Topley’s Top Ten – April 18, 2018

1.VIX Roll Over.

Arrow #1-smart money max short VIX….Arrow #2 smart money max long VIX

2.China 13% Correction Off Highs…Steepest Global Slump.


Exposure Breakdown-China 30% of EEM

Chinese Government Plunge Protection Team Defending 3000 Level in Shanghai Index.

Wednesday’s rally “is an important signal that the national team may have entered the market,” said Zhang Gang, a Shanghai-based strategist at Central China Securities Co. “The national team is likely to defend the Shanghai Composite at 3,000. They need to hit the brake to prevent the selloff from accelerating.”

The Shanghai gauge closed 0.8 percent higher at 3,091.40, after earlier losing as much as 0.8 percent. Large-cap banks and oil companies, rumored to be the favored buying targets of state-run funds, were the biggest contributors to the rally.

Down $1 Trillion, World’s Worst Stocks Near Make-or-Break Level

Sofia Horta E Costa and Emma Dai

3.Ecommerce State Taxes Hit Supreme Court….

Hear Ye, Hear Ye—South Dakota v. Wayfair Is Now in Session

When Justice Alito and Justice Ginsburg aren’t battling it out in Fortnite, they’re ruling on Supreme Court cases.

So today, they (and the other seven justices) will hear arguments from South Dakota and online furniture seller Wayfair. And the stakes are high: if South Dakota wins, e-commerce companies like Wayfair could be forced to start collecting sales tax in all 50 states.

The background: In 2016, South Dakota issued a new law for all retailers—if you conduct at least 200 transactions or $100,000 worth of business within state lines, you must collect the state’s sales tax.

The case: Is this law constitutional? Wayfair says it’s not.

First things first, why wouldn’t this be constitutional?

Well, consider the commerce clause—a subsection of the Constitution that grants Congress the right to regulate interstate commerce. The issue is, it hadn’t really followed through, leaving states in limbo about how to enforce sales tax for cross-border transactions.

But in 1992 the Supreme Court cleared things up. In Quill v. North Dakota, the state tried to tax office supplies retailer Quill for doing business within state lines. And since Quill didn’t have a “physical presence” in North Dakota, the Supreme Court ruled in favor of the company.

Fast forward 26 years: Wayfair is using the Quill verdict to its advantage, arguing South Dakota’s law is unconstitutional because it has no “physical presence” in the state.

Which bring us to the much larger debate…

…in an age of online retail, does this “physical presence” requirement need to be reconsidered? Let’s present the facts:

  • E-commerce now accounts for 9% of U.S. retail sales.
  • Because companies don’t have physical locations in most states they sell to, state and local governments missed out on up to $13 billion in tax revenues in 2017.
  • Even if brick-and-mortar retailers can match on prices, having to collect sales tax gives online sellers an unfair competitive advantage.

Bottom line: If the Supreme Court sides with South Dakota, states across the country will start re-writing tax laws. And that’ll hurt behemoths like Amazon, considering Bezos is the world’s poster child for avoiding state sales tax.

4.Creative Destruction Hits ETFs/ETNs

50 Ipath ETNs Closed Last Week.

From Nasdaq Dorsey Wright

5.Gasoline as a Percentage of Retail Sales Still Near 18 Year Lows.

Rich Farr, Chief Market Strategist
Jim McGovern, Market Strategist

6.Housing –Days on Market 37 Days Down from 100 Days Just a Couple Years Ago.

Numbernomics Blog

Builders remain enthusiastic in part because they see traffic through the model homes climbing at a steady rate.

Mortgage rates are at 4.4% which is quite low by any historical standard.

The average home stays on the market for 37 days currently which is down from 100 days a few years ago.  One-half of the homes coming on the market sell within one month.  This statistic provides compelling evidence that the demand for housing remains robust.

7.Commercial Real Estate Index Rolling Over.

Commercial real estate prices are peaking, see chart below. Even though we are late cycle on a number of indicators such as this one we still think that the tailwind from the fiscal expansion is so significant that the economy will continue to do well with above potential growth over the coming quarters.


Let us know if you would like to add a colleague to this distribution list.
Torsten Sløk, Ph.D.
Chief International Economist
Managing Director
Deutsche Bank Securities
60 Wall Street
New York, New York 10005
Tel: 212 250 2155

8.South Korea is 21% of Foreign Investment in  U.S. Real Estate Debt.


South Korean Investors Pile Into U.S. Commercial Property Debt

Some 21% of foreign investment in U.S. real-estate debt as of mid-April came from the Asian nation

An investor based in South Korea recently agreed to provide a loan to RFR Holdings for the refinancing of 285 Madison Ave. in New York, according to a report by JLL Global Capital Markets. PHOTO: MICHAEL BUCHER/THE WALL STREET JOURNAL

Esther Fung and Kwanwoo Jun

U.S. commercial real-estate owners are raking in debt capital from South Korean investors hunting for higher returns and better asset diversification.

In New York City, KTB Asset Management recently agreed to provide a five-year, fixed-rate loan to RFR Holdings for the refinancing of 285 Madison Ave., while IGIS Asset Management provided $220 million in debt for 787 7th Ave., according to a report by JLL Global Capital Markets.

In all, investors based in South Korea accounted for 21% of foreign investment in U.S. real-estate debt as of mid-April, the largest proportion among foreign investors, according to data firm Preqin. Canada and Australia are second and third place, at 12% and 11%, respectively. Global fundraising for U.S.-focused real-estate debt reached $17.8 billion in 2017, up from $10.8 billion in 2016, Preqin said.

