizer producers, climbing at least 4.2 percent, after the government reduced its corn-crop estimate. American International Group Inc. advanced 2.9 percent as Deutsche Bank AG recommended buying the shares. Brown-Forman Corp. added 2 percent after the maker of Jack Daniel’s whiskey reported earnings that beat analysts’ estimates.
The Standard & Poor’s 500 Index gained 0.7 percent to 1,289 at 4 p.m. in New York. The benchmark gauge yesterday fell to 12.1 times its companies’ forecast operating earnings, the cheapest valuation since August, according to data compiled by Bloomberg. The Dow Jones Industrial Average increased 75.42 points, or 0.6 percent, to 12,124.36 today.
“The stock market got oversold,” said James Dunigan, chief investment officer in Philadelphia for PNC Wealth Management, which oversees $110 billion. “We’ve got some positive news against the string of poor economic data of the last few weeks. Earnings are still pretty strong. There’s value out there if you want to build a long-term position.”
The S&P 500 yesterday completed its longest slump since February 2009 on concern the economy is slowing. A report last week showed that payrolls grew at the slowest pace in eight months. The benchmark equity index doubled from its March 2009 low to 1,363.61 on April 29, its highest level since June 5, 2008, as earnings topped estimates for nine straight quarters.
Stocks rose today as a report showed that the U.S. trade deficit unexpectedly narrowed in April, reflecting a plunge in auto and oil imports combined with record exports. The gap shrank 6.7 percent to $43.7 billion, the lowest since December, Commerce Department figures showed. Exports increased 1.3 percent to $175.6 billion, boosted by sales of fuel oil, petroleum products and computers.
A separate report showed that consumer confidence rose last week for the third consecutive time as lower gasoline prices lifted Americans’ outlook on their finances. The Bloomberg Consumer Comfort Index climbed to minus 45.9 in the period to June 5, the best showing since the end of April, from the prior week’s minus 47.1. Across income groups, sentiment improved the most among those making less than $50,000 a year.
Benchmark indexes advanced even as initial jobless claims unexpectedly rose by 1,000 to 427,000 last week, the Labor Department said. Economists surveyed by Bloomberg News projected a drop to 419,000, according to the median forecast.
Today’s rally in stocks also happened after the S&P 500 yesterday got close to its average price of the last 200 days, a level monitored by analysts and traders who study charts to make forecasts. The index yesterday closed at 1,279.56, about 2 percent above its 200-day moving average.
“That’s a very significant level,” said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research in Cincinnati. “That’s where we expect some buyers to step in to defend the longer-term trend.”
A gauge of raw material shares led the gains in the S&P 500 within 10 industries, rallying 1.6 percent.
Fertilizer stocks rose as the government said that the U.S. corn harvest may be 2.3 percent smaller than forecast in May as farmers reduced acreage because of excessive Midwest rains.
Mosaic, North America’s second-largest fertilizer producer, gained 4.8 percent to $68.84. CF Industries increased 4.2 percent to $154.86. Makers of agriculture machinery also climbed. Agco Corp. rose 2.5 percent to $48.24. Deere & Co. jumped 2.6 percent to $82.
AIG advanced 2.9 percent to $28.10. Deutsche Bank recommended buying the shares of the insurer, saying that earnings consistency should drive the stock higher.
The insurer may buy mortgage-backed securities from European banks seeking to bolster their balance sheets as the company works to boost investment results, Deutsche Bank wrote in a note to investors. AIG Chief Executive Officer Robert Benmosche is hunting for assets to add to the investment portfolio after the Federal Reserve Bank of New York rejected his $15.7 billion offer to buy back a pool of mortgage bonds turned over as part of the company’s bailout.
Brown-Forman rose 2 percent to $71.75. The maker of Jack Daniel’s whiskey and Finlandia vodka reported fourth-quarter earnings of $1.13 a share. On average, the analysts surveyed by Bloomberg estimated profit of 64 cents.
Banks had the biggest gain in the S&P 500 within 24 industries, rising 1.9 percent as a group. The KBW Bank Index of 24 stocks advanced 1.2 percent. Wells Fargo & Co. rallied 3.4 percent to $26.22. JPMorgan Chase & Co. rose the most in the Dow, adding 1.5 percent to $40.98.
Goldman Sachs Group Inc. rose 1.5 percent to $133.53 after agreeing to pay a $10 million fine and stop holding private meetings of stock analysts and traders known as “huddles” to settle an investigation by Massachusetts’s chief securities regulator.
The settlement ends a two-year probe by William Galvin, the secretary of the commonwealth, into New York-based Goldman Sachs’s “Asymmetric Service Initiative,” in which information on analysts’ trading ideas was disseminated earlier to favored clients. The company will “permanently discontinue” the practice, Galvin’s office said in a statement today.
Macy’s Inc. gained 1.1 percent to $28.13. The second- biggest U.S. department-store chain was raised to “overweight” from “equal weight” at Barclays. The share-price estimate is $35.
The Dow dropped for five straight weeks through June 3, with one disappointing economic report after another. That’s the longest streak of declines for the Dow since 2004. Still, the grim news is doing little to reduce bullishness among U.S. money managers and market strategists such as JPMorgan Chase & Co.’s David Kelly and Liz Ann Sonders of Charles Schwab Corp., who say profit growth and below-average valuations will lift equities this year.
“The economy is still growing, albeit at a slow pace, and sufficient for corporate revenues, corporate earnings and corporate cash flow to advance,” said Bob Doll, who helps oversee $3.65 trillion at New York-based BlackRock Inc., the world’s biggest money manager. “We’re at the end of the recovery and the beginning of the expansion. That’s typically a time when stocks still go up, just at a lesser pace.”
Have a wonderful day.
Be magnificent!
I hold that true education of the intellect can only come through a proper exercise
and training of the bodily organs, e.g., hands, feet, eyes, ears, nose, etc.
In other words an intelligent use of the bodily organs in a child provides
the best and quickest way of developing his intellect.
But unless the development of the mind and body goes hand in hand
with a corresponding awakening of the soul,
the former alone would prove to be a poor lopsided affair.
By spiritual training I mean education of the heart.
Mahatma Gandhi, 1869-1948
As ever,
Carolann
Cherish your own emotions and never
undervalue them.
-Robert Henri, 1865-1929