Topley’s Top Ten – February 21, 2019

1.Record Selling of U.S. Stocks and Bonds in December of 2018

Torston SLok

In December foreigners sold a record $91bn in US stocks and bonds, see chart below. Roughly 85% of this amount, or $77bn, was the rest of the world selling US Treasuries. Despite this significant upward pressure on US rates during the stock market rout in December 10-year rates still went from 3.20% in November to 2.60% in early January. This reveals how strong the domestic bid is from pension funds and banks for US Treasuries at the moment, see also the second chart below. For more on the rates outlook see also our latest Fixed Income Weekly here.

2.48% of All Current Outstanding Commercial Debt Comes Due by 2023

Shawn Langlois

3.Fed Funds Showing 0% Chance of Rate Hike in 2019.  Is the Above Chart the Reason?

Fed Funds showing a near 0% chance of more hikes in 2019 – Aside from today’s  minutes at 2pm – his week brings speeches from a handful of Federal Reserve officials including voting members of the monetary policy-setting Federal Open Market Committee, including New York Fed president John Williams, St Louis Fed president James Bullard and vice-chair Richard Clarida.

From Dave Lutz at Jones.

4.Cheap Debt Has Fueled Over Paying On Mergers.

Regrets, Corporate America Has a Few

Fueled partly by cheap credit and shareholder demands, Corporate America has been in a deal-making panic in recent years, driving acquisition prices into the stratosphere. And now the inevitable payback has begun, writes Tara Lachapelle. She warned us it was coming! But nobody listens. And now everybody from Campbell Soup Co. to Verizon Communications Inc. is taking massive writedowns for these big honking deals that aren’t working out so well. Meanwhile, Max Nisen writes CVS Health Inc. is finding it’s not so easy to digest the $68 billion Aetna Inc., fight a regulatory crackdown and, you know, grow profits.

5. Asset Performance Summary YTD.

6.Developed Market Growth Vs. Emerging Markets.


7.Student Loans and Car Loans Up….Credit Cards and Mortgage Loans Down.

8.Amazon Rolling Out 30 Original Movies this Year.

What Amazon Studios Isn’t

Netflix. But it also isn’t New Line or MGM or Lionsgate. It’s in a league of its own—or so Amazon Studios chief Jennifer Salke wants you to think.

After a rough year-and-a-half stretch at Amazon Studios (complete with six flops in a row), Salke went on a press push this month to make her recentering efforts known.

1) Quality over quantity. Salke said Amazon’s (+1.22%) planning to roll out about 30 original movies per year, with budgets ranging from a couple million bucks to $50 million or more.

  • In a not-so-subtle jab, Salke told the NYT, “It’s not about volume and endless scroll.” (Lest we forget Netflix launches some 90 original movies/year.)

2) Pick your lane. Salke said Amazon was “putting too much focus on a narrow prestige lane,” forgoing potentially wallet-fattening crowd pleasers in the process. The future for Amazon Studios now includes awards season favorites—plus “sexy date-night movies,” young adult films, and more.

3) And finally, spend and spend some more. We’ll let this Sundance chart do the talking.


9.Putin to give annual address as popularity slides

Russian President Vladimir Putin is set to deliver his annual state of the nation address with his approval rating at 64 per cent, the lowest in five years. (Photo: AFP/Sergei Chirikov)

MOSCOW: Russian President Vladimir Putin will deliver his annual state of the nation address on Wednesday (Feb 20) as he faces an unprecedented fall in his approval ratings.

It will be the 66-year-old leader’s first address to both houses of parliament since he was elected to a fourth presidential term a year ago, extending his long rule until 2024.

Last year, Putin used the address to unveil a new arsenal of weapons in a nearly two-hour speech that stunned the West and many in Russia.Read more at–11261094

10.The Resilience Paradox: Why We Often Get Resilience Wrong

Resilience is pretty much the holy grail of positive human functioning, but we o

Researchers, managers, consultants, and psychologists all know that resilience is the most important factor not only to mental health, but to performance and success. People who are robust to adversity, difficulty, and stress and persist despite these experiences quickly rise to the top. They are todays best performers and tomorrows leaders. It is also a lack of resilience which is associated with stress leave, absenteeism, poor performance, and ultimately mental illness. Resilience is pretty much the holy grail of positive human functioning.

The big question, then, is how to build resilience. How do everyday people strengthen their capacity to respond well to setbacks, to persist in the face of failure rather than give up, and to cope effectively with stress? This question raises what I refer to as ‘the resilience-paradox’. Resilience is characterized by the ability to maintain a positive mindset and keep stress in check when dealing with difficult experiences. Drawing on this perspective, resilience training programs frequently focus on building people’s capacity to maintain positive thoughts and emotions (e.g., gratitude) and promote strategies designed to minimize stress (e.g., mindfulness). Although important, a focus on positivity and stress reduction alone overlooks a critical aspect of how resilience is built.

From a neurobiological perspective, reducing stress rather than engaging with it productively, does little to promote the capacity to respond effectively to adversity. Even worse, our research shows that placing too much emphasis on the value of remaining positive can lead people to respond poorly to failure and may even contribute to conditions such as depression. This is because messages about the importance of positivity can make people to feel like they are failing to be resilient or successful when they feel down-hearted, anxious, or stressed.

