Topley’s Top Ten – August 13th, 2019

1. Microsoft, Apple, Amazon, Alphabet, and Facebook Make Up Half of Tech’s Market Cap.

In late 2018, shares of Silicon Valley’s finest tanked some 16% in three months. Since then, Big Tech has been busy climbing back near record highs. And, as The Economist points out, listed tech firms now make up more than 25% of the value of U.S. stock markets. 

The Economist

The last time tech was this important was 2000, when the sector briefly made up one-third of the value of all U.S.-listed equities. Back then, the concern was that tech firms were “too flimsy” for their valuations. We all know how the dotcom bubble ended, but…

Today’s a different story—tech’s big five (Microsoft, Apple, Amazon, Alphabet, and Facebook) account for 12% of pre-tax profits among the U.S.’ non-finance firms, up from 4% in 2010.

Zoom out: Those big five make up half the tech industry’s market value, meaning new worries for the new millennium. Today, the concern is less about financials and more about the idea that Big Tech has accumulated too much power.

Morning Brew

2.Chinese Army Trucks Lined Up Across Border from Hong Kong.

Disturbing video taken in #Shenzhen just across the boarder with #HongKong. Something extraordinarily bad is about happen. #China #HongKongProtests #Democracy #SaveHongKong

3.Argentina Sees 2nd Biggest One Day Market Crash in History.  -50% Intra-day

Investors also remained on edge over the damage caused by Monday’s crash in Argentina – the 2nd biggest one day market crash in history which saw about 50% of the local stock market value wiped out in one session – after its President Mauricio Macri became the latest pro-free market, pro-reform leader to be given a beating at the polls by a populist rival.

4.Another Big Euro Bank Breaks to New Single Digit Lows.

Comerzbank New Lows

5.25%  Tariffs Raise The Game to Another Level.


When the Trump administration first imposed 10% tariffs on many Chinese goods about a year ago, suppliers, importers, distributors and retailers worked together to defray the cost and try to avoid passing it on to consumers for fear of losing sales. Mr. Stone and his Chinese partners initially ate most of the vinyl flooring tariff cost, passing just a tad on to retailers.

Tariffs at the 25% level are quite another matter. They are upending cost projections and business models and straining relationships built up over decades. For operations such as Mr. Stone’s, the math is painful. He and others are trying to figure out how much of the new expense can be dispersed throughout the supply chain, how much should be passed to customers, at what potential cost in lost sales, and how much they must swallow.

6.U.S. Budget Deficit Already Exceeds Last Year’s Total Figure

Sarah McGregor
BloombergAugust 12, 2019

(Bloomberg) — The U.S. fiscal deficit has already exceeded the full-year figure for last year, as spending growth outpaces revenue.

The gap grew to $866.8 billion in the first 10 months of the fiscal year, up 27% from the same period a year earlier, the Treasury Department said in its monthly budget report on Monday. That’s wider than last fiscal year’s shortfall of $779 billion — which was the largest federal deficit since 2012.

So far in the fiscal year that began Oct. 1, a revenue increase of 3% hasn’t kept pace with a 8% rise in spending. While still a modest source of income, tariffs imposed by the Trump administration helped almost double customs duties to $57 billion in the period.

Republican tax cuts, increased federal spending and an aging population have contributed to the fiscal strains, though the GOP says tax reform enacted last year will spur economic growth and lift government revenue. Corporate income-tax receipts rose 3% between October and July, while individual income taxes gained 1%, according to Treasury data.

The annual budget deficit is expected to exceed $1 trillion starting in 2022, the Congressional Budget Office has said. The non-partisan agency is scheduled to update its latest 10-year budget and economic forecasts on Aug. 21.

For the month of July, the budget deficit was $119.7 billion, compared with $76.9 billion a year earlier, according to Treasury. Still, “July 2019 was a record receipts month, and the month is generally a deficit month — 63 of the last 65 times,” a senior Treasury official said in an accompanying statement.

–With assistance from Sophie Caronello and Nancy Moran.

©2019 Bloomberg L.P.

7.Mortgage Debt is 70% of All Consumer Debt.

3.25% -4.25% fixed low mortgage rates vs. rising wages. Mortgage debt the most significant consumer debt we have. It is roughly 70% of all consumer debt. Homeowners in this cycle have the best loan profiles I have seen in my 23 years in finance with substantial nested equity


From Michael Batnick Blog

8.How to Use the Classroom Mindset to Experience Significant Change

Lauren Lawley Head

My mother used to wash old tennis balls.

Toward the end of every summer, I would visit our community tennis club and ask the pro if she had any dead balls that I could take off her hands. I would deliver a bag to my mother, who would endure the thunderous sound that comes from laundering dozens of tennis balls in a residential washing machine, then pass the lot over to my father so he could drill holes in each one.

Mom taught elementary school for 29 years, most of that time in kindergarten. The tennis ball project was just another ritual that comes with being part of a kindergarten teacher’s family, just like learning to run a laminating machine or how to turn two dozen pint milk jugs into graham cracker gingerbread houses. Once my father was done with them, the tennis balls fit perfectly onto the feet of a standard elementary school chair and eliminated the high-pitched scraping noise that otherwise occurred every time a child shifted his or her seat. When you are charged with taking a classroom filled with 5- and 6-year-olds who have never been to school before and turning them into students, it’s the little things that count.

