Town and Country Philanthropy Issue – and more…..

I love magazines. In fact, I collect them. My basement is full of thousands of them: from Fortune and Fast Company, to Oprah and Architectural Digest. I cannot read one tenth of the number that flow in to this house but it gives me joy knowing there are there in case one day I actually have the time to look at them.

This month one issue came in that I read from cover to cover. It is so of the moment both in terms of what is going on in the world, and what is going in my world, that I felt it was written just for me. It is now my second favorite issue of any magazine of all time. (My first is the 1972 issue of MS Magazine with Wonder Woman on the cover)

What is it you ask? The June issue of Town and Country – The Special Philanthropy Issue. Here are the top 10 reasons why I love it and why I feel it is so relevant this very moment:

1) In an article called “The Upside of the Downside” the wonderful Tracy Gary encourages us to give abundantly despite being in a period of scarcity. “The paradox is that in economic times like there, the opportunities for our humanity to flourish are abundant.” I like that. Buy Tracy’s amazing book here.

2) My good friend and author Joanna Krotz wrote a number of features in this issue including some profiles of some of my favorite people on the planet. Her new book “ Town and Country – The Guide to Intelligent Giving” was just released and it is awesome. Click here to buy it for you and ALL your friends. For more on Joanna and her work – click here.

3) JK wrote a piece called “Teach Your Children Well” which offers some great insights about how to start the dialogue about money with your children. If you want to go deeper my fav money book for kids is “Raising Financially Fit Kids” by Joline Godfrey. Click here.

4) JK profiled Jennifer Buffet, an extraordinary woman giver who I have had the pleasure to getting to know through the Women Moving Millions Movement. She is as special as JK’s story says she is and more. Jennifer is committed to the empowerment of girls globally. The Novo Foundation is behind the GIRL EFFECT which if you have not seen and forwarded to everyone you know, you much. Click here to watch. For more on the NOVO foundation – click here.

5) JK profiled a force of nature from Atlanta, Kayrita Anderson, whose story I have been telling on radio programs around the country this past few weeks as part of the Women Moving Millions media outreach. Kayrita and her husband are working to end child prostitution in the state of Atlanta and aspire to share their model with others across the country. To learn more about their work click here.

6) There is an article about helping children in Cambodia, a country I recently travelled to with the American Red Cross. The gorgeous photos of the children took me right back there. That trip proved to be a major catalyst for me in my philanthropic work.

7) JK wrote a piece on Goldman Sach’s Dina Powell, the leader of their 10,000 Women Initiative. I was present last year when they announced this program and I have never been more proud to be affiliated with this firm. Read this piece from Huffpo.

8) They give you a whole list of gorgeous jewelry you can buy that also supports charity. We need to, NEED TO, use our pocketbooks to inspire and enforce the change we want to see in the world. If we buy products that have a cause element, more and more companies will do this. I serve on the board of the Breast Cancer Research Foundation and millions of dollars flow in to use because consumers buy products with our logo. Do it more, do it often, and think about how you can do it within your own company.

9) If we want magazines like Town and Country to publish issues like this one we have to buy out the shelves, subscribe, and write a letter to the editor telling them how much we love it. Please do ALL THREE RIGHT NOW! Thank you to Pamela Fiori, Editor in Chief, for creating a space for all these incredible stories.

10) The last reason why I love this issue is because it came out at the same time Women Moving Millions concluded the first leg of their initiative that I am honored to be a part of. They surpassed their goal of raising $150 million in million dollar gifts that will go to Womens Funds around the country and around the world. Many of the women in the issue, including Tracy, Kayrita and Jennifer are donors, and I had them sign their pages along with Helen Lakelly Hunt and Chris Grumm, marking this moment, as being the start of something big. The ‘something’ is women using their collective resources, and especially their money, to drive the change they want to see in the world. This is a movement. This is the Women’s Funding Movement. This is the Women’s Money Movement.
Have a great Sunday. God Bless……………..

Residential Real Estate – My Own View

I have read many places that the economy will not be on solid ground until the problems in the residential real estate market truly begin to sort themselves out. So how close are we to that happening? First let me share a few facts I have picked up from recent readings.

According The Economist magazine, the value of US housing stock is $19 trillion. The value of homeowner’s equity has decreased to $8.4 trillion from $12.5 trillion in 2006. An estimated 10 million Americans are now in a negative equity position on their primary residence. For years as prices were rising home equity served as a debit account to fund consumption, that party is now over. Further people are now just plain worth a lot less than they used to be and therefore are likely to consumer less.

Some further facts come from John Mauldin’s May 4th commentary. Two-thirds of mortgages in the US are held by prime borrowers, of which 5% have missed at least one payment or 1.8 mm mortgages. These borrowers are not the first to default as they are of higher credit quality and have greater equity cushions, but as these folks face job losses and eat up their savings, the numbers will rise dramatically. This is happening now. The losses on these high quality loans are only just starting to hit. As the economy deteriorates the losses on this sector of the mortgage market will mount.

