The Mess That Greenspan Made - Part 19

Friday Morning Links

Portugal seeks to calm bank fears – BBC
Portuguese bank says it’s healthy, markets recover – AP
Carl Icahn says ‘time to be cautious’ on U.S. stocks – Reuters
Germany’s Choice: Will It Be America or Russia? – Spiegel
Fed’s Fischer sees little benefit in breaking up too-big banks – Reuters
Fossil industry is the subprime danger of this cycle – Telegraph
Berkeley’s latest entitlement program is free medical marijuana – Vox
Is Religion ‘Old-Fashioned’ and ‘Out of Date’? – Atlantic
Average Stock Market Returns Aren’t Average – Marginal Revolution
Employers say they can’t fill jobs—and here’s why – CNBC
Obamacare Is Working. Unless You’re Black. – Bloomberg
Uninsured rate plummets under Obamacare – CNN/Money
Watch Obamacare Implode – Krugman, NY Times

Stock futures up, but indexes on track for worst week in months – Reuters
Stocks will end 2014 even higher, experts say – CNN/Money
Signs Of The Apocalypse – Sigmund Holmes
Why Cyclically-Smoothed Earnings Make Sense – Comstock Funds
Treasuries Set for Biggest Weekly Gain Since March on EU Stress – Bloomberg
Gold steadies near 3-1/2-month high, set for 6th weekly gain – Reuters
Gold stock rally ‘foreshadows a trend’ for the metal – MarketWatch
Gold ETFs Ride Thursday’s Portugal Bank Woes Higher – Barron’s
Gold smuggling into India hits record highs –
No Indian gold import policy change explains RBI gold swap – Gold Chat
India’s gold imports plummet 34% YOY – Mineweb

US wholesalers slow restocking as sales weaken – AP
America’s economy: Waiting for inflation – Economist
U.S. Has Reason to Be Fed Up With China’s Economic Policy – Time
Japan economics minister warns of premature QE exit – Reuters
China’s yuan ‘a growing force in global finance’ – AFP
Market eventually will ‘decide rate’ of yuan exchange – China Daily
London Seeks New Spenders as Russians Skip $719 Champagne – Bloomberg
Piggy Banks Being Raided Signal Swedish Housing Dilemma – Bloomberg
The Costs of Obama’s Housing Mistakes Keep Piling Up – Fiscal Times
Watching for signs of US housing market activity – Sober Look
Janet Yellen Chimes in on the Bubble Question – Acting Man
Is the Fed Behind the Curve? – Money and Banking


Back In a Few…

We’re off to Glacier National Park for the next few days – whatever this is, I hope we see it.

The latest issue of the Iacono Research Weekend Update has been posted to the website and is now available for subscribers here. There will be no changes to the model portfolio or the buy ratings this week, but developments from last week as they relate to financial markets are reviewed in the following discussion topic:

The executive summary is as follows:

A surprisingly strong labor report and other positive economic data in the U.S. combined with very dovish comments from multiple Federal Reserve officials, including Fed Chief Janet Yellen, to send U.S. equity markets to record highs. Treasuries fell and the U.S. dollar rebounded as investors around the world were emboldened to bid prices higher amid ongoing violence in the Middle East that has now spread to Israel.

Though most related shares moved higher, commodity prices had their worst week in the last five as prices for both energy products and agricultural goods tumbled. Metals were the notable exception in the natural resource sector and mining stocks saw more gains, adding to their impressive 2014 performance after a dismal 2013. For the week, the model portfolio rose 0.8 percent and is now up 9.2 percent for the year.

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On the Declaration of Independence

A few thoughts on the Declaration of Independence on this Fourth of July after having read much about the Revolutionary War period in recent years.

In addition to Thomas Jefferson, Benjamin Franklin, and John Adams, two other members were on the Committee of Five tasked to draft the document – Roger Sherman and Robert Livingston. It is not know what, if any, contributions Sherman and Livingston made to the document as the group met infrequently from June 10th to July 5th and kept no minutes.

Though there is some debate on this subject, Thomas Jefferson wrote the first draft of the Declaration of Independence, but only because John Adams asked him to. The other four members of the committee wanted Adams to write it. At the time, authoring the document was seen as being a relatively menial task and high profile members of the Continental Congress such as Adams much preferred oration before their peers to a writing assignment such as this. As it turned out, writing the Declaration of Independence was, by far, the most important development in Thomas Jefferson’s political career.

Jefferson borrowed liberally from others, notably the Virginia Declaration of Rights that was adopted by the Virginia Convention in June and opens with the following:

That all men are by nature equally free and independent and have certain inherent rights, of which, when they enter into a state of society, they cannot, by any compact, deprive or divest their posterity; namely, the enjoyment of life and liberty, with the means of acquiring and possessing property, and pursuing and obtaining happiness and safety.

This is surprisingly similar to the Declaration of Independence:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

The most famous edit came from Benjamin Franklin who suggested changing “sacred and undeniable” to “self-evident” in the passage directly above.

Lastly, that John Adams and Thomas Jefferson both died on July 4th, 1826 – exactly 50 years after the Declaration of Independence was adopted – is pretty amazing. The two had been ill for some time and, as a testament to how important the date July 4th had become and the power of mind over the body, both held on until that day, expiring as others celebrated.

© 2010-2011 The Mess That Greenspan Made