Single-handedly, the financial markets have done something to America and the world that the attacks of 9/11 failed to do….bring the country and the world to its financial knees. After 9/11 when the markets opened, they sold off…yet over the course of a few months they stabilized and rebounded. Not that I don’t believe the same thing will happen again, but this time the depth of the drop teetered on creating another Great Depression.

Down the streets, within each coffee shop, around all the malls, if you listen closely you will hear that because of this current crisis, temporarily trust in the system has been severely damaged. Through the years from time to time I’ve talked to people who have lived through the Great Depression of the late 1920’s and 30’s…consistently they have told me that their view of money and assets was greatly changed by that huge downturn. Money, in many cases, was looked upon as something that one minute lay in your hands, and the next, was snatched from your view. We will get through this financial crisis, but some will never forget what they lost, and what happened.

Trust, you may ask? What trust is that? Well, trust in the markets, trust in the banks, heck, trust in the whole overall system. Crazy as it may seem, a few brilliant people came up with a strange notion that you could give people homes, never checking if they could make the monthly payments to stay there. I heard a story on television that at first I could not believe. A man went into a mortgage company seeking a mortgage for a house he was hoping to buy. The sales agent informed him that it would take a deposit of $1200.00 to secure a mortgage on the property. Then, without batting an eyelash, the agent said “Hey, would you like two homes? It can be arranged. Let’s put $600.00 on two properties, and over the next year the two properties will greatly increase in value.”  Folks, this works well as long as properties continue to increase in value…unfortunately, what happened was that the bottom fell out of the housing market, because supply greatly exceeded demand. The man lost both homes, and now his credit rating is close to zero. The man, as they say, “didn’t read the fine print.”   I guess he didn’t bring his microscope to the meeting.

While all of this is going on, there is a ton, and I mean a megaton of cash waiting on the side for what the experts call “The Bottom,” in place in the world markets. Granted, at the bottom, nobody rings a bell…but many experts believe if we are not there, we are really close. When it looks like the collective conscience of the market feels that the bottom is in place, no one is going to want to still be on the ground when the rocket ship takes off. Sadly, those who need the money the most consistently sell at the bottom, out of fear.

Trust will be restored…many will never forget what has happened…yet we will look back on this time as another chapter in the boom and bust nature of humanity. I keep hearing this Holiday Season will be the worst in decades….strangely, each time I visit my local mall, it is jam packed. If the dire prediction is to hold true, there are a lot of people just wandering around looking in stores and buying nothing…I don’t think so! Once the shock of the market crash starts to dissipate, we will stabilize and slowly head back up, with a few important lessons that I hope we never have to re-learn.

Onward and Upward,

Jennifer Avalon

© 2008 Jennifer Avalon

 

How many times in our lives have we heard the saying, Save it for a rainy day? For some, over and over again. With the financial crisis now circling the world, Save it for a rainy day, means more now than ever.

During the summer we always know when a heat wave hits, eventually storm clouds form to bring it to an end. On the other hand, when a storm is howling, after a period of time has passed the clouds break and the sun shines. Why then financially do we think the rules of nature do not apply? The stock market is quite cyclical…so too is the housing market. I know, this time the buffoons did quite a bit of damage…but the rules of nature still do apply. Still, humanity has a hard time believing that sun and rain are two sides of the same coin.

Many are asking themselves out there, how worse can things get? Well, short of the world coming to an end, we should be close to the bottom of this madness. Why do I call it madness? Because of a strange dilemma of human emotions. When the market is sky-rocketing, a fever grips the community where people can’t buy enough stocks fast enough….hey folks, this is what’s called, Buying at the top, and it can be a long way down. On the opposite end of the spectrum, when people are dumping their stocks at a feverish pace, where they can’t get out of their positions fast enough, this is called, Selling at the bottom. Our emotions tell us to buy when things are wonderful, and sell when things are horrible! It’s crazy….but the opposite, I believe, is true.

As we speak, there are trillions of dollars waiting on the sidelines for all the sellers to exhaust themselves. At that moment, it will look like a cattle stampede to get back into the market. Sadly, it is many of those who need the money, who sold their shares last. Is it truly the rich get richer? Or do cool heads prevail…..

