February 19, 2013 Update

DJIA:13,981 NASDAQ:3,192 10-YR TRS: yield 2.009% Oil:$95.86 EURO:$1.3351 YEN:93.96

You Are Probably Not Special. 

Within the last decade, children have been raised to believe they are special. Everyone is a “winner.” Everyone “earns” a trophy. These “special” kids have grown up convinced they will be successful because society has told them they will be. I believe this theory is a taking a toll on the US economy. Student loans have now totaled to over $956B, trumping both car loans and credit card debts. Through the rise of student loans, students are leveraging themselves for success; even if they’re perusing careers in fields that traditionally do not pay well. I posit that because society has coddled the children of my generation, students are more confident than ever that they will have the ability to repay the money they borrowed to ascertain expensive educations. I can only speak on behalf of NYU, but I find it astounding that so many of my peers are choosing to graduate in over $200k of debt only to enter a terrible job market. Defaulting on a student loan is not an option. As a result, disposable income that could have been stimulating the economy is, instead, being used to pay back student loans. But think about it, who is to blame for this student loan epidemic- society who has encouraged the future generation, or the student with big dreams? In all honestly, if you had been told you were an indelible winner for the entirety of your life, would you be able to conceptualize failure?

Domestic News

• Market Update. Futures are moving higher as investors become confident that activity in mergers and acquisitions will increase.
• The National Association of Homebuilders will release its February index at 10am, which is forecast to rise to 49 compared to January’s 47 level. 

International Updates

Asia

• Market Update. Markets in Hong Kong and Shanghai are trading significantly lower as a result of the Chinese government imposing more strict restrictions on home purchases.
• The Japanese finance minister denies the rumor that Tokyo is considering purchasing foreign bonds. As a result, the yen rebounded against the USD and EUR. 

Europe

• Market Update. Trading in the green as investors build confidence about the health of the German economy as the German ZEW report came out better than expected. 
• The German February ZEW index of investor confidence rose to 48.1 from 31.5 in January, increasing for the third consecutive month in a row. 

Corporate

• Thieves have successfully stolen €350M worth of diamonds after raiding a Brink’s  (BCO) truck at Brussels's airport just as the precious rocks were being loaded onto a Swiss airplane. No one was injured.
• Macy’s (M) is scheduled to go to court today to ask a judge to stop J.C. Penny (JCP) from selling particular Martha Stewart Living Omnimedia (MSO) products. 
• OfficeMax (OMX) and Office Depot (ODP) are talking about merging. The deal would is expected to generate $18B in revenue for the conglomerate, compared to $25B for Staples (SPLS). 
• Members of the Boeing (BA) Speea engineer and technical workers union (about 23,000 employees) are expected to finish voting today on whether to authorize strike action and to accept BA’s newest contract offer.
• Nestle (NSRGY.PK) is the newest addition to the list of major food companies to be involved into the European horse-meat scandal. Traces of equine DNA tested positive in more than 1% of pasta meats, which have been removed from stores in Italy and Spain yesterday. The scandal is affecting demand for frozen meat in the U.K., burger sales have dropped 40% for the week of February 2nd.