Topley’s Top Ten – December 20, 2019

1.Share Buybacks Keep Humming….$770B Q3

Four Banks & Three Tech Companies Blow $56 Billion in Q3 to Prop up Their Own Shares

by Wolf Richter • Dec 18, 2019 • 109 Comments

2.Venture Capital Stats.

3.Developing Nations Sell a Record Number of High Yield Bonds….Double 5 Years Ago


Companies in developing nations sold a record $118 billion of high-yield dollar bonds this year, and are likely to keep up a fast pace in 2020.

The total has more than doubled from five years earlier, according to Dealogic data. The figures cover debt in dollars with subinvestment grade credit ratings, or no rating, and run to Dec. 18. They don’t include bonds sold by governments.

Emerging-Market Junk Bonds Sell at Record Pace

Investors gobble up dollar debt sold by companies in developing nations

4.An 2019 IPO Pricing Retrospective

It is estimated that nearly 200 companies will go public this year, an increase of about 5% over last year’s 190 IPOs, but still well below the 547 companies that went public in 1999. The first half of the year was a good one for investors in these IPOs, but investors have soured on these companies in the last few months. One way to measure the performance of these young companies in the after market is to look at how the Renaissance IPO ETF, a fund that tracks larger initial public offerings and weights them based upon free float, has done over the course of the year:

Since the fund tracks IPOs for 500 trading days after the listing date, it is not quite a clean measure of this year’s IPOs, but it is a good proxy. Notwithstanding all of the negative press you may have read about IPOs in the last few weeks, and third quarter damage, the Renaissance ETF IPO has outperformed the market over the course of this year.

To take a closer look at a subset of these IPOs, I focused on seven of the offerings this year – Uber, Lyft, Pinterest, Slack, Levi Strauss, Peloton and Beyond Meat – and looked the performance of each of these stocks since the opening trade on the offering date:

To compare the performance of these offerings, I standardized performance by looking at how much $100 invested in each stock at the open price on the first trading day would have done, in periods ranging from a day to the year to date:

Musings on the Market

5.Inflation Expectations Still Nowhere.

6.Home Buyers Lower Credit Scores and FHA Borrowers Younger Age Group….Millennials Entering Housing Market.

Ned Davis Research

7.More Home Buying Data From Torsten Slok

8.The 2010s changed how you shop for homes. Will the 2020s change the way you buy them?

Real estate portals like Zillow and Redfin transformed the role of the realtor

By Jeff Andrews  Dec 9, 2019, 8:00am EST

This story is part of a group of stories called

A look at the best (and worst) of the 2010s.

If you were shopping for a home at the beginning of the 2010s, the experience most likely revolved around one person: the realtor.

The realtor is who you contacted to initiate the process. They informed you of current market conditions and gave you a sampling of what’s available on the local multiple listing service. They also likely referred you to a mortgage broker and title insurer.

But if you’re shopping for a home today, your relationship with the realtor is dramatically different. Instead of going to them first, you’ll browse listings on Zillow, Redfin, or any number of real estate web portals. The realtor you chose will likely have a formal relationship with one of those portals instead of with a standalone real estate brokerage firm,and that realtor will walk you through the process as curated by the portal.

In short, the realtor’s role in the 2010s changed from gatekeeper of the experience to trusted adviser who can guide buyers throughthe glut of information that’s now moved online.

“There is too much information and a lot of information is out of context,” says Jonathan Miller of Miller Samuel, an appraisal and real estate consulting firm. “[The realtor’s] role has morphed from ‘Here’s the information’ to ‘Here’s the right information.’ First of all, that’s just a basic shift, but it’s also a big shift. Their role is really as a curator now.”

While every decade sees advances in technology that change the way people live, the 2010s saw more than their fair share of the proverbial tech disruption. Smartphones were only a few years old in 2010, and the depression that followed the financial crisis in 2008 slowed the pace at which they saturated the market.

Over the course of the 2010s, smartphones and mobile apps transformed a number of industries into on-demand services. Uber and Lyft bring cabs to people where and when they want them. Seamless does the same with food. Streaming services do the same with movies and TV shows. Amazon delivers virtually anything to your door in as little time as a day.

