1.Historical Margin Chart.
|Margin Call — Margin Debt Accelerometer: Here’s an interesting chart, basically a bear market warning indicator; the year over year change in US margin debt [note it used to be called NYSE margin debt, but now FINRA publishes a broader set of data]. The basic concept is that when margin debt is contracting on an annual basis it can serve as a bear market warning signal (margin calls and lower risk appetite). Only thing I would add is that in the 2000 & 2008 experiences there was a substantial acceleration in margin debt growth before the contraction signal was triggered, so one might argue the lack of that acceleration weakens the signal this time around…|
2.China Margin Debt Huge Jump 2019.
Someone Betting Big On Trade Deal.
China +5% Overnight.
3.This Is What a Bull Run Looks Like in China’s Stock Market
Turnover explodes on Monday as CSI 300 enters bull market
Margin lending is increasing, though from a low base
A big day’s worth of turnover before the morning’s even out. Every stock with the word “securities” in its name rising by the daily 10 percent limit. And 260 shares up for every one that’s down.
Welcome to a bull market in Chinese equities, where hot-or-cold sentiment is currently approaching a rapid boil. More than $1 trillion has been added to stock values in less than two months, rewarding investors who kept the faith after the worst year for shares in a decade.
The CSI 300 Index got in on the act on Monday, ending the day up more than 20 percent from its Jan. 3 low, its fastest entrance into a bull market in six years. The ChiNext index, a group of mostly smaller technology shares that have been serial laggards, marked its own bull market milestone at the end of last week.
Optimism about a trade truce is helping, but the extreme outperformance of mainland stocks relative to every other global equity gauge — including the S&P 500 Index — speaks to something more specific. A cocktail of regulatory changes, powerful people endorsing a focus on growth and hype about an upcoming new board for technology stocks is adding up to a validation of the market that’s been absent since the 2015 bubble.
“It’s clearly a liquidity-driven rally,” said Shen Zhengyang, a Shanghai-based strategist with Northeast Securities Co. “With so many funds flooding the market all of a sudden, it feels like 2014-2015 again,” he said. Unless regulators step in to put the brakes on, “it’s going to be an upward spiral.”
Investors are getting increasingly active, with shares worth more than 1 trillion yuan ($149 billion) changing hands on the country’s exchanges on Monday. That is the highest since November 2015, and nearly three times the average daily turnover in the past year, according to Bloomberg calculations.
4.German Manufacturing PMI Below 50 …-25% From Highs.
5. VIX Down 9 Weeks in a Row.
6.Charlie Bilello Rules for Investing
Found at Hank Berkowitz LinkedIn https://www.linkedin.com/in/hank-berkowitz-b9926/
7.Housing Not Driving GDP Growth This Time Around.
8.Gasoline Volume Sales and our Changing Culture….Demand for Gasoline -19% Since 1989.
by Jill Mislinski, 2/22/19
Average Daily Volume Sales Per Capita
The next chart adjusts the 12-month MA of sales volume for population growth based on the monthly data for Civilian Non-Institutional Population over age 16 from the Bureau of Labor Statistics, via the St. Louis FRED repository. What we see here is that gasoline sales on a per-capita basis are 5.5% lower than at the end of the Great Recession. The gallons-per-capita series includes the complete EIA data, but since we’re using the 12-month MA, the blue line starts in 1984. We see the double peak in March 1989 (the all-time high) and August 1990. The latest per-capita daily average is 19.1% below the 1989 high but off the -22.2% interim low set in September 2014.
What does this analysis suggest about the state of the economy? From an official standpoint, the Great Recession ended well before the most recent gasoline sales monthly data point. But if we want a simple confirmation that the economy has recovered to full growth, gasoline sales continues to be the wrong place to look.
In addition to improvements in fuel efficiency, declines in gasoline consumption per capita can be attributable in large part to some powerful secular changes in US demographics and culture in general:
- We have an aging population leaving the workforce, which we clearly see in the sustained contraction in the employment-population ratio.
- There is growing trend toward a portable workplace and the ability to work from home.
- Social media has provided powerful alternatives to face-to-face interaction requiring transportation (Internet apps, games, the ubiquitous mobile phone for talk and texting).
- There has been a general trend in young adults to drive less (related to points two and three above). See this report at the U.S. PIRG website for details.
- The US is experiencing accelerating urban population growth, which reduces the per-capita dependence on gasoline.
As we’ve continued to observe in this monthly update, we are living in interesting times.
9.Read of the Day…The Overprotected American Child
Why not let them walk to school alone? Parents and communities are figuring out ways to give their children more independence—and it just may help them to become less anxious, more self-reliant adults
June 1, 2018 10:57 a.m. ET
A few weeks ago I left my 9-year-old daughter home alone for the first time. It did not go as planned.
