October 17, 2011 Newsletter
Dear Friends,
Tangents:
Milestones: October 17th, 1989 – San Francisco earthquatke.
October 17th, 1970 – Laporte’s Body Found near Montreal. The Globe & Mail reminds us today that this was the day that Quebec cabinet minister Pierre Laporte’s body was found in the trunk of a Chevy belonging to the FLQ cell leader, Paul Rose, in an airport parking lot southeast of Montreal. I was a kid growing up in Montreal when this happened and I remember vividly when Pierre Trudeau triggered the War Measures Act. There were military personnel in uniform patrolling the streets of the city – thousands of soldiers in the streets and the arrest of 497 citizens.
“Outrage turned the province’s independence movement firmly onto a peaceful, democratic path.” -Les Perreaux.
Interesting 60 Minutes show last night on Van Gogh’s possible (probable?) demise – murdered by a bullying youth, not suicide. It is the culmination of the research of two authors with a new book on the subject.
New Van Gogh biography: Painter did not commit suicide, was shot
-by Igor I. Solar.
|
|
Vincent Van Gogh would have died from an accidental shooting by a teenager in the countryside of the French town of Auvers-sur-Oise, according to a new biography of the artist, calling into question the theory of his suicide.
After studying thousands of documents and books related to the painter, Steven Naifeh and Gregory White Smith, authors of “Van Gogh, the Life”, a new biography of the Dutch post-Impressionist artist concluded that, contrary to what has been believed, Van Gogh did not commit suicide, but he was accidentally hit by a bullet shot by a youngster he met at the time he was at a wheat field where he used to paint. The biographers presume that the shooter was known to the painter.
According to the book, René Secrétan, a 16-year-old vacationer, a fan of Wild West adventures, was dressed as a cowboy when he hit the artist in the chest by accident with a .380 calibre weapon.
According to the biography, after being hurt, the artist staggered back to the Ravoux Inn where he was staying. When someone there asked him if he had tried to kill himself, the artist vaguely replied, “I guess so”. He died 30 hours later after pronouncing his last words:
“The sadness will last forever.”
The authors believe that the artist made that statement in order to protect René Secrétan and his brother Gaston, who was also present at the time of the shooting.
According to the authors of the biography, the suicide theory does not fit with the view that the painter had about “causing one’s own death”; he had referred to suicide as “immoral and indecent” and “an act of cowardice”. Additionally, the direction of the bullet in his chest was oblique and it is supposed that if he had shot himself the direction of the bullet would have been straight into his heart. Furthermore, the weapon was never found. Also missing where the easel, paint and brushes he supposedly had brought with him to the countryside on that day, July 27, 1890.
Naifeh and White Smith claim in their book that the Dutch painter, who died at age 37 after several years of frequent bouts of mental illness including anxiety, increasing frustration and severe fits of depression and hallucinations, shortly before his death was extremely sad, lonely and psychologically tormented, thus he may have received and consider death a relief to his endless despair.
However, experts at the Van Gogh Museum remain unconvinced. Leo Jansen, curator at the Museum and editor of the artist’s letters, calls the biography a “great book,” but has doubts about the authors’ theory of the Dutch master’s death.
“We cannot yet agree with their conclusions because we do not think there is enough evidence yet,” said Jansen.
Ethnic Dong minority women wear traditional costumes and accessories during a Kam Grand Choir gathering in Tongguan village, Guizhou province, China. Villagers wear their traditional costumes for choir practice whenever they are free from farming duties. Practice usually occurs twice a week during the day and almost every evening. Sheng Li/Reuters.
Market Commentary:
Canada
By Matt Walcoff
Oct. 17 (Bloomberg) — Canadian stocks retreated after their biggest weekly surge in two years as optimism faded for a quick fix to Europe’s debt crisis and Sun Life Financial Inc. reported it had a net loss in the third quarter.
Sun Life, Canada’s third-largest insurer, dropped 9 percent. Teck Resources Ltd., the country’s biggest base-metals and coal producer, declined 3.8 percent as copper slipped from a two-week high. Suncor Energy Inc., Canada’s largest oil and gas producer, decreased 3 percent as the fuels declined.
The Standard & Poor’s/TSX Composite Index lost 158.69 points, or 1.3 percent, to 11,923.04 after Group of 20 finance ministers and central banks set an Oct. 23 deadline for delivery of a plan to avoid a Greek default, bolster banks and curb contagion.
“When Europe puts on a deadline date, it makes people extremely nervous and very jumpy,” Irwin Michael, a money manager at ABC Funds in Toronto, said in a telephone interview.
Michael’s firm oversees C$1 billion ($983 million). “Europe is quite important, and you don’t want 17 nations going in 17 different directions.”
The S&P/TSX rallied 4.3 percent last week, the most in two years, as energy and raw-materials stocks climbed on speculation the European Union, G-20 and International Monetary Fund were making progress toward a plan to prevent sovereign-debt issues from weakening the continent’s banks.