Many institutional investors in the U.S. already have been pouring money into real-estate debt, despite widespread expectations the current real-estate cycle is near a peak and property prices might get wobbly. Debt is seen as a safer bet and provides some cushion for lenders depending on the loan-to-value ratio. Generally, if a property has an 80% loan-to-value, it implies that property prices have to fall more than 20% before the lenders take a loss.

9.Farmland=Population Growth…Podcast Attached.

Tune in to great podcast discussion on farmland from Jeremy Schwartz and Wes Gray on Wharton Behind the Markets…Click below..

10.6 Ways That Night-time Phone Use Destroys Your Sleep

Using your phone at night will make you sleep-deprived and exhausted. Really.

Source: Open clipart-Vectors/Pixabay

I’ve written a lot about sleep, but it’s time I wrote an article that’s just about the phone problem.

I see many people in my medical work who are looking for sleepingpills because they can’t get a good night’s rest. Coachingclients, too, complain of trouble winding down, poor sleep and broken sleep.

The first thing I target?

The phone.

People have a vague idea that using their phone before bed (or in bed) affects their sleep, but that vague awareness usually isn’t enough to seriously change their habit.

You need to change your habit, seriously.

Here, based on findings from a study by Harvard researchers(link is external), are 6 reasons why you need to stop using your phone (and any other screens) in the hour or two before bed:

1) It will take you longer to fall asleep

Study participants who were using an E-reader before bed (a blue light-emitting screen similar to a tablet or smartphone) took on average of 10 minutes longer to fall asleep versus those who were reading a normal print book. Try reading a real book at night instead of doing anything on your phone or watching TV or Netflix, and you’ll see how much sleepier you feel and how much more quickly you fall asleep.

2) It will mess with and delay your circadian clock rhythm

It seems almost every week we get more data which illustrates the paramount importance of a healthy, well-synched circadian rhythm. So many (almost all?) of your body functions hinge on this. Your metabolism, your mood, your appetite for sweet or junky foods (and in turn your weight), your risk of developing diabetes and possibly even cancer, the list goes on and on.  Artificial light at night, especially the blue type from phones and screens, confuses your brain and messes up this clock.

3) It will suppress your melatonin secretion when you need it most

The hormone melatonin plays a key role in maintaining a proper circadian rhythm and promoting deep, restorative sleep. It may also play a role in protecting the health of your brain as you age. Even low levels of light, such as a dim bedside lamp, can decrease the production of melatonin (for this reason, you should never sleep with a “nightlight” on and use good blackout curtains). The light emitted from phone screens, shining directly in your eyes, suppresses the production of this crucial hormone in the evening. If you must look at a screen, turn it way down and use any program available (such as “night shift” on an iPhone)  that will decrease the component of blue light.

4) It will decrease your REM sleep

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REM sleep is a stage of sleep that is critical for restoration of your mind and body. REM sleep solidifies memories and is tied to your creative and problem-solving skills. If you don’t get enough of it, it can leave you feeling groggy and having difficulty concentrating the next day.

5) It will make you more alert when you want to wind down

Lying in bed, reading your phone is relaxing, right? Dead wrong. The research shows that it actually wakes you up, making you feel more alert, less sleepy, and more likely to delay even trying to go to sleep. You know that delicious feeling you get when you’re reading a book in bed, and your eyes start to droop, and then you reach over and turn out the light to got to sleep? Looking at a screen at night will cause the reverse. You’ll get more awake, stay up later, and kick yourself for doing it the next morning, when you wake up exhausted.

6) You will feel more tired and less alert when you wake up

According to the Harvard study, reading a screen before sleeping will cause you to feel more sleepy and groggy when you wake up in the morning. Those who read from a screen before bed reported taking hours longer to fully “wake up” the next day, compared to those who read a printed book instead.

I hope this is hitting home for you.  Looking at screens at night, especially shortly before bed, will make it harder for you to go to sleep. You’ll be less likely to feel like going to bed, even though your body may desperately need the sleep. Your circadian clock will get messed up and affect your health in a multitude of negative ways. You’ll sleep less deeply, wake less refreshed and it may take hours for you to properly wake up the next day (well into your workday, whoops).

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I know how hard it is to break this habit. I typically have to coach my clients on phone-avoidance strategies and hold them accountable to their commitments. You have to find other bed-time routines that don’t involve screens, that you find enjoyable and relaxing.

For myself, I’ve found that setting an alarm on my phone is really helpful. I usually go to bed between 10:30 and 11 pm, so I’ve set a reminder to go off at 9 pm, telling me to put the phone down and reminding me that I need to stop all screens at that point, for the rest of the evening. No phone, no computer, no tablet, and no TV. Just real books, listening to music, hanging out with my husband, whatever doesn’t involve a screen. There are actually lots of wonderful options!

I implemented this recently as I’d been falling back into the nighttime phone habit, and my sleep had really suffered as a result. Ever since I got back into the strict no-screens after 9 pm regime, I have truly been sleeping like a baby. I hardly wake up throughout the night, sleep a solid 8 hours, and waking feeling refreshed and ready to go. The difference is dramatic.

I urge you to try this new habit out, for at least a week.  I’m trusting that the impact on your life will be so positive, that you won’t ever want to go back to scrolling through Facebook in bed, ever again. (And, of course, if this doesn’t do the trick and you continue to experience serious sleep challenges, please go see your doctor to rule out other causes of poor quality sleep)

 Copyright Dr. Susan Biali Haas 2018