"The More Things Change' - A Guest Blog

For many years while managing the mortgage backed bond trading desk for Goldman Sachs I had the pleasure of working with today's guest blogger - Frank Pallotta. Frank covered some of the countries largest mortgage bankers as well as Fannie Mae. Few people know more about the mortgage origination business than Frank. Frank has recently founded his own firm, Steel Curtain Capital Group, which advises clients on the sales and purchases of distressed assets. Thanks to Frank for his insightful commentary on the crisis in the credit markets.

"Few things in life are as certain as death and taxes; except maybe the occasional catastrophic dislocation in the financial markets. But one thing is certain - financial markets are cyclical. What goes up will eventually come down. And as recent events have shown, if they go up too far or too fast, they will come down faster and harder than you can possibly imagine. Since the early eighties, we’ve heard about turmoil in the capital markets with names like: The S&L scandal, the RTC crisis, the stock market crash (both of them), the “dot.com bubble”, the real estate crisis, Enron, the Russian Debt Crisis, LTCB, “Orange County” and the list goes on (and on). Most, of these “dislocations” were a direct result of, or exacerbated by Wall Street’s desire to trade through, around, or in front of these anomalies.

The latest crisis to reach the top of the charts (as the equivalent of rock and roll’s “Stairway to Heaven”), is what’s come to be known as “The Subprime Crisis”. The reality is that labeling this a subprime issue is about as absurd as calling baseball’s steroid scandal the “Barry Bonds scandal”. Don’t confuse the symptom, for the disease. This crisis goes way beyond subprime. For starters, the finger of blame can point to the borrower who took out a mortgage he knew he could not afford, to the mortgage company who looked the other way during the application process, to the Investment Bank who packaged this “stuff” to the rating agency who provided a stop-loss level of 4% to AAA, to the CMO buyer who said “55 to swaps sounds cheap”.

The good and the bad news is that no one is doing anything stupid – for now. It’s probably a good thing that virtually all non-standard mortgage origination has come to a halt while the markets attempt to readjust. The reality however, is that this asset class (residential housing) will not go away. The economy will eventually stagger to its feet, and blood will start to flow again through the Global Residential cadaver again. Another certainty is that Subprime and Alt-A loans will return to their rightful place in the financial system. Subprime and Alt-A loans existed long before this current crisis began. Subprime loans will return again, and will carry a rate commensurate with the borrower’s ability to repay that loan. Alt-A borrowers will again come to understand that “Alternative A” truly means alternative documentation, and not an alternative “borrower”. And that both of these loan types will return to their past risk/reward profile. Lower documentation and credit scores must be offset by more equity. Less equity will be offset with substantial, verified reserves, and any mortgage application with the word “stated” in it will be relegated to bird cage liner, kindling and toilet paper. Investors will also have to do a bit more homework (on their own this time) and not rely solely on Wall Street stress analysis, legal opinions and rating agency models.

The bursting of the “Technology Bubble” didn’t destroy the technology sector. As such, the “US Housing Bubble” will not destroy the US housing market ebay, Google, and Yahoo proved that technology wasn’t dead, just the irrational exuberance surrounding that sector. The Global residential markets will go through the same transformation. Most loans types (NINA, and SIVA, POA), and their originators will go the way of World.com, theGlobe.com, and Pets.com. While others will emerge as sound safe and sane."

The Challenges Continue

The first half of the year was obviously not a good one for the financial markets, and my prediction is that the second half is not going to be much better.  There is simply just way too much uncertainty around a large number of factors.  Here is a short list:

-      -- The impact of  the huge rise in commodity prices globally – i.e. inflation.  I have read a number of articles recently that challenge how we measure inflation and most of the thoughtful ones seem to indicate that such measures are way underestimating it.  My personal experience would have to agree.  A quick example.  We spent the summers in Kelowna BC Canada where my family runs an orchard producing approximately 500,000 pounds of fruit a year.  My father came in the other day fuming because the price of a bottle of chemicals he needs to spray the fruit went up from $600 last year to $1,000 this year.  A bag of fertilizer, $35 last year, $60 this year.  Even if oil settles down just north of $100, the impact is just beginning to work it’s way past the fuel pumps and in to the system. 

-        - The financial chaos.  More banks and other financial institutions will go under and the effect of that is hard to measure but it will be costly.  Moreover the write-offs will continue as delinquencies are still relatively low and on the rise.  Look at Wachovia’s reported earnings as a hint.  Fannie Mae and Freddie Mac? Personally I don’t do naked short selling but if I were too anyone who has spoken to me on this topic would know that there two stocks have been on the top of that list for years.  Their business model went awry a long time ago right under EVERYONE’s noses.  A publically traded company, which invests in mortgages to the advantage of everyone else because they were implicitly backed by the triple A rating of the US gov’t?  People responsible will, years from now, or maybe tomorrow, be asking themselves, what the heck were we thinking?  IndyMac, Countrywide  blah blah…. All business models that evolved in to banking on the stupidity of others and the idea that the party would never end, but if it did, the people again responsible would be long gone or somehow would have figured out a way to reverse the trade. 