Each year, like teachers across the country, mom would head back into the classroom a few weeks before classes began. She would spend hours in her hot room getting things ready for the next group of wide-eyed youngsters prepared to make their elementary school debut. She would make nametags and daily schedules, create activity stations and set up a reading corner. She would decorate her door and bulletin boards with messages of welcome and possibility. And, yes, put tennis balls onto the feet of the chairs.

* * *

The start of a new school year is as much, if not more, of a marker for new beginnings and transformative change as New Year’s Day. Stores are filled with supplies to help you plan and organize your life. There is a fresh batch of sports leagues and fitness classes to try. Regularly scheduled social events, from Bible studies to poker night, return from summer hiatus.

Related: The Grown-Up Guide to a Back-to-School Fresh Start

Even if you’re not in school and don’t have school-age children at home, chances are you feel this seasonal change too. The swimming pools close. The nights begin getting longer. The backyard barbecues become fewer and farther between. The rhythm of life shifts away from vacation mode and toward something more structured and fast paced. We are no longer basking in the glorious sunshine but once again on the move and going places.

Or are we? Children certainly are. Kindergarteners are walking into a school for the first time, backpacks filled with supplies and ready to be transformed into students. In just the first few days, they will learn to follow a daily schedule, be responsible for themselves, and work together in a team. Over the next nine months, they likely will make tremendous progress in multiple subjects: math, reading, writing, science, social studies and more. By the last day of school, they will look like different people. Don’t believe me? Check the endless first day/last day photos their parents post on social media.

What happens inside those classroom walls that conditions us to be learners, to create a new vision for ourselves and then turn that vision into reality?

Similar transformations happen to adults pursuing structured education. The first day/last day photos of college students may not come with the adorable dimpled cheeks and gap-toothed smiles of elementary school, but the trajectory of change is just as steep. But once we leave formal education behind, we rarely experience a similar level of progress in such a compressed amount of time.

Why is this? What happens inside those classroom walls that conditions us to be learners, to create a new vision for ourselves and then turn that vision into reality?

Teachers call their secret sauce classroom management. The idea is that if you provide the right structure to the environment and then follow those structures religiously, you can achieve more significant results at scale.

Consistent structure is powerful. One year when my mom was teaching, one of her colleagues had a transfer student join her class in March, quite late in the school year. The little boy had a long discipline record for a kindergartener, including eight suspensions from his prior school and a reputation for cursing at pretty much everyone. His teacher still remembers being nervous about how he would impact her classroom, but she welcomed him with a smile and kindly went over the rules, procedures and expectations for her class. On his second day, he challenged one of her directions with, “What are you going to do if I don’t do it?” Day after day, she explained that she was there to help him and believed he could do the work. She praised everything he did that was positive. It was an exhausting few weeks, but he turned into one of the best students that year.

* * *

Although your school days may be behind you, perhaps classroom management shouldn’t be a thing of your past. If you want to experience significant, lasting change in your life, try mapping out your goal as if you were going back to school to achieve it.

Related: Change: Humankind’s Greatest Asset

Start with planning your curriculum. Where do you want to be at the end of your school year? What will you need to do to achieve that? What will you need to read or study? What skills will you need to practice?

Next, create your lesson plans. Teachers break their curriculum down into detailed, day-by-day lesson plans that map out a script for each day. Their lesson plans include a series of activities designed to deliver on the day’s objectives. Each day builds on the previous one, culminating in achieving the final desired result. Fitness goals fit neatly into this framework. Google “marathon training plan,” for example, and you’ll find multiple curriculum options broken down into daily plans for physical training, nutrition, and more. Other goals may require more imagination on your part.

Finally, set your environment. The school environment comes with rules—lots of them. To adopt the benefits of the school year in your adult journey, establish some new rules to live by. Many school rules translate well into the adult world. For example, schools provide a definite start and end time to the learning day and have a strict schedule in between. They typically limit the use of electronic devices and other potential distractions. They insist on a rigorous program of homework and independent study to reinforce the material. Other school rules require some adaptation. For example, you may no longer have a use for colored pencils or graphing calculators, but you likely will benefit from having all of your supplies at the ready at the start of your day.

Get too structured, of course, and you kill the joy. Schools have caught onto this in recent years, to the benefit of today’s students. My youngest son, for example, walked into his second-grade classroom to find he’d been assigned a camp chair instead of a traditional desk and chair. The next day, he had a giant floor pillow. Another day, he had a wobbly stool. This flexible seating gave him and his classmates more control over their own learning environment, a key, new research suggests, to engaging with the material.

* * *

By pairing a robust curriculum with solid classroom management, teachers can perform virtual miracles in a single school year. Kindergarteners who couldn’t write their names will be able to draft their own stories with a beginning, middle, and end. New middle schoolers who could barely open their lockers will be able to complete multi-part assignments on Google Classroom, complete with slide presentation. High school seniors will cross that final bridge into adulthood, heading out into the world with the independence to choose jobs or advanced studies.

What could you accomplish in your own life in the next year? Maybe you can’t devote eight hours a day to your pursuit as if you were a full-time student, but you can still use this time of year to embrace a season of change. Identify your goal and then map out your plan for taking yourself back to school—at least in mindset—to make it happen.

Even if you need to start by eliminating your squeaky chair.