Investments & Markets What's hot, what's not & where are the markets going? Critical information for Butches & Femmes who want to further empower themselves economically.
Market Commentary August 12, 2009 By Madison Hall
Well it's been a long, hard road from there to here on every financial front - job losses in the millions, epic housing foreclosures, credit tightening, and the hard realities of just survival during the worst economic crises in the U.S. since the Great Depression. Food Banks are overwhelmed, many people now face or are experiencing foreclosure and homelessness, and a sense of despair is engulfing the many in our butch femme community who have been brought to their knees by this tsunami of financial destruction.
If you took my advice more than a year ago, you battened down the hatches, saved a few dollars under the mattress and tried to create a second income for yourself before you lost your first. I have no illusions that most of you were able to do this. Since we know that discrimination of overtly gender non-normative people (read butch here) is rampant in the workplace, I would not be surprised to learn that many of our community were swept up in the first and second waves of company-wide layoffs. From a legal perspective, companies are fairly exempt from suits of a discriminatory basis if they "clean house" of undesirables who are gay during a general layoff. So it makes sense that many in our community have been impacted.
I would urge all of you to stay stong, do not give up hope of reinvention, even after being broken and potentially declaring bankruptcy, losing houses, jobs and dreams. Do not give up your dreams or dreaming of reinvention and recreation. It is the only sane option and begins that phoenix-like process of rising from the flames. Do you have a special talent, skill or ability that you could use to make a new income or rebuild yourself? Dive into it if possible. Take advantage of all government retaining and educational programs. I have many friends who have returned to school and are living on student loans, reeducating themselves, finishing undergraduate, Master's and getting Ph.D's right now. They are hiding out, gaining valuable educational certifications, knowledge and experience, so they'll be able to hit the ground running in a few years when things slowly improve in our economy. Some states have worker reeducation programs where some aspect of your education is paid for by the state if you were laid off. TAKE ADVANTAGE OF ALL THESE PROGRAMS, PEOPLE. Do not give into dispair, drug and alcohol use to numb your pain. You must stay ready and NEVER GIVE UP HOPE. Our grandparents and great grandparents lived through the Great Depression when unemployment reached 25%. They survived. We will survive.
Now, for those in our community who are well off, comfortable and have a little or a lot to spare, I urge you to contact your local lesbian and gay centers and either organize to setup a food bank for our community or give generously to programs that exist. Step up and be counted, make a difference, you may be saving a life, or even lives. Some within our community could even create new jobs - each of us must do more than we dared to dream and dig deeper than our comfort level to keep our community intact. And for those with money, well, I believe you have a moral responsibility to give back to the world in general and to our community specifically.
MARKET TALK The major equity indexes have bounced back 50% from their lows. However, that does not create the millions of jobs that have been lost. It's typical of markets to lead the way. However, with housing still in major trouble, and with unemployment benefits set to expire for many, another wave of foreclosures for those who have been barely hanging on could set in. We could experience another sickening decline. I don't think unemployment benefits will be extended indefinitely, and I also don't think millions of jobs will be created across the spectrums of loss that will allow us to dodge another downward spike in foreclosures and abandonment. What to do? Restructure and eliminate unnecessary expenses across the spectrum in your personal finanes. Batten down the hatches, because we are in for more rough shocks. It's not too late to look for a 2nd job even as a checkout bagger somewhere...get that extra money. Period. Get rid of that ridiculous cell phone plan that costs too much. Pack your lunch. Bake cakes for extra money - whatever.
We are a long way from the inevitable spiral of inflation that must follow such enormous amounts of cash being injected into our economy, but it will come, at some point. If you have a mortgage, try to refinance it to a lower rate and lock in at these historic lows. Join a credit union and get rid of any banking that has monthly fees. Cash is still king. Interest rates on bonds are so low that I would just park any cash not needed in a money market account. If you've made some significant gains in the market since its lows, you may want to take profits. If you've been riding it out from top to bottom and back again, keep hanging tight. Historical price charts show that within 5 years of a major bottom from a crash, major indexes return to their highs. (NOTE: this is the historical patten, but not a guarantee).
Ok, try and think about positive reinvention, focus on those you love, and support our community - because when the chips are down, we are, really, the only family we have.
Market Commentary April 8, 2008 By Madison Hall You Need a Plan ENERGY, METALS & INFLATION
Energy prices as reflected in Crude Oil appear to be headed toward additional gains. This is worrisome on the inflation front, as the word "hyperinflation" has been bandied about in certain circles (think 1970's). The drop in the U.S. dollar against other currencies has caused a general flood into commodities and precious metals. Gold continues to look strong. Currently around $915, gold may consolidate here before moving higher. Gold fund traders with excellent track records are looking for gold to move ultimately to $1,500 per ounce.
DOLLAR It has been said that the level of the U.S. Dollar as it trades against other currencies is a reflection of the current state of confidence global currency traders hold regarding the fiscal policies of the U.S. So, judging by how low the dollar currently trades relative to other currencies, I'd say the confidence vote is fairly low.