-        - The housing collapse.  Again not over.  There is still a lot of adjustment that has to take place and all this takes time.  Foreclosures are on the rise which will continue to cause massive dislocation.

-        - Global growth.  Just a lot of uncertainty and huge differences across countries.

-        - Geopolitical risk.  I am going to ask  my husband to do a guest blog on this topic. 

-        - Election year in the US and more generally a big risk that a lot of not well thought out regulatory changes happen in response to all the problems that are out there.

This list is not exhaustive of course, and each bullet point is in itself extremely dense.  The point is again is that there is a lot of uncertainly which creates a whole lot of possible outcomes.  From an investment perspective that means much higher risk, and for that, investors should demand a lot of extra return.

 

Fannie and Freddie

I woke up at 6 am to pack up for a trip to Lake Louise (we are currently in BC) and my husband ran upstairs yelling, "Honey, you had the call." He predicted years ago that GM was going to go in to bankruptcy, and I had basically the same call for these Fannie and Freddie. As a mortgage backed bond trader I understood their business, and though a great business when times were good, there was simply no way to hedge the risks if the housing market were to turn, and turn it did. A government bailout is inevitable. I have not yet called around to see where mortgages are trading, or agency debt, or or..... but as I have said many times over on this blog, this is not over.

Happy July 4th!

This is the first July 4th I have celebrated in the United States for a long time. I forgot what a big holiday it is in this country. Although I live here and have for twenty years, I am a Canadian, and we are fortunate, as a family, to travel to Canada for the summer. We are leaving later this year as we just returned from a trip overseas and needed to touch down to regroup. As I turned on the television this morning, a man from India was being asked if he knew what holiday America was celebrating today, and he answered confidently, “Independence Day.” Probed further he was asked what that really meant. Equally confidently he responded, “Freedom.”

Freedom is a big word. One of the biggest words there is. Perhaps the most likely definition involves the concept of someone acting “according to his or her own will”, but the concept is so much bigger. It applies to both the individual and the collective. Freedom is good, but it is not all good. Without a rule of law or without a moral compass freedom enables horrible atrocities. Freedom without opportunity, specifically economic opportunity, may too result in horrible outcomes. Constrained freedom, enabled freedom, freedom for the greater good is what really should make us proud.

Does America represent the best that FREEDOM has to offer? I would say it comes pretty close. Certainly there are other countries that are up there with us, including my home country, but America is pretty, darn amazing.

Enjoy your July 4th holiday and celebrate with family, friends, neighbors and even strangers, the best that is America.

Arriving at JFK

The lack of entries the past two weeks was because I was on a family trip to France! Our family of four met up with my sister's family of four in Provence for a week and it was a truly a great vacation. We rented a house in the small town of Pernes De La Fontaines, and explored the local areas. ( more on what to see in Provence in an upcoming entry) We flew in and out of NICE and what was so striking was the arrival back in to the US after the 8 hour flight home. We got off the plane and through customs in record time but then there was the wait for the bags. In a tiny area, with low ceilings and dingy walls we waited, for over an hour for our bags to arrive. There was no one around to ask what was going on, and frankly no one seemed to care. Kids were crying, exhausted parents were pacing, and people were cursing in multiple languages. Just as an observation came in to my thinking, one of the disgruntled passengers said it out loud - "This is worse then any third world country I have been to, and I have been to many." He went on to say that "why is is that things in America, every day things seems to be getting so much worse here, while in most every place else I go they seem to get getting better?" It seemed so sad to me that for the many people arriving to America for the first time, from Nice, from Kiev, from Berlin.... this is what they see first. They see a place worn out, crowed, congested, with no one around to offer them assistance or seemingly even care.

Well our bags finally, finally arrived and we crawled on to the Long Island Expressway for the long drive out to the far reaches of Long Island to pick up our dog Sunnie who was on her own vacation with my in-laws. Hours later once the traffic was behind us, it did feel very good to be home.

Sexism in the Media

I was just sent an amazing YouTube Video produced by the Womens Media Center , an organization I am proud to support and I encourage you all to do the same. The purpose is to highlight the unbelieveable sexist comments made over the past few months regarding Hilary Clinton. Whether or not you like or supported Hilary, this video is worth a view. This is just not right. Chris Matthews get's my award as the guy I would most like to see pelted with rotten tomatoes . I am not sure he is married, but if he is, someone tell his wife to watch this video.

"If you can figure out your suitcase, you can figure out your life."

Today's FT contained two great articles that are worth a read. The first is an interview with Diane von Furstenberg from which I pulled the quote above. I like her clothing and I like the woman behind them. Her company has a 'female empowerment agenda' and so does this BLOG! He confidently defines herself as "a woman, a mother, a designer", acknowledging the multiple roles she plays and giving them equal ground. Thanks to Vanessa Friedman for this great piece.

Flip the page and you will find another article worth reading on Kavita Ramdas, the head of the Global Fund for Women. Scroll down to find a write-up on Kavita.

INFLATION!

Thanks once again to John Mauldin for bringing to my attention another must read commentary, this one by Bill Gross of Pimco. I have been wanting to write about my feelings on how understated US inflation numbers are, but now I don't have to. Thank you Bill! I suggest both these regular commentaries for great insight on financial topics.

