It gives me chills

There are many dates that could have been adopted as America’s Independence Day.  The Continental Congress officially voted to approve a resolution of independence on July 2, 1776 and John Adams even predicted, in a letter to his wife, that the 2nd day of July “will be the most memorable epoch in the history of America. ”  He was wrong.  The Declaration of Independence was  adopted by the Congress 2 days later, and it was officialy read in public for the first time on July 8, while Washington ordered it read in front of the Continental Army on July 9.  There is some dispute as to exactly when it got signed, but it was definitely not signed by all signatories until well after July 4th, and it was eventually signed by some people who were not even in Philadelphia when it was adopted.    November 30th, the date of the signing of the Paris peace treaty ending the American revolution is probably the date on which American independence was actually and officially achieved.

Still, from the outset, July 4th became the day of celebration for American Independence.   It was first celebrated in Philadelphia in 1777 with fireworks, toasts, parades and speeches, thus setting a tradition that we follow to this very day.   The fourth of July has become such an iconic phrase that we often forget that it even refers to  a date on the same calender used by everyone.  Canada’s independence day, July 1, is often referred to by Americans as Canada’s Fourth of July, and if you ask someone if the British have a fourth of July, you are likely to get a laugh and a “Of course not”.

Only two of the original signers of the Declaration of Independence ever managed to go on to become President of the United States, first John Adams from Massachusetts and then Thomas Jefferson of Virginia, and it is interesting that of all of the signers, they were the ones who survived the longest.  The two had had a very interesting history together.  Early on in the revolutionary movement, they had forged a friendship, but following independence and during the forming of the new nation, they found themselves on opposite sides of the  political spectrum, and subsequently became bitter enemies.  After each had served his term as president and began to step away from national politics, the friendship was tentatively renewed, and eventually grew again with many letters passing between them.

By 1826, they were the only two remaining of the men who signed the original Declaration of Independence.   Old and failing, as the 90 year old Adams lay on his death bed in Massachusetts, it is reported that his last words were “Thomas Jefferson survives.”  If this is indeed what he said, he was wrong yet again, for the 83 year old Jefferson had died 5 hours earlier down in Virginia, on the same day.

The day was July 4, 1826, the fiftieth anniversary of American Independence.

The Original

Picture of the Declaration of Independence

Bye Bye, Great Britain

In CONGRESS, July 4 1776

The unanimous Declaration of the thirteen united States of America.

When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

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.–That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, –That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.–Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.

He has refused his Assent to Laws, the most wholesome and necessary for the public good.

He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them.

He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature, a right inestimable to them and formidable to tyrants only.

He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their public Records, for the sole purpose of fatiguing them into compliance with his measures.

He has dissolved Representative Houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.

He has refused for a long time, after such dissolutions, to cause others to be elected; whereby the Legislative powers, incapable of Annihilation, have returned to the People at large for their exercise; the State remaining in the mean time exposed to all the dangers of invasion from without, and convulsions within.

He has endeavoured to prevent the population of these States; for that purpose obstructing the Laws for Naturalization of Foreigners; refusing to pass others to encourage their migrations hither, and raising the conditions of new Appropriations of Lands.

He has obstructed the Administration of Justice, by refusing his Assent to Laws for establishing Judiciary powers.

He has made Judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries.

He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance.

He has kept among us, in times of peace, Standing Armies without the Consent of our legislatures.

He has affected to render the Military independent of and superior to the Civil power.

He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation:
For Quartering large bodies of armed troops among us:
For protecting them, by a mock Trial, from punishment for any Murders which they should commit on the Inhabitants of these States:
For cutting off our Trade with all parts of the world:
For imposing Taxes on us without our Consent:
For depriving us in many cases, of the benefits of Trial by Jury:
For transporting us beyond Seas to be tried for pretended offences
For abolishing the free System of English Laws in a neighbouring Province, establishing therein an Arbitrary government, and enlarging its Boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule into these Colonies:
For taking away our Charters, abolishing our most valuable Laws, and altering fundamentally the Forms of our Governments:
For suspending our own Legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever.

He has abdicated Government here, by declaring us out of his Protection and waging War against us.

He has plundered our seas, ravaged our Coasts, burnt our towns, and destroyed the lives of our people.

He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation and tyranny, already begun with circumstances of Cruelty & perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation.

He has constrained our fellow Citizens taken Captive on the high Seas to bear Arms against their Country, to become the executioners of their friends and Brethren, or to fall themselves by their Hands.

