The bond market will be closing in the early afternoon at 13:00cdt {1:00pm, 18:00gmt} in honor of the Independence Day tomorrow. Obviously, all financial markets will be closed tomorrow.

This blog agrees with this holiday and with this closing. That may sound odd, but there are holidays that this author refuses to take. Labor Day is one such example.

Independence Day is one of the few ‘true holidays’. In these politically correct modern times it is almost exclusively called the 4^th of July. And this name refers to our nation’s birthday. Nothing wrong with that, but every nation has a birthday. Even monsters like N. Korea’s Kim Jung mentally Ill celebrates a national birthday.

Our nation is special. In the past the 4^th of July was also called Independence Day as it celebrated our freedom from the tyranny of King George III. But traditionally, it memorialized much more.

It represents a whole new view of government. Authority went from the king on down before 1776. After then it went from the people down. From then on, rights were not bequeathed from the king. They were ‘self-evident’.

Look at the change from just  an economic viewpoint. Imagine a man named Joshua. He invents the better mouse trap. Before 1776 Joshua would have to get permission from the King or governmental authority before selling his mousetrap. This is called mercantilism. Mercantilism can be trouble if the king’s friends make mousetraps.

A form of mercantilism is practiced in many nations to this day. Mexico is one such example. Many others are third world; not a coincidence. (Mercantilism and socialism often work hand-in-hand.)

After 1776 free market capitalism was instituted as law. (It was practiced in the 13 colonies prior to 1776.) In free market capitalism, Joshua would take his mousetrap to the marketplace without prior government approval. {Yes, Joshua can’t violate existing health & safety laws. Or copy someone’s patent or trademark.}

There is a reason that nations practicing free market capitalism economically beat the pants off mercantilists, communist and socialists.

Happy Independence Day!!!!


TODAY 03 JULY 2007

Factory Orders came in much stronger than what most analysts were predicting. Predictions ranged from 0.0% to -1.3%. Again, only one source was looking for the 0.0%. This source can often be way outside of the range of others. When they are far out from others, they often can be correct.

The rest of the analysts were looking for -1.0% to -1.3%. Factory Orders were reported at -0.5%. While lower than the previous month, it was higher than what analysts were looking for.

The National Association of Realtors reported that Pending Home Sales were far lower than even last month’s reported decline of -3.7%. The number of residential purchase contracts that are signed, but awaiting closing was -13.3%.
It is too bad that the bond market ignored this number. It would have been great for rates. As it is, it is only bad news for the readers of this blog.

With Pending Home Sales ignored, and Factory Orders above anticipated the bond market combined that info with an early closing and day off tomorrow. Rates are higher as a result. The 10-year Treasury is +.039% with the rate at 5.037%.

Steve Boxmeyer [612] 799 – 6858
steve@LendWithIntegrity.com