“Do what you can, with what you have, where you are.”

Last week I sat in a beautiful drawing room in a lovely home in Vancouver, B.C. listening to Kathy LeMay, President and CEO of Raising Change, share her story and instruct us to "Do what we can, with what we have, where we are." Kathy is a high impact fund raising consultant and philanthropic advisor. Her mission is to help people create their own generosity plans, or in other words, how they are going to use their time, treasure and talent to make a difference in the world.

There were twenty fabulous women present to launch a new women’s network associated with the Sauder School of Business at the University of British Columbia, my alma mater. Of no surprise to those of you who know me, I was one of the organizers!

I met Kathy through a dear friend a few years ago, and Kathy has been helping to guide my giving ever since. Although I had a financial plan, a retirement plan, an estate plan and even a health plan, it did not really occur to me that I needed a giving plan. That is, until I met Kathy. Now that plan is the framework I use to not only guide how much money I give, but what non-profit boards I choose to serve on, and what service activities I engage in. The essence of the plan is to match your resources with your passions in the most effective way possible. When you think about it, it makes sense, but do we do it? Personally I tend to say yes too often, spreading myself too thin, and I sometimes end up feeling stressed out and dissatisfied with my ‘volunteer work’. Now when I am asked, I apply that opportunity to my framework, and the right decision generally flows out of it.

So what are the key elements of this plan? First and foremost you need to get in touch with what you are passionate about. Ask yourself what in the world you really want to change? What issues do you care the most about? Once you have identified those passion areas, do some homework. Look for organizations whose missions are aligned with those passions. Next think about what you have to give – take an inventory. Do you have time? Money? Skills that a non-profit need? Or all three? Break those all down and then connect them, intentionally, back to those organizations. Intentionally.

There is certainly a lot more to it, so check out Kathy’s web-site for tools to get you started.

A giving plan is something all people can do, not just the people over there. You know those people, the people with lots of money and lots of time on their hands. No, a generosity plan is for everyone, you, me, young, old, and it is an especially great concept to introduce to your children which my husband and I have been doing this year.

Thank you Kathy for being such an amazing influence in my life and for helping me to become the "change I want to see in the world."

Thank You Hilary

I recieved this letter in my inbox this morning from Illana Goldman, President of the Women's Campaign Forum, regarding Hilary Clinton and I thought it was well worth sharing.

"I say this to you almost daily, but since it's normally to you on the TV screen, I thought I should find a way of saying it where you might actually receive the message: Thank you.

Thank you for what you have done. For your sheer tenacity, strength, and stick-to-itiveness. Thank you for working so hard every day when you must have been exhausted. For showing us what leadership looks like: doing something well, with grace, in good times and bad. Most of all, I thank you for not quitting.
Your many supporters will tell you what your race means to them and history will write what it means to the world, but it also means so much to me and to the little world I live in. I thank you on behalf of the women who have been so special in my life:

For my daughter - who is, as of yet, just an idea in my mind. But I imagine her one day reading the story of this historic campaign. I am so grateful that the story she will read will be of a complete campaign, with the biggest numbers possible - states, votes, and delegates. That story will show that our first woman presidential contender was truly competitive - nearly won competitive - and show a little girl her own vast possibilities in this country. Thank you for giving her a history worth reading.

For my mother - who is one of those women who work tirelessly to support her family, worries over rising healthcare costs and frets that her grandchildren may not have social security. She's always been passionately interested in politics, but never before found a politician who she felt saw and understood her. She'll be 65 next year and she wrote the first political check of her life to you. Thank you for validating the day-to-day concerns that she faces.

For my grandmother - who was, as it was noted at her memorial, "a woman ahead of her time." I think of her every time I see one of your senior women supporters who were born before women first got the vote and were out on the streets filled with hope that they would inaugurate one in their lifetimes. Thank you for showing them that their efforts to make women loud and proud actors in American politics created real change.

For my best friend - who would listen to me talk about just about anything in the world for hours - except politics - until you started to run. Little by little, day by day, she became more engaged in your campaign and what it meant to the country and our place in the world. She started out reading your emails and went on to lobbying her husband and friends to change their votes. Thank you for awakening an incredible woman to her role in the political process.

For my former junior staffer- who did not necessarily believe that sexism was still an issue alive and well today. She watched pundit after pundit behave in ways that even she could not deny were ... crude. Then she saw it pass as kind of acceptable. And then she saw it happen again and again. Finally, she took up her pen and now Chris Matthews and the MSNBC brass know her name .... well. Thank you for reminding her of how much work we all still have to do.

For me - who has been, at times, described as direct, forward, forceful, pushy and a few other choice adjectives. Thank you for helping make the world a little safer for aggressive, ambitious women. Because isn't aggressive just one way of saying "she gets things done" and isn't ambition just another word for "dream?" Thank you for pushing for my dream - and that of so many others - to elect a phenomenally talented and capable woman to lead our country and change our world.

As you promised from the outset, you have, and will continue to, make history.

