I Was Wrong - Fed Does NOT Cut Rates

The FED just announced they were not going to cut rates today which is a surprise given what I was hearing in the marketplace. This does not mean they cannot do it tomorrow, or the next day, or.... or. The positive side of this is that perhaps they believe the markets can handle this decision and they have some good news in thier pocket. A cut would have said "things are really bad and we are going to add liquidity", not cutting does not say the opposite, it just does not send that incremental message. We will see how this is taken by the markets. All eyes still focus on AIG as they really are, too big to fail.

A Historic Day for the Markets

How do you begin to describe what went on today in the financial markets? There was no doubt that it was going to be a tumultuous one and of course it was. Lehman Brothers. First and foremost my heart is broken for the thousands of people who lost their jobs and a substantial part of their savings. Second this should be an example of how you cannot wait to find a solution to your problems in these markets, or the market will take you down. Third I am hearing from hedge fund friends that there is a lot of confusion out there as to how trades with Lehman will settle. All just not good.

On to Merrill. First and foremost John Thain is one of the smartest people I know, and more importantly he is a really good guy. I am sure it was very hard for him to have to sell the firm he so recently joined, but I have no doubt that he got the best deal he could. The fact that the deal was struck way above the closing price on Friday is testament to that. I now get why the deal makes sense, and I did not really understand it last night. Simply put they had no choice. With Lehman gone the market was going to take a run at the next I Bank in line and that would be ML. Cudos to Ken Lewis for not being piggy piggy and buying ML at a higher price then he probably had to. I believe that should help moral a lot. This merger does make business sense.

On to AIG. They are in big do do. I think the market was hoping all day that they would come up with something and the fact that they did not helped the market to close at the lows. The fact that so many of the banks are working hard at a solution says that AIG failing would be a big problem for them. The issue is counterparty risk in the massive derivatives market in which they are huge players. I believe their balance sheet is in the hundreds of billions, if not a trillion... people are going to be asking "where were the regulators?"

On to Goldman Sachs. Goldman did the right thing early on. They recognized there was a problem and they took quick action by pairing down positions and taking their lumps. The challenge there after was to try to keep the junk off their balance sheets when their customers were blowing up around them. As a trader I know that is a very, very hard thing to do. In theory you are there to provide liquidity to your clients, but when you don’t have it on the other side, ( ie no one to sell the stuff to ) what do you do? What I use to do was to either try to miss by a little, or have a serious conversation with the client to say “look you know and we know this is bad, here is the price where we can do it and it has to be kept quiet.” I am sure GS did some of both. I am hearing that there is next to no liquidity in anything right now on the fixed income side and in time this will be very good for whoever is left standing. Longer term the fact that competition has been reduced and spread has returned is a good thing. Further people are saying that GS will not survive without having access to a deposit base, and that might well be true. I think it is more likely that GS finds a way to buy a bank then the opposite. My other bold call is that GS finds the funds, perhaps in partnership with some big PE players, to buy a bank.

On to the FED. I am going to make another bold call that they are going to cut rates tomorrow, maybe even sooner. What choice do they have? By opening up their discount window to more and more types of collateral they are saying that we are going to provide liquidity to the market. Period. I don’t believe they should step in to help AIG directly, but by helping the banks, they are helping AIG. They should not give a hoot about inflation right now and just do whatever it takes to reduce the probability of both a major financial crisis and a depression. They need to inflate asset prices, in particular housing. Think of how many problems would do away if they facilitated a bottom to the housing and commercial mortgage markets. They should also create something like the RTC to take on the bad debt. This is where the Fed is missing the boat I think. Bad assets have to go somewhere to be worked out and the sooner the better.

Last the hedge funds. This is a wild card and because of the lack of transparency it is very hard for anyone to know what their positions are, howthey are marking those positions, what their counterparty risk looks like and thus what they are likely to do. One hedge fund, Long Term Capital, created chaos 10 year ago and now there are over 9000 hedge funds out there operating and many of them are huge. Providing liquidity to the market will of course help this situation.

I think tomorrow is going to be another very volatile day, not to mention over night. With the Asian markets closed today I am sure they are going to open very soft.