But advances in technology have been slow to change the real estate transaction, and the changes that have occurred have been incremental instead of transformative. Zillow, Redfin, and Trulia launched in the mid-2000s, but were essentially real estate search engines going into the 2010s.

Fast-forward to today, and those companies have becomefully formed listings platforms with a number of other related services. Big data and machine learning eventually led Zillow to launch the Zestimate, which allows people to have an idea of what their homes are worth with the click of a button. Mobile apps give you a map of available homes for sale in a neighborhood. Internet of things (IoT) technology gives people access to a home on the market without needing a realtor or homeowner to let you in, and virtual reality lets you tour a home from the comfort of your couch.

“Think about the verbs—I want to search, I want to find, I want to browse—that has dramatically changed [over the last 10 years],” said Zillow president Jeremy Wacksman. “I want to buy, I want to sell, I want to finance—that’s really not much different from what it was 20 years ago.”

Today, the real estate transaction after the shopping stage is still largely done through paperwork offline and often requires resubmission of the same information to multiple parties: mortgage lender, appraiser, home insurer, title insurer. It’s also still a huge headache for both the buyer and the seller, as they have to line up move-in and move-out dates, preferably in a way that doesn’t require temporary housing. And the transaction can fall apart at any moment if one party backs out or is denied financing.

But there’s little chance this process will be the same in 2030 as it is today. Venture capital funding has poured into the real estate technology space hoping to solve the seemingly endless pain points in the process of buying and selling homes, and that funding has launched numerous startups.

The most high-profile startups are the so-called “iBuyers.” Pioneered by Opendoor, iBuyers buy your house for an algorithmically determined “fair market price.” The concept caught on enough that existing real estate companies like Zillow, Redfin, Keller Williams, and othersfelt enough pressure to launch their own iBuyer programs, with Zillow plunging most aggressively into the space.

Selling to an iBuyer solves a few different pain points. First, it allows the seller to access the equity built up in their current house so they can use it to buy their next house. Second, you can choose your move-out date to align with your move-in date without worrying about the move-out date changing because the buyer is backing out. Third, you don’t have to show the house to potential buyers or clean the place after moving out; the iBuyer does that for you after you leave, in addition to making basic repairs before selling the house on the open market.

The price of this convenience is a slightly higher transaction fee—roughly 7.5 percent, depending on the iBuyer, compared to 6 percent for a traditional broker—and it’s possible you’d get less for the house than you would if you sold it on the open market, although a recent independent study concluded that the differences between selling to an iBuyer and selling through a broker are minor.

While the iBuying concept can make things easier, it’s likely a means to end, not the end itself. Zillow and Redfin have both said they are working toward the goal of being a one-stop shop for buying and selling homes, where you sell your house to one of them and are then referred to their housing stock for sale, mortgage division, and title insurance. This has prompted both companies to add a mortgage division, title insurance, and other related ancillary services to their businesses. Opendoor has also taken steps in that direction.

“I just think that the days of the standalone real estate brokerage are over,” said Redfin CEO Glenn Kelman. “There’s no way that over the next 18 months there won’t be consolidation in the industry. Every player has a winner-take-all thesis, where two companies enter and one company leaves.”

It’s less clear what exactly the process will look like after the industry is done tinkering with different ideas.

It’s also an open question whether these companies can create a sustainable business model around these services. IBuying is a business that requires a lot of capital upfront but thus far produces razor thin margins. Zillow revealed on an earnings call this year that it was making just 0.6 percent per house flip.

Given the business has so little room for error and is not yet profitable, the operations of some iBuyers are being subsidized by venture capital. If access to venture capital funds dries up, will these companies even be able to exist?

And it’s also an open question how much demand there really is for these services. While nobody would say they prefer filing the same paperwork multiple times over a streamlined digital submission process, many in the industry believe iBuying has earned more headlines than it really deserves. In Phoenix, where iBuying launched in the middle of the decade, iBuyer transactions account for just 6 percent of the market.