Thank you, for all us. "

Sincerely,
Ilana Goldman
President, Women's Campaign Forum

Girls Night Out ( GNOs )

I am a big fan of GNOs. Big fan. Always have been and always will be. This past Sunday I gathered a group of eight gal pals and we took in the major chick flick of the summer, that’s right, Sex In The City. I liked the TV show mainly for one reason, Sisterhood! I liked the movie for the same reason. Having not read that much about the movie over the weekend, I thought I was being really cool and original planning for a group of us to go to an early dinner and the show on Sunday night. Well it turns out I was not the only one with such an idea. The theater was packed and we ended up in the second row. We laughed, we cried, and what made the movie so much fun was we were sisters, watching sisters. I hope that the success of this film at the box office will send a clear signal to the powers that be in Movieland. Make more movies for women, with women, about women. Build it, and they will come. (that's right this message is for you Bonnie )

The Athena Factor

First the good news, 47% of the qualified talent in the areas of science, engineering and technology are women. Now the bad news, 52% of them will leave full-time jobs in the SET sectors before they are 40. So says a brand new report by the Center for Work Life Policy reporting on the reverse brain drain in this sector and reported in this month’s Harvard Business Review. I had the pleasure of attending the launch event for this report last night at the New York Stock Exchange, as I serve on the board on this amazing organization that is committed to helping companies to fully realize their female and multicultural talent. Their fearless, bold, and incredibly smart leader, Sylvia Ann Hewlett, is the author of two fantastic books that are a must read for women in the work place – Creating a Life Professional Women and the Quest for Children, and Off-Ramps and On-Ramps: Keeping Women on the Road to Success.

So, why should we care that thousands of qualified women are leaving the workplace year after year in fields where their talents are so needed? Because the US, and in fact the world, is facing increasing labor shortages in these areas, and in the US in particular we can no longer rely on immigration to meet this need. Reducing the attrition to 25% would add 220,000 SET workers to the economy according to Ms. Hewlett.

This study is the first to map the career trajectories of women in these industries, but the learning’s are applicable to other fields, particularly finance. This research identified a number of antigens and other barriers that help explain the female exodus. “Women are seriously turned off by hostile macho cultures, severe isolation, mysterious career paths, systems of rewards that emphasize risk-taking, and extreme work pressures.” Combine that with the added responsibilities that come with children and aging parents, and it should be no surprise than women choose to leave.

Do companies care? And more importantly, what are they doing about it? John Thain, current CEO of Merrill Lynch ( and my former boss at Goldman Sachs), was the first to provide a response. His answer was basically yes, and a lot. I served on the diversity committee of Goldman Sachs for a number of years, and we had a number of best practice programs, as does Merrill today. Representatives from GE and Johnson and Johnson were also there to share their programs, which are no doubt of value, but are any of these initiatives, collectively, moving the dial? And if not, and that is the answer by the way, why not?

Well, I have a lot of thoughts on this topic and will save those for another entry, but so not to leave you hanging I will say this – at this point in history, the solution lies within women more fully using their resources, and thus power, to create change. Until then, these programs help, and I applaud the Center for Work Life Policy and all the exceptional diversity professionals within the companies that participate in the Hidden Brain Drain Task force that continue to more fully realize the talents and potential of all their employees.

Check out Lisa Belkin’s view on this topic in the New York Times.

Fresh Take / Fresh Talk : Deborah Siegel

This is the first in a series of interviews I'll be posting with thought leaders on a variety of hot topics. I invite your comments and suggestions on areas of interest to you.

The Challenge: Common ground among women across generations seems lost. Has the women's movement stalled?

The Take:

Deborah Siegel, PhD is the author of Sisterhood, Interrupted: From Radical Women to Grrls Gone Wild, co-editor of Only Child: Writers on the Singular Joys and Solitary Sorrows of Growing Up Solo, co-founder of The Scholar & Feminist Online, and a blogger at Girl with Pen (http://www.girlwithpen.blogspot.com/). She has written about women, sex, feminism, contemporary families, and popular culture for a range of venues. She is currently a Fellow at the Woodhull Institute for Ethical Leadership.

Why did you write a book called Sisterhood, Interrupted?

I wanted to better understand why older women and younger women weren't always talking to each other—or at least weren't talking in the same language—when it came to the question of what so-called modern, liberated women these days are supposed to want. I saw a number of clashpoints out there—the alleged "opt-out revolution," Girls Gone Wild, and now, of course, the election. What it comes down to is that women of different ages often have different understandings of what it means, in this country, to be powerful, or empowered. We often have different ideas of what power is and how to achieve it, of what sexism looks like and how to fight it, and what the word "feminism" itself even means anymore.

Did you find in your research that Generation Y and X women identified with the term Feminism?

A lot of younger women will say "I'm not a feminist, but…" and then go on to finish that sentence with a statement of strong feminist belief or values. What comes after the "but" is important, but I also believe that feminism is a word worth reclaiming. Words give us common ground. Without such a word it becomes difficult to unite in common cause. Words not only express, but shape the way we think. They have the power not just to name, but to change.

Why did Feminism become such a dirty word?