Lehman to Declare Bankruptcy on Monday Morning

The news in the financial sector is going from very bad to absolutely disastrous. Though it seemed likely last week that Lehman was not going survive, actually seeing the headlines that they are going to declare bankruptcy on Monday morning is breathtaking. Further it seems likely that Merrill Lynch is not going to remain in independent investment bank, and the rumor is that Bank of America is going to buy the am. I have to say I don’t understand that one. It does not make sense to me that B of A is strong enough to take on ML’s balance sheet. The price also does not make sense to me as ML closed at around $17 and yet B of A is buying them at $29? Further, AIG is looking to the Fed to bail them out as they cannot find an investor to give them money at levels that they think make sense for them. How can the FED bail out an insurance company? First Bear Stearns, then open up the discount window, then Fannie and Freddie, sorry to Lehman, but now they are going to help AIG? If that is not enough the pundits are saying tonight that Goldman and Morgan better find buyers, now, or they too will be toast. Business models are crumbling before our eyes.

How is all of this is going to play out in the markets? I think this bodes poorly for equities in general, financials in particular, and the US dollar. The world has to be losing faith in the stability of the US Financial system. Major institutions are basically disappearing overnight and they have huge, complex, balance sheets. As for the US Government's or the FEd's balance sheet? Don't get me started.

The days of massive leverage are over - both at the consumer and the institutional levels. The Investment Banks are waking up to this reality as are all the other financial players that rely on high leverage to make their business work. This is not good for hedge funds, not good.

I started writing this BLOG at the beginning of the year because I thought it was going to be a historic time in the financial markets but if someone would have told me that Bear and Lehman would both be history by the third quarter, I never would have believed them.

It's All About the Capital - or Lack There Of

Ok here is the problem. Many, many large financial institutions in this country need capital and no one wants to give it to them. Big problem. For Fannie and Freddie only the US Government could do it, but for Lehman and WAMU and AIG and and… anyone can but no one wants to. If they cannot raise capital then they will go under, and thus it is up to the US Government to decide if they pose too great of a risk to the financial system if they fail in which case, as in the case of BEAR, they would step in. It is simply unbelievable how quickly the wheels are coming off the bus.

My best wishes go out to the many people who are innocent bystanders to all this and have had their savings evaporate because of it.

More on the Take-Over of Fannie and Freddie

Mohamed El-Erian, CO CEO and CO CIO at Pimco published a thoughtful OPED in the FT today and it is well worth a read. In my piece yesterday I likened what could have occurred to a tsunami, and he choose a hurricane, but we are saying basically the same thing. To be more specific he is calling what is happening a "deleveraging hurricane" and I could not agree more. He also points out that this is the third time we have had such a bold interventionist move occur on a Sunday. Clearly the folks in Washington were very worried about what might have happened on Monday without such action. What he thoughtfully points out is that the government balance sheet will not likely be enough but thier action will need to be supported by other capital inflows. He further calls for a 'holilstic response' from the authorities "including meaningful co-ordination of an often-diffused domestic policy apparatus and explicit, timely, and targeted international support." Good luck with that. All any of us can do is sit tight and pray that Mr. Paulson is bringing in the big brains to help him figure this all out.

Fannie and Freddie Get Taken Over

Over the weekend Fannie Mae and Freddie Mac were taken over by the US Government. It was only a matter of months ago when the solution to the growing mortgage problems was to up the loan limits so these two giants could guarantee bigger mortgages. I guess that did not work out. The speed at which this ‘rescue’ happened is testament to just how bad the books must look at these two quasi governmental organizations. With home prices collapsing in many markets, and generally soft almost across the country, I just cannot simply imagine how much money they have effectively lost. I cannot imagine. The reality is they likely have no idea either. Their portfolios are just so large and so complex, that the only possible buyer was in fact, the US Government.

Good Move, and really, it was the only move and the sooner the better. Way too much depends on the perceived credit worthiness of these two entities. Numbers I have recently read have showed that foreigners have been easing up buying their paper, and a broad based dumping of the stuff would have been an absolute disaster. Can anyone spell financial tsunami?

As to the highlights of the plan you can read here for an overview. I have not yet had a chance to pour through all the commentaries as to the details, but I am sure they are few and far between right now. Although I can understand the markets in general reacting positively to this news in the short term, long term I am not so sure. Japanese banks in particular hold a boatload of this paper so I would not be surprised if a plane load of sushi is on it's way to Washington as I type this.

Without a doubt Fannie and Freddie's balance sheets are going to have to shrink, big time. Where are all those lovely bonds going to go? Both of these companies are leveraged big time, bigger I think then even the investment banks, and of course multiples of commercial banks. Oh, and what about the balance sheet of our country? It looks a whole lot different as of right now. First it was open up the discount window and now this. What is next? Will another I-Bank be too big too fail but this time JPM says no? None of this can be good for the dollar over the short to medium term.