Predictions that realtors would become obsolete have permeated the industry for some time, but their continued existence suggests that buyers and sellers like having someone who can take the time to help them make what may be the most important financial decision of their lives. Do people really want to make this decision by clicking a few buttons on the internet?

“It’s like if you go into a really nice five-star restaurant and order a meal and it comes out of the kitchen instantly,” said real estate technology consultant Mike DelPrete. “You’re going to have some questions. I think people want it to be hard because it should be. It’s a big transaction. It takes time.”

Found at Abnormal Returns Blog

9. Angry French Pensioners Offer the World a Warning

Andreas Kluth–Bloomberg•December 20, 2019

(Bloomberg Opinion) — When it comes to retirement, France is like other countries, only more so: Everything about its system is untenable. It’s untenable that it has 42 separate public pension schemes — one for train drivers, another for opera singers, and so on. It’s untenable that the French think they have a God-given right to retire at 62 or even earlier. And it’s untenable that they tend to riot in the streets every time the government tries to confront these realities.

If they chose a slightly different perspective, the French might actually have reason to celebrate. After all, like people across almost the whole world, they can expect to live longer. The only problem is that unless they also work longer, this means they’ll need to draw their pensions for more years. Moreover, because of lower fertility in recent generations, fewer young people will be financing these pensions.

This global retirement crisis is a slow-ticking time bomb, not as dangerous as climate change but almost as consequential for financial markets, living standards and much else. This year, almost one in 10 people in the world will retire, according to the United Nations; by 2070, it’ll be about one in five.

The crisis isn’t evenly distributed. Africa, for once, has less of a problem, because of its relative youth. In North America, the problem is big. In Asia and Europe, it’s huge. The world’s “oldest” country (demographically) is Japan, and one of the fastest-aging is South Korea. The oldest continent is Europe, and countries such as Greece, Poland, Portugal, Slovakia, Slovenia and Spain are among those aging fastest.

10.5 Ways to Maximize Your Time, Every Single Day

When you woke up today, how did you feel today was going to go?By Benjamin Hardy, Ph.D.Contributor,


Today can be as great as you want it to be.

Your fate isn’t set. You get to decide how much of yourself you’re going to put into today.

Rather than saying, “Well, we’ll see what happens,” you must powerfully state, “Today, I’m going to make it happen!”

When you go into the gym, you get to decide how hard you’re going to work out. But one thing is for certain, you’ll feel far better if you walk out 30-60 minutes later having given it everything you’ve got.

The same goes for your day.

It’s actually far more exhausting to not work than it is to work. It takes far more energy sitting with internal conflict and justification than it does to just get to work. Said Steven Pressfield, “Most of us have two lives: the life we live and the un-lived life within us. Between the two stands resistance.”

If your life feels out-of-whack or out-of-balance, you’re likely avoiding the very thing you should be doing. It’s only in doing that thing that you’ll regain balance and peace. Avoidance leads to busyness and distraction.

The Invisible Difference When You Fully Live

When I give everything I’ve got at work, I’m a different person. I’m happier. The world is a more beautiful and abundant place. Other people smile at me as I walk past them and I have no idea why.


On days I’ve actually done what I intended to do, it seems like more people look me in the eyes and smile at me as I walk past them. And I’m certain I’m not initiating those smiles. Yet when I receive one of those smiles, I look at that person for a few moments after they’ve looked away from me. I feel love toward them and wish them happiness in their lives.

Moreover, on days I’ve actually lived my purpose, I leave my work more energized than before I started. When I walk through my front door, my kids often run up and hug me, and ask me to play with them. As I look at them in such moments, I see only perfection. Love fills my heart and I feel an overwhelming sense of gratitude and humility for my life. To adapt a quote from Goethe, “The way you see [a child] is the way you treat them and the way you treat them is [who] they [will] become.”

Conversely, on days I’ve spent my working time in distraction and self-sabotage, I come home feeling like a fraud. My family still loves me all the same. Yet, it’s so much harder for me to give them the attention and love they deserve and need. On wasted and un-lived days, I end up sucking more energy from those around me than I emit. I see only the problems in my children and am highly irritable.

You can’t see the energy field around you, but it’s there.