In part, we can blame it on the media, which gave us the oh-so-sexy image of the bra burning man hater—an image many of a younger generation absorbed. But I also think that social movements constantly need to reinvent themselves. Until recently, feminism hasn't always done such a great job.

I personally feel, and have others comment recently, that that women's progress is stalled, even moving backward. Do you agree?

There's been an illusion of progress that is unsubstantiated by the numbers. Women are still earning much less than men, only 16% of Congress is female, the number of women on corporate boards and in state legislatures has gone down marginally…and so on. And yet when you consider that women are over half the population, graduate from college and some graduate programs in rates that match and sometimes exceed men, and make most of the household purchasing decisions when it comes to consumer goods, there's a disconnect here. Women collectively have such power. But are we using it? Among other things, I think what's happened is that women are less likely to see our challenges in a larger political context than we were in the past. Tragically, we've lost the sense that so many of our remaining problems are shared.

Is it time to make the personal political, again?

Definitely. And I think younger women are starting to do this again. I've been traveling to college campuses with an intergenerational group of feminist authors this year, and it astounds me how much activism is going on at campuses these days. Younger women are searching for ways to make feminism their own, and even among the young people I talk to who support Obama, I find that the sexist response to Hillary has lit a fire. Women in leadership are still few and far between, and it's a real wake-up call. It'll be interesting to see how her example plays out for women who aspire to leadership positions across the board.

The Take-Aways:

- How do you relate to the word "feminism"? What does it mean to you?
- Do you see yourself as part of any movement for the continued advancement and empowerment of women?
- Does sisterhood have a future?
- Take this quiz.
- Read Sisterhood, Interrupted for a historical overview of the fights and frenzies around feminism in America over the past 40 years, and where the movement is today.

Stay at Home Moms Returning to Work

I received this question to PursePundit from a television news researcher - “I'm working on a piece related to the recession and full time moms forced back into the workforce (as husbands lose their jobs or take pay cuts). Could you offer some insight?”

Absolutely this is happening, as intuition would tell us, but the question is are they successful? The likely answer to that is, no.

Overall, unemployment is on the rise, with drastic hits in housing related industries, areas dominated by men. This not only includes construction, but also finance areas like mortgage banking. Finance more generally has been hit hard losing tens of thousands of jobs with more to come. Decreasing consumer spending is leading to broader based job cuts across sectors and across industries. In general demand is not very good, for men or women. Additionaly, the numbers of women that are trying to reenter the workplace is likely not captured in the unemployment numbers we get reported to us, thus understating the unemployement situation.

Women entering the job market, after years of absence, face huge challenges coming back in, even in good markets. There is a proven mommy discount, which researchers like Sylvia Ann Hewlett and others have noted in discussions about 'on ramping'. I recently read a piece in the NY Times which made me wild. It almost celebrated the big opportunity for employers in hiring women who have been at home because they can pay them up to 40% less then they are 'worth' based on their skills and experience because of the time out. The author went on to say that these women were just grateful to have a job, almost at any price.

Leslie Bennetts, in her book “The Feminine Mistake”, highlights the risks that women are taking in making that choice to leave full time employment to full time motherhood, a risk that becomes reality in economic downturns. She advises women, strongly, to weigh these risks very carefully before choosing to leave. Women who have stayed at work, even part time, will be in a much better position to step-up their financial contribution to the family should the family be in need.

So back to the question. How are women doing when forced to return to the workplace after years of absence due to economic need? Most women who are forced back in to the work place out of economic need in bad economic conditions will likely have to take jobs that are well beneath their abilities, and accept pay that is not in the same ballpark of what they earned prior to leaving. Many will find the limited options not doable, and instead opt to downsize their lifestyles drastically. This is clearly already happening and is what contributes to the downward economic cycle. For others, particularly those who have kept their skills current and their professional networks, success is more likely.

Though I was not able to easily find research on this subject a good place to look would be The National Council for Research on Women, a network of over 100 Womens research and Policy Centers.

Engaging Today’s Generation to Find Tomorrow’s Cure: The PINK Agenda

Marisa Renee Lee lost her mother to Breast Cancer and she is making it her mission to find a cure. In an eloquent essay on the Huffington Post she shares her story, hoping to inspire other young women to take action. “Worldwide, breast cancer is the second most common type of cancer after long cancer, and the fifth most common cause of cancer death,” according to Wikipedia. As an impassioned young woman who would not accept “defeat as an answer”, she created the Pink Agenda, to bring awareness and resources to the fight against Breast Cancer. She chose to do more then write a check, but to bring her collective resources to bear. That inspires me. Each of us, bringing our collective resources to the needs and injustices that matter most to us, is the force that will change the world for the better.

The Pink Agenda is having their second annual benefit in New York City on May 15th, and it is not to join in. If Breast Cancer is a cause you care about, and you want to be connected with like-minded young professionals, The Pink Agenda is for you.

Proceeds from the event will be directed to two leading Breast Cancer Research Organizations, The Breast Cancer Research Foundation and the Susan G. Komen Foundation. I am a Board member of BCRF, an organization founded by the most passionate Evelyn Lauder. BCRF recently commanded a top in the category endorsement by Oprah Magazine.

