November 24, 2014 Newsletter

Dear Friends,

Tangents:

Tracking down the origin of the phrase “Black Friday” uncovers any number of explanations, but one likely source that seems to have emerged, a good run-down of which can be found here, is that the term originated in the Philadelphia police department. The day after Thanksgiving saw a lot of holiday revelers — and a crippling amount of traffic, which gave the cops a tough time. So the term, at least in this telling, was originally one of derision. –Paul Vigna, WSJ.

On the weekend, I read the obituary of Fred Branfman in a recent edition of The Economist and found it inspirational.  Fred Branfman was the exposer of America’s secret war in Laos.  He died on September 24^th this year, aged 72.  The following was taken from that obituary in The Economist:

“The peasant refugees, camped outside Vientiane in Laos, did not want to speak to him when he first approached them, in 1969,  they were wary of the big, earnest, bespectacled young American.  And they were wretched.  They had left behind their paddy fields, pigs and buffalo, their fresh air and forests, and pined for them.  Many were injured, too: blinded, or missing limbs, or riddled with metal pellets that showed through their skin.

  Over the months, as Fred Branfman gently urged them, they began to talk of war planes over their home region, the Plain of Jars.  At first, in 1964, they had watched them with interest, much as they watched the rockets at the spring festival of boun bang fai.  Then the planes dived close and aimed at them directly.  They went on doing so, flying up  to 200 sorties a day, for five years.  When Mr. Branfman visited the plain at last in 1993 (pictured), droplets from cluster bombs were still exploding….He had gone to Laos to teach in his 20s, mostly to avoid the draft for Vietnam.  In that war Laos was officially neutral, though it was fought over by right- and left- wing groups and supply routes to the Vietcong ran through it.  The American government denied it was conducting a war there, for conventional warfare was outlawed.  Congress and the public were in the dark.  It seemed that only Mr. Branfman knew.

  As a Jew he was inevitably reminded of the Holocaust, another concealed atrocity.  It was ‘as if I had discovered Auschwitz when it was still going on.’  His fury was never hard to ignite; like many of his contemporaries, he had burned to changer the word since high school.  He had been brought up to believe America was good, and triumphed in just wars.  Now everything was upended.  America had betrayed him: it was not merely socially unjust, especially towards blacks, but also brutal and criminal abroad.

  He had to get the story out.  It was easier than he thought, for the villagers could read and write as well as draw, with chilling accuracy, T-28s and F-105s strafing their hills.  Their anonymous memories and sketches became  ‘Voices from the Plain of Jars’ published in 1972. By then, President Nixon had admitted that America was at war in Laos; but not that it was targeting civilians.  That was still denied outright by America’s former ambassador to Laos, in front of a Senate committee to which Mr. Branfman, too, gave evidence….In the 21^st century his list of executive outrages grew long again, this time provoked by the war on terror: surveillance of Americans by government agencies, the growth of biometric databases, expanded powers of detention, pervasive secrecy.  In newspaper columns he appealed to Americans to resist the growth of a police state.

  He warned them, too, that the world was changing for the worse.  In Laos he had heard repeatedly how huge machines had dealt out death from afar.  The use of drones in Iraq and Afghanistan was merely a refinement of this remote, arrogant way of killing.  In Laos he had heard of peaceful, ancient ways of life, in tune with nature, obliterated by human greed and barbarity; now global warming, again spurred by greed, was threatening mankind as a whole.  As before, he hoped that if he shouted loudly enough, people would hear.  Some did, but once again America’s leaders proved stone deaf.

The problem with the human race, he concluded, was that it blocked out pain.  Uncomfortable facts, inconvenient truths, other people’s suffering, were all denied as long as possible.  And nothing was denied as vigorously as death, though he knew from a brush with it when he was 48 – that to face it squarely was also to draw from it life-affirming strength.  This was the blo9wn-open secret of his last years, spent in Budapest beside the Danube.  But he had heard it first, like so much else, in Laos.  A 14year-old boy told him how he had sung in the rice fields, even as the planes passed over.  ‘I felt that although I might have to die, it did not matter; that I just had to be happy in the midst of all the sadness of war, of the airplanes dropping bombs.’”