So yes, still a good move as yet again another immediate disaster is avoided, but it will come at a cost. A less bloody and nasty cost I think, but still a cost.

As an ex mortgage backed bond trader, I will most certainly be writing a lot more about this in the days and weeks to come. Stay tuned.

Another Bad Day for the Markets

If you only know me through what I write here on my BLOG you might think I am a “glass half empty” type of gal. Every since I started this blog at the beginning of the year I have been going on and on about the credit crisis, the huge problems in many of the country’s largest companies, the poor and perhaps even pathetic actions of the officials that are supposed to be keeping the American economy out of deep, dark trouble….and that is not likely to change any time soon. There will be a time, I hope, when I have good news to report on, but that day is not today. It is just plain nasty out there with few spots to run for cover. My portfolio, like yours, is surely suffering.

The US markets suffered big losses today as even the optimists seem to be throwing in the towel. The most popular argument I read by those arguing that the overall market is a buying opportunity is that the market, overall, is down a lot. I have never understood that argument and I never will. Just because something is down, even a lot, does not mean it is cheap. Yes of course if the fundamentals are there, and better yet have not changed despite a decrease in prices, then yes, that might be a buying opportunity; but, the fundamentals overall have most certainly changed. Housing prices, and thus consumer wealth, has literally fallen off a cliff, and the same time that prices in general, or almost everything, has gone up. Huge companies across multiple sectors are waking up to find their balance sheets a disaster, or their business models fatally flawed, or their costs increasing, or their revenues plunging, or or or….

Even if you think things are not that bad the risk premium has most certainly gone up, which when you discount future cash flows, ( ie price the stock today ), means that all else being equal the stock price should be lower.

Trust me. I want to see the silver lining, I want people to feel secure in their jobs, and not take a big gulp when they fill up their SUV with gas, but I still think it all is going to get worse before it gets better. As I have said many times before on this page the party for the American consumer is over and the hangover is in full swing.

More on the market tumble.

Back to School and Back to Work

September is my New Year. Most of my friends who have kids seem to feel the same way. I like it. After a lot of good intentions for all I was going to get accomplished over the summer months, it is nice to yet again wipe the slate clean. I spent the start of year writing a lot about what was going on in the markets, and I am going to get back to that soon. I also hope to write more about culture, books, music and well... just life. Thanks for reading and please think about sharing this BLOG with your friends... I promise, lots of good stuff is coming.

Happy New Year!

The Lazy Days of Summer - A Dog's Life

We are packing up here in Kelowna B.C. to begin our long journey back home to CT. It has been a great summer.... and no one enjoyed it more than our dog Sunnie! Don't you sometimes wish you had a dog's life? Pictured here, on the boat, in the middle of Okanagan Lake it is clear that she does not have a care in the world. I am trying to take a big deep breath as I think ahead of all the craziness that lies ahead when I return home - months of mail, the start of the school year, work, projects I kept on the back burner. All Good as my brand new friend MJ would say... all good.

Enjoy these last few days of August!

Lamont - My First Music Entry

Today a dear friend, gifted musician, brilliant songwriter and an outstanding human being launched his third musical release. Lamont leads the group TEN SHEKEL SHIRT and his new cd is called JUBILEE. Buy it now on Amazon. I have had the pleasure of hearing the whole album and yet again Lamont’s words moved me like few other artists ever have. He chooses to write songs that inspire, liberate and empower. His previous two CDs are also excellent and won him and his band much acclaim in the Chrisitian Music Catagory.

In his spare time Lamont pours his immense energy in to trying to make the world a safer place for women and children escaping slavery around the world. Check out LOVE146.
May God Bless you Lamont, your band, your beautiful family..... Thank you for being the change that you want to see in the world.

Spread the word. Buy Jubillee.

For more on Lamont check this out.

Home Prices

I was scanning the headlines this morning and read this piece on the most recent home sales data in the US. The numbers were so shocking that I feel compelled to link to it. Here it is. I continue to think that the worst is not over for the equity markets overall, or for the US economy. The housing market has to hit bottom and show signs of recovery before everything else can follow. Consumption is what drives drives growth and in the US the average consumer has been using their home equity as a checking account. That party is over and will be for a long time to come.

Fannie, Freddie and More

Well the news seems to be going from bad to worse for these two mortgage giants. Both reported earnings this week and losses were multiples of what analysts expected. Freddie, the smaller of the two, reported a quarterly loss of $821 MM and cut its dividend 80% to preserve cash. Fannie Mae, lost $2.b BB for the quarter and also slashed its dividend to 5 cents from 35 cents. Both are going to be in need of more capital before year end. Combined these quasi government entities own or guarantee one half of the $12 trillion in US home loans currently outstanding. With delinquencies continuing to rise I doubt that their problems are over.