WFN and "Unfinished Business"

Late last year I decided to join the board of the Women’s Funding Network after careful deliberation of how I was going to use my resources: my time, my treasure, and my talent, to make a difference in the lives of women and girls, globally. Last week they held their annual conference in Washington D.C. which brought together women leaders from around the world. As a network of over 125 funds, these leaders collectively grant over $50 mm a year with most of the money going to grantee partners that help women survive and someday, thrive. We heard a representative in Latin American that women struggle with issues of poverty, gender related violence, as well as economic and financial security. In Africa the affects of violent conflict hit women and children hard. In Asia, the lack of political representation of women is driving their fund in to action. Around the world women are working, tirelessly and collectively to make for a better world. As one African leader put it, “Fighting for Women’s Rights is Unfinished Business.”

I had the pleasure of meeting Cheryl Saban at this conference, a regular writer for the Huffington Post and an amazing woman philanthropist. In a recent blog she states that “it's been proven that women who are provided with basic resources can make the difference between a family rising above poverty, or being trapped by it. “ Amen to that sister!

Lady in Black

“What’s better than being in a room full of women?” declared the auburn-haired blue-eyed woman in the front of the room. No, this was not “The Vagina Monologues,” and the woman was not Eve Ensler, nor was it Hugh Hefner. It was First Lady of American Magazines, Cathie Black.

I had met Cathie a few years back at one of the FORTUNE Most Powerful Women in Business Conferences, a list she has been on each on every year since its 1998 debut. This time around the venue was much more intimate, a salon gathering in an apartment overlooking the East River. I have occasionally found such senior women to be aloof and unapproachable, but not Cathie. She was funny, warm and real.

She was there to talk about her book and share war stories about 30 something years in the industry. In Basic Black: The Essential Guide for Getting Ahead at Work (and in Life), readers are offered candid personal stories, teachable moments, and straight-up advice from a woman who has seen it all. Hired as the advertising manager at Ms. magazine in its early days, Cathie was charged with winning over skeptical advertisers. Her sales team often showed up with promotional materials printed on hot pink paper. It was a heady time. Because a feminist magazine seemed a risky—and controversial—venture, potential advertisers sometimes pushed them straight out the door. As Cathie notes, "Adversity is a great teacher."

Cathie went on to become publisher of New York in 1979—and the first woman publisher of a weekly consumer magazine. Currently, she heads up Hearst Magazines and manages the financial performance and development of publications from Cosmo to Esquire to O, the Oprah Magazine.

In Basic Black, Cathie asks readers to ponder what "having it all" really means, to them, today. She explores the idea of creating what she calls a "360-degree Life" for oneself, encompassing work, relationships, home life, and family. ….Though the book is a great read for any professional woman it is especially good for those just starting out. Imagine having a career coach like Cathie to tell you how to handle job interviews, which rules to follow and which ones to break, and why you should make your life a “grudge- free zone”.

When, in an effort to defend Hillary Clinton, Saturday Night Live’s Tina Fey declared “Bitch is the New Black!”, clearly she had not yet met Cathie. Cathie is the legendary Black – just like your perfect little black dress she had advice for every occasion.

Subscribe to the New 85 Broads Magazine

Few women have done more to create community for women then Janet Hanson, the founder of 85 Broads. This network, which now boasts to have over 15,000 of the smartest women on the planet as members, existed long before we ever heard the term 'online social network.' Started 11 years ago as a way for Janet to remain reconnected with the fabulous women she worked with at Goldman Sachs, it has since taken on a life of it's own. The membership is now available to alums at over 250 schools. Once you sign-up you become a part of this powerful network.

The immediate news is that Janet has decided to launch a new magazine! So here is what you can do. Subscribe. It will be the best $12.95 you ever spent.

https://secure.85broads.com/magazine

Catch me on FOX Business News 10 to 12 this AM

Today is my second appearance on FOX BIZ as a market expert and I am waiting anxiously for the email to arrive announcing the topic areas. Having followed the business headlines so religiously since the start of the year it is amazing how much they have changed, despite the fact that none of the problems that were the early focus have gone away. The Media just moves on. The last time I appeared you could not escape the news on the Monoline Insurers, and despite no solutions to their problems, are we hearing about it anymore? Nope. It is not surprising that the election, the price of oil, massive write-downs, surprising earnings reports and global food shortages are now the focus, but I wish someone, somewhere, would keep a list going of what we were talking about yesterday and now today. ( and this could include good as well as bad news) That list would highlight the issue/concern/reason for headline, then map the evolution of the problem/solution, and could even feature the current administration's ( and candidate's) responses. The voters last night responded so clearly that the issue for this election is the ECONOMY and the media could do a much better job in keep America informed not only of the issues of the day, but the bigger picture.

If you have limited time on your hands their are two weekly must reads to stay relatively informed - the Economist and Barron's. I also try to scan the Journal, The NYTimes, and the FT - but given the intensity of the what is going on right now, just reading what catches my eye is quickly becoming a full time job. It is not surprising that many are likely suffering from "Overnewseditis."