That’s because I had no plan. My daughter was sick. My husband was out of town. And I needed to head to the drugstore—a five-minute walk away—to get some medicine for her. So I made sure my daughter knew where to find our rarely used landline phone, quizzed her on my cellphone number and instructed her not to open the front door for anyone. Then I left. Twenty minutes later I was back home. Both of us were a bit rattled by the experience—her first time completely alone, with no supervising adult!—but we were fine.
I had been postponing this moment of independence for my daughter for months, held back by worry over the potential catastrophes. But I know that this way of thinking is part of a larger social problem. Many have lamented the fact that children have less independence and autonomy today than they did a few generations ago. Fewer children are walking to school on their own, riding their bicycles around neighborhoods or going on errands for their parents. There have been several high-profile cases of parents actually being charged with neglect for allowing their children to walk or play unsupervised. We’re now seeing a backlash to all this pressure for parental oversight: Earlier this year, the state of Utah enacted a new “free-range” parenting law that redefined neglect to specifically exclude things like letting a child play in a park or walk to a nearby store alone.
Overzealous parenting can do real harm. Psychologists and educators see it as one factor fueling a surge in the number of children and young adults being diagnosed with anxiety disorders. According to a study published this year in the Journal of Developmental & Behavioral Pediatrics, the number of children aged 6 to 17 whose parents said they were currently diagnosed with anxiety grew from 3.5% in 2007 to 4.1% in 2012. And in a 2017 survey of more than 31,000 college students by the American College Health Association, 21.6% reported that they had been diagnosed with or treated for anxiety problems during the previous year. That is up from 10.4% in a 2008 survey.
A big 2007 study, published in Clinical Psychology Review, surveyed the scientific literature on how much parenting influences the development of anxiety in kids. The parenting behavior that had the strongest impact of any kind was “granting autonomy”—defined as “parental encouragement of children’s opinions and choices, acknowledgment of children’s independent perspectives on issues, and solicitation of children’s input on decisions and solutions of problems.” More autonomy was associated with less childhood anxiety. (Genes play an even bigger role, however, in individual differences in anxiety.)
For children who are already anxious, overprotecting them can make it worse. “It reinforces to the child that there is something they should be scared of and the world is a dangerous place and ‘I can’t do that for myself,’ ” says Rebecca Rialon Berry, a clinical psychologist at the NYU Langone Child Study Center.
Annabelle Kim started walking to school without an adult at age 10. Now 15, she babysits her 9-year-old sister.
A lack of autonomy and independence can also stymie the development of self-confidence and may cause children to remain dependent on parents and others to make decisions for them when they become adults, says Jack Levine, a developmental pediatrician in New York. And because children naturally want more independence as they grow, thwarting that desire can cause them to become angry and act out, notes Brad Sachs, a family psychologist in Columbia, Md.
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10.To Improve Your Team, First Work on Yourself
HOWARD GEORGE/GETTY IMAGES
A colleague and I were recently meeting with a CEO and his leadership team, observing them as they discussed how to improve their annual planning process. As the team of ten explored their current process, the conversation got heated. The team had been talking for 45 minutes, but it wasn’t clear who was leading the discussion or what their objectives were. Many comments were off-topic, and they were not getting closer to answers.
We paused the meeting and posed this question: How are you reacting to this conversation and what in you is causing your reaction?
We were met with blank stares. They asked us to repeat the question, seemingly surprised that we had asked them to take responsibility for their reactions. Surely, we had meant to ask them what everyone else was doing wrong in the conversation, right?
Leaders and teammates often tell us that their team is “dysfunctional” (their word, not ours) and ask us to help identify and fix the issue. When we dig deeper and ask them to describe what they are observing in detail, we typically hear that certain team members are problematic and need to change their behavior. We also hear vague statements about “them” (everyone else) not knowing how to operate effectively. As experienced team development practitioners, we know that these are not accurate or helpful assessments of the situation.
Teams are complex systems of individuals with different preferences, skills, experiences, perspectives, and habits. The odds of improving that complex system in a meaningful and sustainable way are higher if every team member — including the leader — learns to master these three foundational capabilities: internal self-awareness, external self-awareness, and personal accountability.
I once asked an executive I was coaching how he was feeling about a challenging situation. He replied, “You mean my emotions? I’m an engineer and I don’t think about emotions.” He then changed the subject.
This executive lacked internal self-awareness.
Internal self-awareness involves understanding your feelings, beliefs, and values — your inner narrative. When we don’t understand ourselves, we are more likely to succumb to the fundamental attribution error of believing that the behaviors of others are the result of negative intent or character (“he was late because he does not care”) and believing that our own behaviors are caused by circumstance (“I was late because of traffic”). Teammates with low internal self-awareness typically see their beliefs and values as “the truth,” as opposed to what is true for them based on their feelings and past experiences. They can fail to recognize that others may have equally valid perspectives.