He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless Indian Savages, whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions.

In every stage of these Oppressions We have Petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury. A Prince whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people.

Nor have We been wanting in attentions to our Brittish brethren. We have warned them from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us. We have reminded them of the circumstances of our emigration and settlement here. We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these usurpations, which, would inevitably interrupt our connections and correspondence. They too have been deaf to the voice of justice and of consanguinity. We must, therefore, acquiesce in the necessity, which denounces our Separation, and hold them, as we hold the rest of mankind, Enemies in War, in Peace Friends.

We, therefore, the Representatives of the united States of America, in General Congress, Assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the Name, and by Authority of the good People of these Colonies, solemnly publish and declare, That these United Colonies are, and of Right ought to be Free and Independent States; that they are Absolved from all Allegiance to the British Crown, and that all political connection between them and the State of Great Britain, is and ought to be totally dissolved; and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do. And for the support of this Declaration, with a firm reliance on the protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.

Button Gwinnett
Lyman Hall
George Walton

William Hooper
Joseph Hewes
John Penn
Edward Rutledge
Thomas Heyward, Jr.
Thomas Lynch, Jr.
Arthur Middleton

John Hancock
Samuel Chase
William Paca
Thomas Stone
Charles Carroll of Carrollton
George Wythe
Richard Henry Lee
Thomas Jefferson
Benjamin Harrison
Thomas Nelson, Jr.
Francis Lightfoot Lee
Carter Braxton

Robert Morris
Benjamin Rush
Benjamin Franklin
John Morton
George Clymer
James Smith
George Taylor
James Wilson
George Ross
Caesar Rodney
George Read
Thomas McKean

William Floyd
Philip Livingston
Francis Lewis
Lewis Morris
Richard Stockton
John Witherspoon
Francis Hopkinson
John Hart
Abraham Clark

Josiah Bartlett
William Whipple
Samuel Adams
John Adams
Robert Treat Paine
Elbridge Gerry
Stephen Hopkins
William Ellery
Roger Sherman
Samuel Huntington
William Williams
Oliver Wolcott
Matthew Thornton

I LOVE THIS COUNTRY

HAPPY 4TH OF JULY TO ATiM.

But beware the new immigration policy set to go into effect soon.  I blame Obama.  Mark, lms and I should be very afraid.

Conservatives Behind the 8-Ball

Ever since last week I have been contemplating writing a post about the Supremes and judicial philosophy, but have not had the time to really put my thoughts in order, so I have put it off. Today, however, William McGurn, writing in the WSJ, noted in passing precisely the topic I wanted to write about, so I figured I would just highlight what he said. His article is primarily about Chief Justice Roberts’ decision to switch votes on the ACA case for what are seemingly political rather than constitutional reasons. But what caught my attention, and what I have been thinking about for a few days now, was the following aside:

Justice Scalia’s dissent in Casey illuminates a political handicap imposed on conservatives by their own principles. Whereas the liberal belief in a living Constitution allows them to stretch its limits to justify almost any desired outcome, conservatives believe the Constitution imposes real limits.

This strikes me as a real handicap. This is not to say that conservatives on the Court everywhere and always apply that belief and those limits consistently. We need look no further than Roberts and the recent decision itself to know that. But it seems to me that conservatives are uniquely open to the charge of failing to uphold their self-proclaimed principles because they actually profess to have some.

Putting aside whether or not the charge of hypocrisy actually had merit, at the very least it is fair to question whether or not the conservative bloc ruling in Bush v Gore set aside ostensible principles (eg states rights) in order to reach a politically desireable result. But imagine a mirror situation in which the reverse had happened. Imagine that a liberal majority on the court had made precisely the same ruling resulting in a Gore victory. The liberals might be accused, as they often are, of simply ignoring the constitution out of convenience. But who could ever seriously charge them with judicial hypocrisy? If liberal constitutional philosophy is correct and it is true that the constitution is “living” and therefore its meaning perpetually in flux depending social norms, circumstances, or who knows what else, then at any given time their interpretation of it may well be the “correct” one, even if it stands in contrast with the plain words of the constitution itself.