Sub-prime mortgages currently have a 22% delinquency rate, which adds up to 1.2 mm mortgages. These lower quality mortgages were the first to go, and delinquency rates continue to be very high. Huge losses have already passed through on these mortgages but more will occur especially if the economy continues to deteriorate.

More facts – Median home prices are down almost 30% from their peak on average, with a starting price of $230,000 in July 2006. estimates that 2.1 million homes will be lost this year and increase from 1.8 million in 2008. The available housing stock is still at record highs, and fewer people are ready, willing and most importantly, able to move.

We are currently considering a move out west and therefore we have our house in the market, and as I am typing this I am on a plane on the way home from Utah where we looked at some homes. When they say it is a buyer’s market they are not kidding.

As a seller I have had a few lookers, and I have to say we have a great house. There is nothing really wrong with it, which is key, except that it is not brand new. We have had one accepted offer, but the buyer decided to buy another house. At that sale price we would have been slightly above where we bought it in late 1999. Slightly above. If we HAD to sell it tomorrow, I have no idea what the price would be, but likely down from our 1999 purchase point. I have been told that if there is basically anything wrong with the house, there is no bid, unless it represents a true bargain.

Now on the buy side. We looked at brand new construction in Park City and we had endless homes to choose from. For most of the homes we liked we were told, just show a bid, which would likely be substantially below cost. Now for the perfect house, in the perfect location, you will of course pay more, but again, endless homes to choose from.

So what does all this mean? The housing market will be a mess for a while as the main buying season is NOW so one can move before the kids get back to school. Not only is there way too much supply, distressed sellers, and massive numbers of bank owned properties, but with unemployment continuing to rise more and more people will find themselves unable to make payments. The downward cycle of deleveraging, falling asset prices and mounting losses will continue. The powers that be are doing what they can do: pressuring banks to modify loans, continuing to pump money in to the system at all levels, supporting the financial institutions and keeping mortgage rates low. The reality is however that the problems will continue for the foreseeable future.

This is the key reason why I continue to be negative on the US equity markets in particular, and the global equity markets more generally. In the US where 70% of our GDP is consumer driven, how can earnings continue to be anything but bad. The consensus seems to be to expect $40 S and P earnings ( Kostin – GS) for 2009, with at the current level of 910, is anything but cheap. ( 22 times trailing) The real question is of course what will 2010 look like? The housing market at these point is intimately connected with the employment outlook, and again, not good. Over 6 million jobs have been lost since this recession began, so not only do we need to add those back to get back to where we are, but we need to add 125,000 per month just to keep up with new entrants. Where are those jobs going to come from? Mauldin estimates that if you include the underemployed our unemployment rate in this country is already at 15%. 15%. The strain on our system that will cause will be almost unprecedented.

I could easily write another story like this one on the commercial real estate market but I will save that for another day.

And don’t even get me started on this countries unfunded liabilities! In an OPED over the weekend called “Don’t Monetize the Debt”, the WSJ quotes the Dallas Fed saying that “we believe the unfunded liabilities of retirement and health care obligations total over $99 trillion.”

So there you have it. I am still very negative and hope that I prove to be wrong. If you want to read another opinion of where we are now by a guy a lot more experienced and connected than I am read the piece in the current issue of Business Week by Mohaamed A. El-Erian of Pimco called “The New Normal” or the bigger piece he wrote linked below. He ends it this way – “In short, the world’s economies are in an era whose troubles will go well beyond just a flesh wound.” For his more detailed monthly commentary click here. Click here and here for Bill Gross’s most recent ones as well. Both are must reads. Check back to this site regularly, these commentaries are about as good as it gets.

Investing in Women and Investing

Yesterday I had the pleasure of speaking on a panel with Chris Grumm, President of the Womens Funding Network, and Ana Oliveira, President of the New York Womens Foundation. The topic? Investing in Women. Why and Why Now? What does that really mean to me? It means this – seeing that providing access, opportunity and resources to women, as a movement, as a collective, is a way to create a more just and equitable world.

That belief came to life last night at the Ms. Foundation dinner in celebration of Gloria Steinem’s 75th birthday. Two women leaders, Gina Womack and Kirbie Platero, told their stories of how grants from this foundation has transformed them and their communities. “The Ms. Foundation supports the efforts of women and girls to govern their own lives and influence the world around them. Through its leadership, expertise and financial support, the Foundation champions an equitable society by effecting change in public consciousness, law, philanthropy and social policy.” The room was full to the rim, and you could feel the change happening. You could feel the transformation happening. It is about this investment model really taking hold. It is about people with resources coming to understand why funding in this manner, really makes sense. I am going to work on a few opeds on this subject and I cannot wait to share them.

As for the markets … I have not written about them for a while as I have had so much going on in other spaces but if you get the newsletters I have suggested in the past, in particularly John Mauldin’s ( see link), I would just say “I agree with what he says.” I believe that we are a long way away from the problems being over. A long way. We may be through the worst part of the ‘financial crisis’ but we are still in the early innings of the economic crisis.

I am heading to the airport in minutes but while on the plane over the weekend I am going to write a longer economic commentary for posting next week.
Have a great long weekend!!!