PHOTOS OF THE DAY

President Barack Obama presents the Presidential Medal of Freedom to actress Meryl Streep during a White House ceremony in Washington. The Presidential Medal of Freedom is the Nation’s highest civilian honor, presented to individuals who have made especially meritorious contributions to the security or national interests of the United States, to world peace, or to cultural or other significant public or private endeavors.Kevin Lamarque/Reuters

A woman playing the role of Bridget Fuller makes pancakes in a home at Plimoth Plantation in Plymouth, Mass. Plimouth Plantation is a living museum portraying the life of the Native Americans and the English colonists in 1627, seven years after the colonists’ arrival. Brian Snyder/Reuters

Market Closes for November 24^th, 2014    

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     Nov. 24 (Bloomberg) — Canadian stocks fell the most in three weeks, halting a six-day rally, as commodities producers retreated amid investors speculation on whether OPEC will slash production at a Nov. 27 meeting.

     Potash Corp. of Saskatchewan Inc. sank 5.6 percent, the most in more than a year, as OAO Uralkali negotiates with Russian regulators to resume work in a portion of a flooded mine. Alacer Gold Corp. and Detour Gold Corp. retreated at least 3.9 percent as gold futures fell. Hudson’s Bay Co. jumped 8 percent to an all-time high as the retailer plans to take out a $1.25 billion mortgage on the ground portion of its Saks Fifth Avenue property in New York.

     The Standard & Poor’s/TSX Composite Index lost 95.72 points, or 0.6 percent, to 15,015.41 at 4 p.m. in Toronto. The benchmark Canadian equity gauge had rallied 2.3 percent in the previous six days to a September high. The index is up 10 percent this year, seventh among the world’s developed markets.

     Six of the 10 industries in the index fell on trading 4.7 percent below the 30-day average. Energy and materials producers dropped at least 1.8 percent to pace declines.

     Alacer Gold fell 4.3 percent to C$2.21 to and Detour Gold retreated 3.9 percent to C$9.47 as raw-materials companies fell 1.9 percent as a group. Gold slipped 0.2 percent in New York.

     Lightstream Resources Ltd. declined 4.1 percent to C$3.74 and Bellatrix Exploration Ltd. fell 3.1 percent to C$5.61. Brent and West Texas Intermediate crude retreated for the first time in three days.

     Iran may propose that the Organization of Petroleum Exporting Countries cut its output target by as much as 1 million barrels a day when the country’s oil minister consults with his Saudi counterpart, Iran’s state-run Mehr News reported. Saudi Arabia’s Oil Minister Ali Al-Naimi said today it’s not the first time the oil market has been over-supplied.

US

By Joseph Ciolli

     Nov. 24 (Bloomberg) — U.S. stocks rose, extending all-time highs for benchmark indexes, as small-cap shares rallied amid growing confidence in the global economy.

     Best Buy Co. jumped 2.3 percent before the start of the holiday shopping season. Urban Outfitters Inc. advanced 5.4 percent, the most in the Standard & Poor’s 500 Index. Verizon Communications Inc. tumbled 1.4 percent after Citigroup Inc. lowered its rating on the stock. AT&T Inc. slid 1.6 percent.

     The Standard & Poor’s 500 Index rose 0.3 percent to a record 2,069.41 at 4 p.m. in New York. The Russell 2000 Index of smaller companies surged 1.2 percent to the highest level since July. The Dow Jones Industrial Average added 7.84 points, or less than 0.1 percent, to 17,817.9, weighed down by Verizon and AT&T. About 5.6 billion listed shares changed hands in the U.S., about 15 percent lower than the three-month daily average.

     “We’re seeing a carryover from last week’s comments made by Draghi trying to address the inflation in Europe, and the actions from the Chinese central bank to lower lending rates,” Robert Pavlik, who helps oversee $4.5 billion as chief market strategist at Banyan Partners LLC in New York, said in a phone interview. “You’ve gotten some good economic news and earnings reports. The market has more upside potential.”