Basically, it seems to me that conservatives advance a theory of constitutional interpretation that makes conservative opinions objectively critique-able on their own terms, while liberals do not. That is why hand-wringing over the legitimacy and politicization of the Court inevitably centers around conservative Court opinions, and never, ever around liberal Court opinions. Again, the recent ACA case is instructive. Conservatives are now attacking Roberts, not the liberal bloc that voted with him and made up 80% of the majority, for what seems to be a politically inspired opinion, not because they think liberals aren’t being political, but because Roberts seems to have gone against his principles, while the liberals were just doing what liberals do.

Morning Report 7/3/12

Vital Statistics:

Last Change Percent
S&P Futures 1358.2 0.6 0.04%
Eurostoxx Index 2309.4 17.3 0.75%
Oil (WTI) 85.75 2.0 2.39%
LIBOR 0.461 0.000 0.00%
US Dollar Index (DXY) 81.93 0.057 0.07%
10 Year Govt Bond Yield 1.59% 0.00%
RPX Composite Real Estate Index 182.8 0.3

Markets are flat ahead of the 4th of July on a holiday-shortened day.  Bonds will close at 1:00 pm, and stocks will close at 2:00. There is very little economic data this morning.  We have the jobs report later this week and then earnings season kicks off with Alcoa on Monday.

Bob Diamond is out at Barclay’s after political pressure from the LIBOR pricing scandal forced him to resign. He will be in front of Parliament tomorrow to address questions regarding the scandal and is prepared to fight back with claims the regulators knew what was going on and didn’t object for fear the banking system would be further destabilized if the markets knew the truth.  Needless to say, the politicians are shocked to find gambling in this establishment.

The Federal Reserve Bank of San Francisco has an interesting paper on housing bubbles. Needless to say, they let the Fed off the hook, and continue with the standard academic “angels dancing on the head of a pin” argument about how to identify a bubble. But that isn’t the most interesting part of the paper. Most people know that Scandinavia experienced a massive housing bubble in the late 80s.  When it burst, many banks failed, and Sweden effectively nationalized its banking system.

However, in contrast to the Japanese experience, house prices in Norway had a V-shaped rebound and have subsequently passed their old peak by 130%. This has caused the household debt to income ratio to increase to 210%.  By way of comparison, that ratio peaked at 130% in 2007 here. If oil prices collapse and that bubble bursts, Norway will undoubtedly hit the wall. It will be interesting to see how that government reacts.  But the more interesting observation is how you can have a second bubble so soon after one bursts.

The US government is pulling out all the stops trying to put the air back into the housing bubble.  Most people assume they will fail. Norway shows that it is possible they may be able to pull it off.

Right now, all the pundits and talking heads are discussing how smart the Scandinavians have been with their “smart regulation.” and how we should emulate them. Similarly, everyone loved the US model in the late 90s and everyone thought the Japanese had cracked the code in the 80s.  Often times, the countries that are the flavor of the day just happen to be in the glory days of a bubble that will eventually burst. That prosperity is never permanent.

Have a happy 4th of July.

Morning Report 7/2/12

Vital Statistics:

  Last Change Percent
S&P Futures  1355.4 -1.0 -0.07%
Eurostoxx Index 2280.3 15.5 0.69%
Oil (WTI) 83.5 -1.5 -1.72%
LIBOR 0.461 0.000 0.00%
US Dollar Index (DXY) 81.88 0.253 0.31%
10 Year Govt Bond Yield 1.59% -0.06%  
RPX Composite Real Estate Index 182.8 0.3  

Markets are flattish after Friday’s furious rally and some disappointing economic data. Expect low volume this week as the 4th falls on a Wed. There are no major European events on the calendar this week. Bonds and currencies should close early tomorrow. The 10-year is up about point and a half and MBS are up slightly.

In another bullish sign for the real estate market, we have been seeing someone establishing a long position in the RPX futures market.

Merger Monday is back, as we have $15 billion in new deals this morning. Bristol-Myers is buying Amylin and Linde is buying Lincare. Dell has won the bidding war for Quest Software.

The ISM PMI showed contraction in the manufacturing sector – the first such reading since July of 09 – as new orders collapsed. Economists missed the number big-time, as the index came in at 49.7 vs expectations of 52. The drop in commodities prices dropped the prices paid index to 37 from 47.5.

The Markit PMI shows that manufacturing is not accelerating as the economy expands. The index fell to 52.5 from 54 in May. Remember that 50 is more or less the “zero point” and numbers below indicate a contraction in business conditions. In other words, the latest reading indicates conditions are getting better, but just barely. Weakness in Europe is being offset by stronger domestic demand.

Late Sunday Funny

For some reason this reminds me a little of ATiM.