You Can Make the Shift

I know what it feels like being stuck and without momentum.

You can feel absolutely powerless to change your life and circumstances.

But that’s a complete lie.

It’s garbage.

I know it feels more real than anything else.

But it’s not.

Feeling guilty about all the time you’ve wasted won’t help.

If you make a few tweaks to your approach, you’ll be surprised at how quickly your perception of the world and yourself will change. As your perception changes, everything around you will change.

Start small.

Give one or two of these a try and watch what happens:

1. Have a weekly reflection and planning session

“The game is won or lost before it begins.” — John Wooden

One day per week (my preference is Sunday), take 10-30 minutes reflecting on your past six days. How did they go?

Try asking yourself the following questions:

  • Who did I not meet this week that I should have?
  • What did I not do?
  • What did I miss?
  • What should I tighten up?

Getting down on yourself isn’t the purpose. Rather, being aware of how you’re doing is the purpose. Awareness facilitates empowerment to change.

After assessing your previous week, make better plans for the next six days. Then, in six more days, do it again.

This need not take long, but it can dramatically improve the quality of your weeks and the days within those weeks.

2. At the end of each day, make your game plan for tomorrow

“Never begin the day until it is finished on paper.” — Jim Rohn

Having a plan eliminates the burden of choice.

If you wake up without a plan, you will undoubtedly bounce from thing-to-thing without really doing anything. You won’t be focused or purposeful.

It’s so much more powerful to wake up with a purpose. To get up and go. To be intrinsically pulled out of your bed rather than clinging desperately to your tired body, without a clear reason to get up.

Taking just a minute or two at the end of your day to make a game plan for the next day will provide you the needed structure to purposefully move.

The same is true of any creative task. Taking just 5 minutes to create an outline for a book, and article, and agenda, or whatever the task is can save you hours.

3. Focus on today, not tomorrow

“Take therefore no thought for the morrow: for the morrow shall take thought for the things of itself.” — Matthew 6:34

During your day, don’t worry about anything else. Follow your plan. Crush it. Live today to the fullest and be the person you intend to be. After your day is complete, take a minute or two to outline your next day. Then, forgot about it until tomorrow morning.

4. Three month energy cycles

When it comes to your future, you have three vantage points.

  • Your vision (your WHY) = 10-25 years’ out
  • Your long-term goals (AKA your wild guess) = 36 months’ out
  • Your actual goals (AKA your realistic game plan) = the next 90 days

In the 20th century, it was a solid practice to have five year goals. Things were more stable back then. Today, things are changing too abruptly to realistically determine where you’ll be in five years.

Framing your goals in three month increments gives you a clear and realisticfuture to sprint toward. Of course, these goals are based on your longer-term goals. However, your 3-month goal cycles are your main focus.

Just like your weekly planning sessions, every three months spend a few hours or even a full day reflecting on your previous three months. Make any adjustments you need and make better plans for the next three months.

5. Organize yourself

“Happiness lies in the cultivation of the garden.” — Voltaire

Your life is a garden, cultivate it.

Organize yourself. Clean out the weeds. It doesn’t matter how long it takes.The very act of cultivating your garden will enliven you. You’ll never be finished. But every day, week, and year, you can make your garden a little more beautiful and fruitful.

Clean up your finances.

Clean up how you use your time.

Clean up your relationships.


Just a little bit every day. Once you start to get things organized, the soil of your life will be better suited for what you plant in it.


When you woke up today, how did you feel today was going to go?

I challenge you to wake up tomorrow with this feeling, “Today can be as great as I want it to be.”

Having that feeling won’t come out of nowhere. You’ll need to set yourself up to have that feeling. However, setting yourself up isn’t all that hard. Itmay be as simple as spending 2 minutes the night before writing a plan. It may be spending 15 minutes the Sunday before making a plan.

Whatever it is, you have a reason to live your life to the fullest. You may not know exactly what that reason is, but you’ll find it once you get moving. More than likely, you’ll realize that everything in your life is actually far more beautiful that you could previously perceive.

From this level of joy and purpose, you’ll be empowered to consciously create a future you are worthy of.


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