     The S&P 500 advanced 1.2 percent last week as data signaled the U.S. economy is improving, European Central Bank President Mario Draghi pledged to raise inflation as fast as possible and China unexpectedly cut interest rates.

     The benchmark gauge has rebounded 11 percent from a six- month low last month. The S&P 500 had plunged as much as 7.4 percent as concern grew Europe was leading a global growth slowdown. Stocks gained today after a report showed German business confidence unexpectedly advanced this month.

     In Germany, the Ifo institute’s business climate index rose to 104.7 in November from 103.2 in October. Economists had predicted a decline in the gauge that is based on a survey of 7,000 executives.

     Preliminary data from Markit Economics showed the U.S. services industries expanded at a slower pace this month. Reports tomorrow may show the world’s largest economy grew at a slower rate in the third quarter than first estimated, while consumer confidence probably climbed in November to a seven-year high.

     “The U.S. economy is very solid, and we’re also starting to see signs that the worst is behind us for Europe,” said Allan von Mehren, chief analyst at Danske Bank A/S in Copenhagen. “Investors are starting to position for a global recovery in the first half of next year.”

     The rally in American equities has pushed stock valuations to the highest since the end of 2009. The S&P 500 trades at 17.2 times the projected earnings of its members, up from a multiple of 15.5 last month. Profit for S&P 500 companies may rise 7.6 percent this year, estimates compiled by Bloomberg show.

     The S&P 500 closed above its five-day moving average for 27 consecutive trading sessions. That’s the longest such streak in history, according to Jonathan Krinsky, chief market technician at MKM Holdings LLC.

     The index closed 4.2 percent above its 50-day moving average last week, the widest spread in a year, according to data compiled by Bloomberg.

     The Russell 2000 Index has recovered all of its losses this month. The index dropped as much as 2.4 percent through Nov. 19. It has now climbed 13 percent from a one-year low reached in October.

     The Chicago Board Options Exchange Volatility Index, the gauge of options prices known as the VIX, fell 2.2 percent to 12.62. The gauge climbed to a more than two-year high on Oct. 15.                       

     Best Buy, the world’s biggest electronics chain, jumped 2.3 percent before Black Friday on Nov. 28 kicks off the year’s busiest shopping season. Gap Inc. rallied 4.6 percent.

     Consumer discretionary companies rose the most out of any group in the S&P 500, led by Urban Outfitters, which increased 5.4 percent. Coach Inc. climbed 2.6 percent. The National Retail Federation predicts retail sales will rise 4.1 percent this holiday season, more than the 2.9 percent average of the past 10 years.

     Tetraphase Pharmaceuticals Inc. rallied 11 percent as people familiar with the matter said the biotechnology company is exploring a sale.

     Platinum Underwriters Holdings Ltd. climbed 21 percent after the reinsurer said RenaissanceRe Holdings Ltd. will buy it for about $76 per share.

     Phone companies dropped 1.4 percent, the most among the 10 S&P 500 groups.

     Verizon slid 1.4 percent as Citigroup analyst Michael Rollins cut his rating on the company to neutral from buy. He cited expectations of below-consensus earnings per share in 2015 stemming from higher costs of capacity, as well as slower revenue growth due to increased rate-plan competition.

     AT&T and Frontier Communications Corp. also fell at least 1.6 percent.

     Potash shares declined as Russian company Uralkali, the world’s biggest producer of the resource, said it’s preparing to restart operations at half of a mine that was recently closed after an accident. Mosaic Co. slid 3.7 percent, while Potash Corp. of Saskatchewan Inc. declined 6.1 percent in U.S. trading.
 

Have a wonderful evening everyone.

Be magnificent!

The saffron of virtue and contentment

Is dissolved in the water gun of love and affection.

Pink and red clouds of emotion are flying about,

Limitless colors raining down.

All the covers of the earthen vessel of my body are wide open;

I have thrown away all shame before the world.

Mira’s Lord is the Mountain Holder, the suave lover.

I sacrifice myself in devotion to His lotus feet.

Mira Bai

As ever,

Carolann

What is right to be done cannot be done too soon.

                                -Jane Austen, 1775-1817

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7