Warren Buffet and Investing Like A Girl

One of the many projects I have been working on for a while is the writing of a white paper that takes a comprehensive look at women as investment professionals, with a focus on women as traders, hedge fund managers, and portfolios managers. In collaboration with a good friend Carrie McCabe, a true goddess in the institutional hedge fund space, and the National Council for Research on Women ( http://www.ncrw.org/ ) we hope to uncover some of the reasons why women are so underrepresented in these important areas. As many of you know, I was a trader and have for almost twenty years been actively involved with promoting investment careers to women. I participated in countless recruiting events while at Goldman, and today still enjoy speaking at University gatherings on the topic.

I was very excited to hear about an upcoming book on Warren Buffet in a piece appearing in Motley Fool, and online investment news source. It seems that one of the greatest investors of all time has been accused of investing like a girl! The article hints at sound research that is out there and our upcoming paper, which we hope to release in the fall, will provide you with the full bibliography of such research. For now here is what the writer, Lou Ann DiCosmo, has to say:

“So how exactly do women invest? Check out these characteristics of female investors that distinguish them from their male counterparts.
- Women spend more time researching their investment choices than men do. This prevents them from chasing "hot" tips and trading on whims -- behavior that tends to weaken men's portfolios.
- Men trade 45% more often than women do, and although men are more confident investors, they tend to be overconfident. By trading more often -- and without enough research -- men reduce their net returns. But by trading less often, women get better returns and also save on transaction costs and capital gains taxes.
-A study by the University of California at Davis found that women's portfolios gained 1.4% more than men's portfolios did. What's more, single women did even better than single men, with 2.3% greater gains.
- Women tend to look at more than just numbers when deciding whether to invest in a company. They invest in companies they feel good about ethically and personally. And companies with good products, good services, and ethics tend to have better long-term prospects -- and face fewer lawsuits. “

I look forward to the day when like a girl is no longer used in a derogatory sense and books like these will no doubt help that day come sooner.

An Epic Evening

Tonight I will be attending an event I have been looking forward to for some time, the EPIC AWARDS, which will celebrate the 10th Anniversary of the White House Project. Those of you who know me would not be surprised to learn that this is an organization I have supported for years, and encourage you all to do the same. “The White House Project is a nonpartisan, nonprofit, 501(c)(3) organization that aims to advance women’s leadership in all communities and sectors—up to the U.S. presidency—by filling the leadership pipeline with a richly diverse, critical mass of women. “ I like that. We need that. The organization is run by one of the most incredible women leaders of the non-profit sector, Marie Wilson. Before starting this organization (with others) Maria was head of the Ms. Foundation, another noteworthy organization I am proud to support. For over 30 years Marie has worked on behalf of women and girls in this country and beyond. I am truly honored to call her a friend. To get a sense of Maria read her latest post on HuffPo.

This year the WHP will be honoring, among others, Abigail Disney who is responsible for the new documentary Pray the Devil Back to Hell, a film about the extraordinary story of a band of Liberian women who came together in the midst of a bloody civil war, took on the warlords, and brought peace to their shattered country. I believe it is premiering soon so be sure to put that one on your list.

They will also be honoring a group of 10 women, for their extraordinary contributions, including many I know well: my dear friend and mentor, Barbara Dopkin, my new friend and powerhouse at Best Buy, Julie Gilbert, the head of human capital management at Morgan Stanley, Linda Reifler, and the two Goddesses who are behind the “Women Moving Millions Campaign” , Helen LaKelly and Swanee Hunt. It will be an absolute and complete feminist party and I cannot wait to be there.

Hmmmm …. Though I was planning on wearing a red dress, I just might have to break out my Wonder Woman Costume. I cannot think of a better occasion.

The Global Fund for Women

Kavita Ramdas believes that the world would be a better place if women’s basic human rights were strengthened, protected, and advocated for across the globe.

A few weeks ago I had the opportunity to have lunch with Kavita, the President and CEO of the Global Fund for Women, to discuss why investing in her fund makes a difference. For over 20 years this organization has been identifying women’s groups around the world that are meeting local needs in the areas of economic justice, ending gender-based violence, advancing health, providing access to education, and expanding civic and political participation. In funding them, I would be funding over 500 different groups a year that have been carefully screened for maximum impact. I suddenly felt a weight off my shoulders. Having struggled to find the time to search out organizations that were serving in the most underserved places in the world, I felt my prayers were answered. Kavita spoke passionately of so many programs that were impacting lives, real lives, people she had met and touched. Kavita’s home base is in San Francisco, but we all have an opportunity to meet her at their upcoming benefit in New York on June 5 th, in honor of the Liberia President Ellen Johnson Sirleaf. Though she is not particularly fond of glitzy fundraisers, she realizes that people need to be exposed to their work here on the East Coast, and this is a great way to do it.

The Global Fund for Women is an A ranked charity by the American Institute of Philanthropy and three stars on Charity Navigator. They are also a member of the Women’s Funding Network.

Consider being a donor to this amazing organization. Visit their website.

