HAPPY FOURTH

If you ever pretended to be a journalist--and mostly that's all we have today, pretenders--you may have gotten lucky and crossed paths with the works of HL Mencken.

                                                           

Warren Buffett might be known as the "Scold of Omaha," but that's really a badly repeated joke. Known as the "Sage of Baltimore," Mencken was, like all humans, flecked and flawed. An essayist, journalist, editor and, perhaps most of all, critic of American life and culture, Henry Louis Mencken for all his shortcomings got many things correct. And one of them on this Fourth of July most memorable is the statement quoted below.

From Plato to Mencken and way beyond, the tentacles of centralized government get ever longer in their assault on human dignity and liberty.

HL Mencken warned us about the spread of government and that slow slipping away of liberty when he said "The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary." For that matter Plato was probably the first to warned us about governments inevitable infringement of the rights of the people telling us so very long ago "When the tyrant has disposed of foreign enemies by conquest or treaty and there is nothing to fear from them then he is always stirring up some wary or other in order that the people may require a leader." I worry that the political parties have done such a fantastic job of spreading government s reach into our daily lives by sowing dogmatic discord throughout the populace. The straights hate the gays, the blacks don't trust the whites, the Northerner dislikes those in the south, the farmer hates the city dweller. We turn gay rights and family values into war cries and march off under our banner to demand our rights and more importantly privileges. The two parties rally the folks around their causes and drive a deep divide into the populace all the while strengthening their death grip on the seat of power and the public purse.

--dailyspeculations.com

WEAK OIL

Oil and safe-haven favorite gold were also under pressure as the unrest in Iraq and between Ukraine in Russia - supportive factors for both in recent weeks - remained in a lull.

The Iraqi army retook Saddam Hussein's home village overnight, while former Iraqi parliament speaker Osama al-Nujaifi said he would not run for another term, a move that should make it easier for the Shi'ite parties to replace Prime Minister Nuri al-Maliki with someone more widely accepted.

Russian President Vladimir Putin also called for better relations with the United States on Friday in a congratulatory message to President Barack Obama marking U.S. Independence Day.

Brent crude dipped back below $111 a barrel and was set to post its biggest weekly loss since early January. U.S. oil futures were down for a seventh straight and heading for their longest such run since 2009. [O/R]

"Supply fears are easing somewhat, but Iraq is setting a high floor on prices," said Victor Shum, vice-president of energy consultancy IHS Energy Insight.

--Reuters 7/4/14

Yielding 3.4%, the 15 Dow utilities disbursed a total of $4.96, up about 2% from $4.87 a year earlier. NiSource (NI), Southern Co. (SO), and Williams Cos. (WMB) raised their quarterlies. NiSource has an August pay date, while Williams announced a second boost for sometime in the third quarter.

Duke Energy (DUK) on Tuesday started the third-quarter dividend ball rolling for the Dow utilities with a boost in its quarterly to 79.5 cents a common share from 78 cents, for a 4.4% yield. Duke has paid dividends without interruption since 1926, and this is its seventh yearly increase in a row and heading for their longest such run since 2009. [O/R]
 --Barron's 7/3/14

Energy sectors currently under pressure from O's anticarbon policies could be in for relief, the report speculates. The Keystone Pipeline would be built, benefiting some refineries along the Gulf Coast, including those of Valero (VLO) and Phillips 66 (PSX) that can process lower-grade Canadian crude. Republicans also would remove restrictions on liquefied-natural-gas exports, which would lift prices. That, in turn, would boost coal demand, benefiting the Market Vectors Coal exchange-traded fund (KOL) and companies such as Arch Coal (ACI) and Peabody Energy (BTU).

Of course, it's still a long way until November. Never underestimate Republicans' ability to blow an election, as they did in both 2006 and 2010.
--Barron's  7/3/14

One last peek at the first half.

Asset Percent gain                                                               

Gold 9 percent

S&P 500 6 percent

MSCI World 4 percent

Commodity ETF 4 percent

Total bond ETF 2 percent
--MarketWatch 7/3-14