FOODSTOCKS & BIOFUELS Another inflationary factor is the use of foodstocks such as corn and other grains for the production of biofuels to offset petroleum dependance. This has raised the specter of higher food prices from bread to eggs to milk to chicken.
Developing countries around the world are beginning to experience the first reported waves of food riots and unrest - a politically destabilizing factor of potentially critical magnitude. Populations that are hungry tend not to support political regimes. The fall of the French Monarchy can be linked to years of cold climate in Europe, resulting in crop failures and the inflexibility of the peasant population in adopting the common potato, newly introduced, as a food staple, unlike other countires which avoided those political extremes during the same era.
INTEREST RATES Add to this a falling interest rate environment in the U.S. in the face of global inflationary forces (China's manufacturing expansion, for one), while banks holding billions of dollars in subprime mortgages scramble to borrow from the Federal Reserve or sell those investments at 90cents on the dollar as Citicorp is now doing, to improve liquidity. Major forces are at work on the Domestic and International stage, and their interconnectivity can only be ignored at the investor's peril. Meanwhile, in the U.S., and now abroad, the subprime mortgage debacle is taking millions of homes into foreclosure, making mortgages much more difficult to obtain, and credit card rates are being ratcheted up on existing borrowers even while credit lines are being shut off or severely limited.
BIG PICTURE & YOU So, we have global inflation, higher food and energy prices, falling housing prices (so a loss of basic equity for most owners), reduced credit availbility, an economy in recession, so job cutbacks are everywhere, and a banking system that is being sandbagged mightily by the Fed in the hopes of staying the rising waters and avoiding any domino-effects like those represented by the recent fall of Bear Stearns.
For you, this means you're paying higher prices for things you can't live without - gas in your car, energy for your home, and food to eat. For many, your house is either underwater (you owe the bank more than it's worth), your mortgage interest rate has recently or is about to be readjusted so that your mortgate payment is about to double, or your home equity line of credit has just been reduced (or is about to be).
Leaving you with only your job (if you still have one), your savings (lucky you - that rainy day is approaching), your investments that are possibly battered but relatively intact (your 401-K & IRA's) and basically untouchable, and of course, your mortgage or rent (renting looks pretty good to many, now), credit card bills, which might be higher than ever with raised rates. (Read the fine print, they can raise the rate on you even if you've only been delinquent on another, unrelated card).
What it means is that bad times have come or are on the horizon for many, and it's time to batten down the hatches, pull in your horns on spending on non-essentials, and looking ahead to things getting, perhaps, worse before they get better. Might be time to look for that second job or establish that cheap to start home based business. It's also time to plan for your needs during the next year, and if it revolves around borrowing money from your home equity line of credit, do it now before they turn off the tap.
SURVIVAL STRATEGIES If possible, pay off the highest interest rate credit cards, take the less expensive vacation (or none), buy the used rather than the new car, or better yet, repair the broken vehicle - a repair is a one-time expense, vs. the continued payments on a vehicle. And don't lease a vehicle, please. You never own anything in the end, and you pay for the privilege of doing so.
If you cannot economically survive in your home or lifestyle without the two incomes you and your partner both contribute, now's the time to strategize about how to survive on only one income.
So, in sum, things are going to get worse before they get better. Don't squander the opportunity to prepare to weather the storm. Because history tells us that eventually, things do improve, prepare to take advantage of opportunities that may emerge from this scenario.
TIME TO START THAT HOME BUSINESS If you have any handy-man skills and basic tools, perhaps you can be the cheap repair person that many people need, making side money and undercutting the more expensive higher end contractor's prices. What about doing painting? Perhaps you can start a lawn service (you only need an old pickup truck or van), a cleaning service, a cat-sitting and dog walking service. Maybe you can start your EBay business that you've always been talking about. Think creatively about the skillsets you have that are not being tapped into, and put the wheels in motion.
WORST CASE SCENARIOS - LOOK TO THE FUTURE - YOU WILL MAKE IT For some of you, hard times have already hit and you're considering bankruptcy, foreclosure and walking away from your house. You may have lost your job. To you I say, do not give up hope. Opportunities are always presenting themselves, and remember, opportunity favors the prepared mind. You will move forward with your life and rebuild - it can and has been done, and you will do it too. You will do it one step at a time, and you will later marvel at the wealth of personal fortitude you can tap into when needed.
YOU'RE FINE, BUT HOW CAN YOU HELP THE BF COMMUNITY? Let's say you're doing just fine, and you'll weather the impending storm - no problem. Now you need to ask yourself how you can assist other members of our community who are struggling. The Butch Femme Community has its fair share of wealthy and successful people - how can we fully engage together to find answers that will economically empower and provide opportunity, and at least provide a ground floor and solid footing for the less fortunate amoung us to step up and thrive. Let's start talking about how to do it. Because from where I sit, I don't see other societal groups reaching out to put their arms around us. We need to take care of our own, period. So start thinking of ways to do it, and then act on it.
Now let's all get to work and get our personal finances in order for the rising tide.
All Market Commentary is based on personal opinion only, and should not be construed as advice, or offering advising or financial services.