Let’s look at another example: Manuel, a low internal self-awareness leader, and his colleague, Tara. In a product planning meeting, Tara, a big picture thinker, says, “We need to think of this plan in the context of our broader strategy.” Manuel, an execution-focused leader, has an unconscious reaction of anger and frustration. He would rather focus on the detailed plan and the execution. But rather than recognizing his different thinking style as the cause of his discomfort and the root of his belief that strategy is unimportant, he concludes privately that Tara doesn’t understand the situation, is annoying, and is not the right person for this project. He later tells another colleague she should be taken off the team.
This is a loss for everyone. Tara is misunderstood, devalued, and possibly dismissed. Manuel doesn’t broaden his perspective or learn how to operate with people who think differently than he does.
The good news is that internal self-awareness can be learned. To start, you — as a leader of the team or a teammate — can pause, reflect, and consider your responses to these questions when you find yourself in challenging or emotionally-charged scenarios.
- What emotions am I experiencing?
- What am I assuming about another person or the situation?
- What are the facts vs. my interpretations?
- What are my core values, and how might they be impacting my reactions?
If you take the time to consider your responses and resist the impulse to rush to an answer, you can learn a great deal about yourself. As William Deresiewicz, author of Solitude and Leadership, said in an address at West Point, “[The] first thought is never [the] best thought.”
External self-awareness involves understanding how our words and actions impact others. Most of the leaders and teammates we work with have no idea how their behaviors are impacting their colleagues. As a result, it’s difficult for them to recognize and leverage the strengths that make them a productive teammate, as well as identify and correct behaviors that negatively impact the team. Without this knowledge, they can’t improve.
One way to start building external self-awareness is to observe others’ reactions during discussions. Did someone raise their voice? Stop talking? Gesture? Sit back from the table? Smile? You can collect some valuable information this way. You should also be mindful of the fact that you will reach some inaccurate conclusions. In these situations, remember that you are interpreting why colleagues react the way they do, and those interpretations will be influenced by your personal beliefs and experiences. Paying attention to your internal self-awareness and considering how you reached your initial conclusions will help.
A more direct approach is to ask teammates for specific, straightforward feedback:
- What am I doing in team meetings that is helpful?
- What am I doing that is not helpful?
- If you could change one part of how I interact with the team, what would it be?
This may feel risky and uncomfortable, but it’s the only way you can get accurate data about the impact of your words and actions.
In terms of timing, you should carefully assess whether it is additive to the discussion at hand to ask for feedback in the moment, or whether it is better to ask later. For example, in a one-on-one conversation with a trusted colleague, it’s probably OK to pause and ask. However, in a big team meeting, pausing the conversation to get personal feedback can be disruptive to what your team is trying to accomplish.
When we think of accountability, we typically think of holding others accountable. But the most effective leaders and teammates are more focused on holding themselves accountable.
Like self-awareness, this sounds easy, though it rarely is. When confronted with a challenge or discomfort, many of us have established unhealthy patterns: blaming or criticizing others, defending ourselves, feigning confusion, or avoiding the issue altogether.
If a team is not working well together, it’s highly likely that every team member is contributing to the difficulty in some way, and each of them could be taking personal accountability to make the team more effective.
To be a personally accountable leader or teammate, you need to take these steps:
- Recognize when there is a problem. Sometimes this is the hardest part because we’d rather look away or talk about how busy we are instead. Resist the urge to do so.
- Accept that you are part of the problem. You are absolutely contributing to the situation.
- Take personal responsibility for solving the problem.
- Stick with it until the problem is completely solved.
Going back to the example of Manuel — if he were practicing personal accountability, he would have first recognized that he had some conflict with Tara that was impacting the team’s ability to create a solid plan. He would have then had the mindset to accept that he was contributing to the conflict, committed to working on a more productive relationship with Tara, and avoided the temptation to jump to conclusions and talk behind her back.
A small shift in mindset will directly impact behaviors and can have a significant positive impact on an entire team.
In most teams, a typical response to frustration is “my teammate is annoying.” But when an effective leader or teammate becomes frustrated, she will put the above tips into practice instead:
- Explore her reactions by considering her emotions, beliefs and values, and asking herself what in her is causing this reaction (internal self-awareness).
- Consider the impact she may be having on others by observation or inquiry (external self-awareness).
- Assess how she is contributing to the situation and make a conscious choice about how to react to improve the team’s outcomes (personal accountability).
Most teams we work with learn to operate more effectively by building and strengthening these three capabilities over time. Changing how we process information and respond requires not just learning these new skills, but also demonstrating them long enough to form new habits. Effective teammates believe that, sometimes, you have to go slow to go fast. They invest the time and energy needed to build these foundational skills, so they can be better at tackling the difficult business opportunities and challenges that they face.