February 22, 2013 Update

DJIA:13,880 NASDAQ:3,131 10-YR TRS: 12/32 yield 1.977% Oil:$92.84 EURO:$1.3190 YEN:93.11

On Risk & Responsibility. 

Lawyers are responsible for the clients they represent in a court of law and are subject to harsh judiciary consequences if they act in an unlawful manner. Doctor aim to improvement patients’ health, but failure results in malpractice charges. Many important roles within society, like a doctor or lawyer, have ethical responsibilities with government enforced consequences when such ethics and morals go astray. On the other hand, individuals who manage money rarely have to face repercussions when their risky behavior results in poor choices. Lets be honest with ourselves, being trusted with someone else’s money comes with very little fiduciary responsibilities. Jon Corzine ran a highly leveraged fund, and with one bad trade M.F. Global blew up. Yet, Mr. Corzine has yet to face any legal ramifications. There is no denying that managing money is an extremely important role within society, but when will we begin a precent for honesty and moral conduct within the financial industry? 

Domestic News

• Market Update. Futures are slightly higher as optimistic investors wait for the release of today’s round of earning, inviting participants to take advantage of the pullbacks. 

International Updates

Asia

• Market Update. Chinese and Hong Kong stock markets traded lower as a result of policy tightening. Australian and Japanese equites were in the green as market participants took advantage of yesterday’s sharp declines. 
• Last month, prices for new homes in China rose in 53 out of 70 cities, enforcing the belief that the Chinese government is going to continue tightening policy. 

Europe

• Market Update. Mostly traded up in reaction to the German business-climate data, which came in better than expected. 
• The German IFO business climate rose to 107.4, which is better than the expected consensus of 105 and higher than the pervious statistic of 104.3. 
• Germany received its first government surplus in five years with local governments and social securities funds heaping with cash! “Net lending” was 0.2% of GDP (€4.2B). The central and and state government were not in the green, but were still able to cut their deficits. 
• Italian markets are going steady before the storm - the Italian election that is! Silvio Berlusconi’s Freedom Party is second with 30% of the polls behind the unexpected leader, the center-left Democratic Party. Investors are worried for obvious reasons.
• The European Commission has lowered its 2013 outlook with a prediction that the economy will contract by 0.3% this year before returning to a steady growth of 1.4%. The EC is always expecting inflation to fall to 1.8%, which would pressure the European Central Bank into lowering interest rates.  

Corporate

• In an attempt to tighten rules regarding sales and the business structure, Herbalife (HLF) is rumored to be considering terminating a relationship with one of its 49 top salesman. 
• ING (ING) CEO Jan Hommen will step down in October. Ralph Hamers, the head of the Dutch bank’s Belgian operations, will take Hommen’s place as the new CEO.