So what do I mean by Save it for a rainy day? When things look like they can’t get any better, take a little off the table, and put it in an emergency fund, for when the rain comes….it always comes.

I remember during the dot.com madness in year 2000, many companies that made no earnings were bid up to astronomical levels. A floor manager on Wall Street remarked, I’ve been here 40 years and I’ve never seen anything new…the same things keep happening over and over again. This was before the housing bubble…well friends, it just happened again! And like the housing mess we are in now, it too will pass, with something else or a new fad waiting to take its place.

The sun shines….the rains come….and the sun shines again. Until the world ends, always keep an umbrella handy, just in case.

Be calm,

Jennifer Avalon

© 2008 Jennifer Avalon

All around us the storm is raging….financial, natural, and unnatural. Many of us in one way or another have been touched by a storm these past couple of months. As we may know, the storm has yet to subside, but as long as we have faith that out there somewhere is a lighthouse swirling a beam to bring us home, there is a better than average chance we will make it back to shore safely.

The Lighthouse….maintained and run by the light keeper, fully aware that out across the sea ships search for a beacon of hope and guidance. These days more than ever we too look for the guidance from the lighthouse. Storms come in all shapes and sizes, affecting the few, and the many….still, the lighthouse never wavers, never goes out, and never gives up. Within each storm there is always the feeling that there has never been one like this before….perhaps, or perhaps not. One thing is for sure, there have been storms before and many have survived and come through stronger. Tonight and every night, always keep an eye out for the beam of the lighthouse….it shines for you, and for me.

Some ships around us may be taking on much water and are in a state of peril. If possible, reach out, make room on board your ship, and give them rest. The waves have a strange way of helping those who are lost, be found. The brave and the faithful always grow stronger with a storm. Sometimes when it is most dark, all of a sudden out the corner of our eyes we spot it….a beam of hope that swirls around to guide us into safety.

Sail on sailors….battle on through the storm….and keep an eye out, for as we are looking for it, the lighthouse is looking for us. Like all storms, the ones we face today too, shall pass. We will have time to look back and wonder why it happened…but that is for another day. For now, we search, we reach out, we scope the horizon, waiting for the lighthouse to deliver us to peaceful waters.

Sail on,

Jennifer Avalon

© 2008 Jennifer Avalon

Every time I think it’s different, I’m always reminded by something happening currently that the world is not black, nor white, but grey. There are those on one side, those on the other, and those in the middle…over and over again, it falls to the middle ground to determine the outcome.

Case in point…the upcoming American elections….on one side Senator Obama…on the other, Senator McCain. The polls show that most people have lined up in support on either side…all that is left are the Independents…those people that each election cycle can go one way or the other. In this case, the Independents are the Grey Zone…they, the experts say, will surely determine the outcome of the elections. The Independents, or Grey People, are never locked into a party or ideology…they walk the middle ground. They view the landscape, see what they think is needed, go into the voting booth and pull the lever. Obama and McCain are fully aware that unless they reach and convince the Independents, they have no chance of winning, no matter how many supporters they have accumulated. This year, with the polls showing that the candidates are in a dead heat, the Independents have never been more powerful.

Wars, conflicts, economics, competitions….the Grey Zone People always hold, in their hands, the ultimate outcome. Grey Zone People are always fluid….never locked in their opinions, constantly looking at both sides of an issue to render a decision. Many feel they are the ones that keep everything in balance.

What the other two sides find quite frustrating is that they can’t always rely on Grey Zone support…each time they have to go out and earn it, which sets both sides crazy. Just because they are on one side of an issue, it doesn’t necessarily mean that they will always be on that side on every issue. They can vote Democrat one year, Republican the next…be a Yankee fan, and then all of a sudden, be a Met fan. The Greys, or Independents, cannot be easily defined….and they like it that way.

Black, White, or Grey….we all have to ask ourselves one time or another, which one are we? One thing’s for sure….you kind of have to admire the Greys a little….they are what they are. They may agree with you on one issue, and argue with you for hours on another. Whatever subject or topic you bring up, you never quite know for sure which side the Greys will be on.

This election cycle, like many before, Senator Obama and Senator McCain have fully entered the Grey Zone.

Vote,

Jennifer Avalon

© 2008 Jennifer Avalon