European leaders won’t have a complete fix for the debt crisis at their Oct. 23 summit in Brussels, Steffen Seibert, German Chancellor Angela Merkel’s chief spokesman, said in a briefing in Berlin today.
The Federal Reserve Bank of New York said its regional manufacturing index fell more last month than economists in a Bloomberg survey had forecast.
Sun Life said it had a C$621 million loss in the third quarter due in part to declines in equities and low interest rates. The insurer was expected to have adjusted net income of C$260.6 million, or 38 cents a share, in the third quarter, according to Bloomberg estimates.
Sun Life slumped 9 percent, the most since August 2009, to C$24.07. Manulife Financial Corp., North America’s fourth- largest insurer, decreased 4.6 percent to C$12.34.
Precious-metals companies fell as the U.S. Dollar Index rebounded from a four-week low. Barrick Gold Corp., the world’s largest gold producer, slipped 1 percent to C$48.28. Agnico- Eagle Mines Ltd., Canada’s fifth-biggest company in the industry by market value, dropped 2.3 percent to C$58.48.
Lake Shore Gold Corp., which mines in Canada, sank 10 percent to C$1.47 after Wendell Zerb, an analyst at Canaccord Financial Inc., cut his 12-month price estimate on the shares to C$2 from C$2.35.
PMI Gold Corp., which is developing a mine in Africa, soared 17 percent to C$1.21 after Nana Sangmuah, an analyst at Clarus Securities Inc., gave the company a “buy” rating in new coverage. The shares jumped 78 percent Oct. 14 after the company reported a tripling of reserves.
Silver Quest Resources Ltd., which explores for precious metals in Canada, surged 28 percent, the most since September 2009, to C$1.11 after New Gold Inc. agreed to buy it in a deal the companies valued at at least C$156 million.
Base-metals and coal producers in the S&P/TSX fell after jumping 20 percent in the previous two weeks.
Teck dropped 3.8 percent to C$35.29. First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, decreased 6 percent to C$16.07. Grande Cache Coal Corp., which mines in Alberta, tumbled 11 percent to C$4.69.
The S&P/TSX Energy Index retreated with oil and gas futures after gaining the most since May 2009 last week. Suncor lost 3 percent to C$29.76. Canadian Natural Resources Ltd., the country’s second-biggest energy company by market value, decreased 2.2 percent to C$32.20. Western Canadian oil producer PetroBakken Energy Ltd. plunged 5.4 percent to C$8.01 after soaring 23 percent last week.
Trican Well Service Ltd., Canada’s largest oilfield- services company, slumped 7 percent to C$17.80 after Andrew Bradford, an analyst at Raymond James Financial Inc., cut his rating on the stock to “outperform” from “strong buy.” The European debt crisis may keep oil prices from rising next year, Bradford wrote in a note to clients.
BlackBerry maker Research In Motion Ltd. sank 5.6 percent to C$22.90 after rival Apple Inc. sold more than 4 million iPhone 4S devices in their first three days on sale.
Finning International Inc., the world’s largest Caterpillar dealer, rallied 6.4 percent to C$21.33 after Cherilyn Radbourne, an analyst at Toronto-Dominion Bank, raised her rating on the company to “buy” from “hold.” The company’s difficulties obtaining parts for its Canadian operations should be resolved by year end, Radbourne wrote in a note to clients.
Prime Restaurants Inc., the franchiser of the East Side Mario’s and Casey’s chains in Canada, surged a record 39 percent to C$6.74 after agreeing to be bought by Cara Operations Ltd. for C$7 a share.
US
By Rita Nazareth
Oct. 17 (Bloomberg) — U.S. stocks declined, after the biggest weekly gain in the Standard & Poor’s 500 Index since 2009, as financial shares slumped and the German government damped optimism of a quick fix to Europe’s debt crisis. Banks in the S&P 500 tumbled 6.3 percent as a group.
Citigroup Inc. and Wells Fargo & Co. slipped at least 1.6 percent as revenue dropped amid economic weakness and market turmoil linked to Europe. Alcoa Inc. and Caterpillar Inc. retreated more than 3 percent to pace losses among companies most-tied to the economy. Gannett Co. sank 8.7 percent after profit fell as newspaper advertising declined.
The S&P 500 decreased 1.9 percent to 1,200.86 at 4 p.m. New York time. The benchmark gauge for American equities rallied 6 percent last week. The Dow Jones Industrial Average retreated 247.49 points, or 2.1 percent, to 11,397 today.
“European leaders want to strike the right tone that they will fix things, but not create too much expectations,” Dan Veru, chief investment officer at Fort Lee, New Jersey-based Palisade Capital Management LLC, which manages $3.4 billion, said in a telephone interview. “If we don’t have a healthy financial system, it’s going to be difficult for there to be a sustainable economic recovery. In addition, the market is selling off because we got near the top of the trading range.”
The S&P 500 rose last week amid optimism over corporate earnings and steps by European leaders to support the region’s banks. It surged 11 percent from Oct. 3, its lowest close in more than a year, through Oct. 14. The rebound brought the gauge close to the top of a price range between 1,074.77 and 1,230.71, where it’s traded for more than two months.