On a brighter note the US markets and particularly the US Dollar had a great week. Faith the in Greenback has returned seemingly on the back of falling commodity prices. I continue to be a commodity bull in general and view these pullbacks as a buying opportunity. Natural Gas in particular, but also the precious metals, seems to be offering good entry points. I do believe that growth is slowing, particularly in the developed countries, but not enough to grind the global economy to a halt. Rising prices has resulted in some demand destruction, which could explain at least some of the pullback, but longer term demand has nowhere to go but up for most of the core commodities. The tough part is figuring out what price brings the forces of supply and demand in to equilibrium over the longer term, and the experts I rely on are telling me higher then prices at the moment.

No doubt with this much uncertainly over so many core economic and financial variables, the volatility will continue. Keep those seat belts fastened.

Unemployment Continues to Rise

The bad news continues on the employment front, with jobless claims posting yet another increase over analysts expectations. The headline number showed a seasonablly adjusted increase of 7,000 to 455,000. This number is the highest since March 02. Last week the overall unemployment rate hit the meter at 5.7%, again a 5 year high. This is certainly not surprising given what is going on in the economy and it is likely that these numbers will continue to rise until the economy shows signs of a turn-around. The hardest hit sector so far have been anything related to housing, but the ripple effect is extending through financial sectors and of course consumer related companies. STARBUCKS caught headlines recently with announcements of massive store closures and lay-offs.

Where I am here in BC there are help wanted signs everywhere, but the problem is the jobs are low paying, service related positions. Tim Hortons, The Shoe Warehouse, Winners... $10-$15/yr jobs do not pay for housing or put food in the table in these parts, certainly not when a loaf of healthy bread cost $4.25 at the local market.

My heart goes out to all people who are struggling to make ends meet in this difficult economic environment.

$15.5 Billion of Losses with More to Come

Do you remember when one million dollars seemed like a lot of money? Reading the business headlines these days one million dollars truly feels like a drop in the ocean, especially when those numbers are referring to corporate losses. On Friday, GM reported a quarterly loss of $15.5 billion. A QUARTERLY loss of $15.5 BILLION on total revenue of $38 billion. Am I the only one out there that asks, how is that possible? The reported loss per share was $27.33 on a stock price of $10.

So how exactly do you lose $27 billion dollars in a quarter? First of all you take a long list of one time charges and hope they do not become more time charges. This quarter the total came to $9.1 billion, including $3.3 billion for the buyouts of 19,000 US hourly workers. Now if you have a calculator that goes that high you will quickly figure out that that is over $170,000 per person. Is this really the end of their problems with human capital challenges? We are likely to see more one -time charges to come only for a different 19,000 workers.

They also booked $2 billion worth or write-offs related to “drops in the value of pickup trucks and SUVs coming back to the company after their lease term ends.” Ouch. I guess $4.00 gas is leading some to change their consumption behavior. Good for them, bad for GM. But $2 billion in one quarter? What about next quarter? This problem is not going away.

Another $1.3 billion went to write-offs due to a reduction in the value ofGM’s interest in its former financial arm, GMAC.

If you eliminate the entire one -time charges they still lost $6.3 billion or $11.21 per share. So let’s think about that on an operating basis. What the numbers are saying is that in order for GM to just break even in a more or less steady state they need revenues of about $45 billion, quarterly. I am no equity analyst but I think that is going to be hard to do given that people do not seem to be buying too many cars, and especially not the gas guzzling ones that are GM’s specialty. Speaking of equity analysts, the associated press reported that of twelve analysts surveyed by Thomson Financial the average prediction was a loss of $2.62 per share. That is only off by a multiple of 10. Excuse me, but aren’t these people paid to know what is going on in their companies?

One of the many questions I was left with after reading the earning reported is how in the world are they not already bankrupt? Where is the cash coming from? According to the same report they burned through $3.6 billion in the second quarter.

Years ago, and I mean years ago, by husband said GM was going to go under and he shorted the stock. No not at the 2000 high of $93, but in the 30’s. He watched in pain as the stock rose north of 50, and finally covered the short in the 20s after hearing way too much about it from your truly. Now as it looks headed below $10 I am hearing a lot of I told you so’s.

By the way… he also thinks GOLD is going to $1200.

(info on GM's quarter from the Associated Press as reported in the Kelowna Courier)

"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 )