On June 5th they will be having a gala in New York City to both raise funds and build awareness. For more information and tickets email gfwtwenty@gmail.com .

For an insightful recent oped by Kavita visit HuffPo.

“China Shares Fall on Beijing Rate Signals”

Shares in mainland China dropped 5.6% yesterday. ( according to WSJ) To put that in context that would be equivalent to a 690 point drop in the DOW. 690 POINTS. Could you imagine what the fed would be doing if we had a day like that???? What set it off according to the journal? Continued bad news in the US ( note that stocks in the US barely moved yesterday) including a poor earnings report by GE, as well as a year over year 16.3% increase in money supply. Excuse me, but can you spell inflation? To put that in even greater context the “Shanghai Composite Index is down 46% from the high reached last October, and down 37% so far this year.” That makes our down 8% ish market look like a blessing.
Now the real question is why? Why are Chinese equities performing so poorly given that there economy is so much stronger than ours? I have not read about a Chinese Sub-prime problem, nor have I read about a credit market meltdown. In fact, I am not sure they really even have any mortgages over there to speak of, and certainly not securitized ones. I seem to recall that people in China actually do save up to buy homes, which for many takes a lifetime. So why? The most common answer I have gotten is because there was a speculative bubble in Chinese equities. After years of off the charts performance it was just time for a breather. A 46% breather.
So now the question is if you were not one of the people caught in the frenzy, is it time to buy? I am not sure, but I am certainly working my way to figuring it out.

Market Post - The Pain is Far From Over

March was an interesting month for the markets. After a really bad January, and a bad but better February, March closed out barely in the red. The equity markets bottomed out on March 10th, and spent most of the month making a recovery. That sentiment continued in to April. Many seem to feel the worst is now behind us, at least until last Friday when GE reported majorly disappointing earnings. The week ended solidly in the red. Dow Jones 12,325 down 2.3%, Nasdaq 2,290 down 3.4%, S & P 1,332 down 2.7%.

So is the worst over? I say, hardly, and I can give you a long list of people who are still firmly on that side of the wall. I predict that GE and the others that reported this week will be but the first few of a long list of companies reporting earnings disappointments. The bad news is not likely to end there. Peeling back the layers of the poor employment report will likely reveal even more bad news, and so will be true for inflation numbers. The FED is most certainly doing their best to keep the wheels turning, but the problems in the US economy are much deeper then the FED can solve on a timely basis. Their hope, I believe, is that they can do enough to help the financial firms attract more capital to sustain substantial losses yet to come.

The most alarming news I heard this week was reported in Barron’s. Ed Hyman, of ISI Group said that “banks hold $4 trillion or so in unsecuritized loans on their balance sheets, much of which is home-equity, interest only loans, option arms”…. And the like. Let me say it again, unsecuritized. Combine that with the a few tidbits reported by John Burns, a US housing market expert that recently did a piece for John Mauldin, that 8.8 mm homeowners will have mortgage balances equal to or less then the value of their homes by the end of March, and you have to ask, how could the worst possibly be over? He goes on to say that at the end of 07 5.82 % of all mortgages were delinquent, and it takes an average of 15 months from the date of the first missed payment by a homeowner to a liquidation of the house. The pain is far from over.

Meeting Jane

I had watched her tapes, read her books, bought the appropriate leotards and leg warmers. I was 18, and I was a fitness nut. Jane Fonda was my fitness role model. I knew she was an actress first, but I had not watched any of her movies that I could recall. Then in 1982, came the multiple Academy Award winning movie, On Golden Pond. She was now beyond a tight-bunned Goddess to me. Although I was not yet 20 years old, I remember how the film moved me to consider the importance of my relationship with my father. Then last night, at an intimate living room gathering, I heard Jane Fonda read from her memoir. I was sitting in the front row. Before me was this stunning, fit, 70 year old woman, and I thought to myself, boy, those millions of leg lifts have really paid off.

The purpose of the gathering was to thank donors and introduce potential new ones to the work of the Women’s Media Center. Founded in 2004 their mission is to “make women visible and powerful in the media.” Jane was one of the founders of this organization, together with Gloria Steinem and Robin Morgan and generously supports the cause.

Jane embraced the podium for her reading. “I DON’T LIKE YOU!” she belted with a pointing finger and a quivering head, mimicking Katharine Hepburn’s first meeting with her. Jane was trying to convince Katharine to except the role, opposite her father, the late and great Henry Fonda. She went on to read, act, the entire 18th chapter of her book, in which she shares the most intimate details of not only making the film On Golden Pond, but of her complex relationship with her father. She closed her reading with tears, and the words: “Dad died five months later.” She was brave, vulnerable and real, and I wanted to give her a hug.

Jane invited questions and I raised my hand. ” How do you feel at this very moment about the role women are going to play in shaping our future?” With clenched fists she unleashed her response. It was a had-to-be-there kind of moment. In a nutshell, she said, the time is now.

Although I had already thanked her and said good-bye, I couldn’t leave. I turned and walked back to her. I grabbed her hand and looking in to her eyes, I said “We are sisters.” With a big, beautiful smile she agreed.

For Girl with Pen's take click here