Germany said European Union leaders won’t provide the complete fix to the euro-area debt crisis that global policy makers are pushing for at an Oct. 23 summit. Group of 20 finance ministers and central bankers concluded weekend talks in Paris endorsing parts of an emerging plan to avoid a Greek default, bolster banks and curb contagion.
“There’s not going to be a quick fix to the problems in Europe,” Brian Jacobsen, chief portfolio strategist at San Francisco-based Wells Fargo Funds Management, which oversees $215 billion, said in a telephone interview. “This economic recovery will be uneven in terms of geography and the sectors that are really benefiting from the slow growth.”
U.S. equity futures fell before the open of regular trading as data showed that manufacturing in the New York region contracted in October at a faster pace than forecast. Separate figures showed that industrial production in the U.S. advanced in September.
The Morgan Stanley Cyclical Index of companies most-tied to the economy lost 3.1 percent. The Dow Jones Transportation Average, a proxy for the economy, retreated 2.8 percent. Alcoa, the largest U.S. aluminum producer, slumped 6.6 percent to $9.58. The shares had the biggest decline in the Dow. Caterpillar retreated 3.1 percent to $81.52.
The KBW Bank Index decreased 3.9 percent as 23 of its 24 stocks fell. The index jumped 6.9 percent last week.
Wells Fargo dropped 8.4 percent to $24.42. Investors shrugged off the record profit posted by Wells Fargo today and focused on a 6 percent decline in revenue to $19.6 billion. That missed the $20.2 billion estimate of analysts as low interest rates cut into profit on loans. Chief Executive Officer John Stumpf is focusing on costs as the 9.1 percent U.S. jobless rate and slow economy keep borrowers on the sidelines.
“The economic recovery has been more sluggish and uneven than anyone anticipated,” Stumpf said in a statement. “We can’t change the economic environment, yet we have worked hard to control the variables we can.”
Citigroup retreated 1.7 percent to $27.93, even as its quarterly profit beat analysts’ estimates, helped by an accounting gain and a reduction in losses tied to soured loans. Excluding the accounting adjustment, revenue fell 8 percent.
Gannett slumped 8.7 percent to $9.99. The owner of 82 newspapers and 23 television stations reported third-quarter profit decreased 1.6 percent as publishing revenue, including advertising and circulation, declined 5.3 percent.
American Airlines parent AMR Corp. dropped 6.1 percent to $2.76, after falling as much as 11 percent today, triggering a brief halt in trading. American Airlines said it recessed negotiations with its pilots union today after making “significant progress” toward a contract that would end more than five years of talks.
Halliburton Co., the world’s second-largest oilfield services provider, fell 7.9 percent to $34.48 on concern about oil-price volatility and the slower-than-expected growth in its international business.
El Paso Corp. surged 25 percent, the most since 2002, to $24.45, as Kinder Morgan Inc. agreed to buy the company for $21.1 billion. The cash and stock offer is valued at $26.87 per El Paso share, or 37 percent more than the Oct. 14 closing price, Houston-based Kinder Morgan said in a statement yesterday.
Utility, telephone and consumer staples providers, which are least-tied to the economy, outperformed the S&P 500 today.
Stock market bulls and bears agree on at least one thing. The highest valuations for makers of household goods since 2008 signal the best is over after the industry rose more than any other group this year.
Bears say the easy money has been made in so-called defensive shares should the world slip into a recession. Bulls favor companies with faster earnings growth and cheaper valuations. The last time household-goods producers were this expensive versus the MSCI World, stocks were about to begin an advance in which bank, mining and industrial stocks jumped more than 137 percent, while consumer staples rose 76 percent.
“You’ve got too much money that has been bet that we’re going into a recession,” said Jeffrey Saut, who helps oversee $300 billion as chief investment strategist at Raymond James & Associates in St. Petersburg, Florida. “If we don’t go into a recession, you’ll get a whole rotation out of these highly valued defensive stocks into more aggressive stocks.”
Barton Biggs, who bought stocks when the market bottomed in March 2009, boosted bullish bets on equities in his Traxis Global Equity Macro Fund on improving U.S. economic data. The fund’s net long position rose to 65 percent from 40 percent about a month ago, according to Biggs, the founder of Traxis Partners LP, in an interview with Betty Liu on Bloomberg Television’s “In the Loop” program. Biggs said on Sept. 22 that bullish bets at all Traxis funds had fallen to 20 percent.
“I’m inclined to stay where I am, which is moderately, cowardly bullish,” Biggs said. “The thing that makes me want to hang in there is that the high frequency economic news from the U.S. has definitely improved. It’s gotten pretty good.”
Have a wonderful evening everyone.
Be magnificent!
Facts are not frightening.
But if you try to avoid them, turn your back and run, then that is frightening.
-Krishnamurti, 1895-1986
As ever,
Carolann
What saves a man is to take a step. Then another
step. It is always the same step, but you have
to take it.
-Antoine de Saint-Exupéry, 1900-1944