The evidence suggests that resilience does not come from maintaining a Zen-like response to every experience that life throws us – it is born from being in touch with what it feels like to fail, from understanding the pain of loss, and from an intimate insight into the experience of being overwhelmed and out of our depth. Put simply, resilience is developed through discomfort. That means being exposed to experiences that push us or challenge us in a variety of ways.

Why Exposure Is Key

In his seminal research, the world-famous psychologist, Martin Seligman, demonstrated that when animals or humans are exposed to uncontrollable stress they tend to give up, and this response is maintained even when opportunities to escape from that stress are presented to them later. Referring to this response as ‘learned helplessness’, Seligman provided critical insights into the process by which people learn to respond poorly to adversity, and ultimately how mental health issues such as depression unfold. Some years later a lesser known group of researchers ran a different study. They also exposed rats to a single episode of uncontrolled stress and observed the learned helplessness response that Seligman had earlier reported. In one condition, however, they exposed a group of rats to repeated stress (electric shocks and swims in cold water) for several days prior to running the main experiment. What they found was that this group of rats – the ones who had experienced repeated exposure to stress – were less likely to demonstrate the learned helplessness response. Instead, even after facing uncontrollable stress they did not give up so quickly, and when provided with an opportunity to escape they were more likely to do so.

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Researchers have identified that enhanced adrenal functioning underpins this increased capacity to respond well to stress. Exposure to adverse or stressful experiences can literally strengthen the body’s capacity to efficiently release adrenaline in response to stress, and to quickly return to baseline once the stressful event has passed. This is not dissimilar to a highly trained athlete who can efficiently exert energy, but then return to a resting baseline quickly afterwards. Of course, athletes do not develop this capacity by avoiding stress – they actively seek it out through training.

Challenge vs. Threat Thinking

Not all exposure is good. Just think of the many people who become traumatized in response to highly stressful events such as car accidents, war, or even loss. The key is understanding what distinguishes ‘good’ exposure from ‘bad’? When people experience stressful events as threatening, their body tends to release more cortisol. This is not good for health and does not facilitate more effective responding like the efficient release of adrenaline can. Feeling threatened means that we see the demands of the situation as greater than our personal capacities to cope, and it is this imbalance between personal resources and situational demands that can leave people feeling overwhelmed, stressed out and perhaps even traumatized. This is the hallmark of ‘bad’ exposure. In contrast, ‘good’ exposure occurs when people experience stressful events as challenging. That is, they feel that even though the experience requires them to move outside of their comfort zone, they have the resources to cope. It is when people feel challenged that their body builds the kind of increased adrenal capacity referred to above. These experiences also build their confidence in their own abilities, meaning that the next stressful experience is more likely to feel like a challenge than a threat, and the process continues, leading to more resilient responding, increased confidence to seek out challenging experiences in life, and so on.

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So how can people learn to respond to stressful events as more like a challenge than a threat? The key to this is how we understand the event and also how we understand our personal resources. It is also about understanding the critical role of motivation.

Stepping into the Abyss

Exposure therapy is about allowing people to face into their fears – to be exposed to those things that make them feel threatened. This works because being exposed to what we fear (when it is not actually dangerous, but just uncomfortable) tends to be less noxious than the fear of that thing itself. Research shows that this is the same for physically painful experiences – mostly, it is the fear of pain which is more unpleasant than the experience of pain itself.

The best way to overcome fear is to face it head on. This is because fear or anxiety are not only emotions, they are motivations – they motivate us to escape and get away. When we step towards something which is screaming at us to escape, however, it reinforces a different message in our brain. Rather than reinforcing our fears, by acting on them, we are challenging them by responding differently – by approaching them rather than looking to escape.

It is for this reason that, when it comes to dealing with panic attacks, one of the best pieces of advice is to try and have one! If we respond to feelings of panic by approaching those feelings, rather than trying to avoid them, we counteract the emotion at a motivational level. It is perhaps exactly this approach which is desperately needed when rates of Anxiety are increasing globally.

3 Key Principles Required to Promote Challenge Thinking

By adopting a challenge mindset we are not only able to face our fears more effectively, but by doing so we are also providing ourselves with more opportunities to build resilience. We are more likely to step outside of our comfort zones, to tackle new, exciting, but also scary experiences. We are also able to respond to the many obstacles, set-backs, and failures we might face on a day-to-day basis as opportunities for growth, rather than threats to our happiness. Here are three factors that help to promote a challenge mindset when it comes to facing difficult or uncomfortable experiences.

  1. Focus on influence rather than control. Uncomfortable experiences often feel that way because they challenge our ability to be in control. Stepping outside of our comfort zone means facing new risks that we might have little control over. A good strategy is to focus on how we might influence these situations, rather than how we can maintain control. This reduces feelings of helplessness.
  2. Focus on gains rather than losses. Tackling difficult experiences comes with new risks, and beyond losing our comfort zone for a period of time, we are also exposed to the potential for negative outcomes. Importantly, failing or getting it wrong is not only about loss. We also gain a lot from these experiences. Failure provides an important pathway through which we can connect and bond with others. It is also an important aspect of learningand growth.
  3. Build confidence. The best way to build confidence in our capacity to tackle difficult experiences as challenges rather than threats is through experience. The more that we face these experiences, the more confident we are in our own capabilities. It is very difficult to know what we are made of if we don’t test ourselves from time to time