Stedman Graham appears to have led a charmed life. The south jersey kid found early success in sports, basketball in particular. The world knows him because of his long time relationship with one of the most famous people on the planet. But don’t let looks fool you. Graham coasted in school and mentally checked out in life (just like the rest of us) before he did an about face and decided to write his own script in life. He has defined who he is and what he wants from life, that has helped him survive and thrive in the fishbowl he has lived in for 2 decades. How did he do it? Read for yourself?

 

Stedman Graham: I think there is a process for leadership and I think it starts with self-leadership first, just having the discipline to get into certain habits. We live in a world where we do the same thing over and over every single day and the educational system teaches us how to memorize, take tests, repeat information back and we forget it. There is no process for developing a strong identity. In leadership you need a strong identity. You need to know who you are, where you are going
and how you are going to get there.

I wasn't a thinker in school and didn't really understand the meaning of education. I had a race-space consciousness. I thought I could make it because of the color of my skin. I realized it's not about the color of
my skin. I didn’t understand the process of how to make it. I had never been thought to think.

Mary Caraccioli: With this process comes self-accountability. When you hold yourself accountable for your actions, you take away the power for someone else to hold you back, right?

SG: A lot of people know me based on my relationship with Oprah. So then I am put into a box by that. So you are defined by labels and you have to know how to get out of the box and not be defined by how other people see you, but change your thinking about how you see yourself. You are waiting for something to fall out of the sky, but it's never going to happen, because you don't move you don't grow, you don't develop, you don’t think, you don’t evolve and you can never maximize your potential as a human being.

I don’t care if you are smart; go to Harvard, or Yale. You may make a little bit more money, but a lot of time you are still in that box, still in that room pushing papers. You will never maximize your potential as a human being because you don't know how to take information and education and make it relevant to you heart and soul. Leaders understand that. Followers don't. 

MC: We are in a recession now. We will be in one for a while, probably the most painful one we’ve seen in a generation. When the circumstances are the most dire, can you still do this?

SG: You can diversify based on what you can do. It's not what you can't do. It is what you can do. You have a brain, so you have to rethink what the possibilities are. You have to control your life and be more accountable. That is the message that is sent today that what you have to do is take more control of your own life. There is no security in the corporations, not like there used to be. You will have 17 different jobs. After you hit 65 you may think you can retire, but you may have to go back to work because the prices are so high. So you have to focus on within. You have to not focus on the external world, because the external world will define your existence. That is why I love the nine-step process. The power is within yourself.   The security is within yourself. Invest in yourself; so you have the ability to figure out what to do in case of these kinds of situations come up.

MC: So you have to learn who you are, what you are passionate about and then look at the environment in which you want to play and say, “How do I apply what I have to make it work?”

SG: That is exactly right. That to me is the secret to success. It is the secret to eliminating I can't make it because I'm a woman and I live in a man's world. It is the secret to my parents didn't have a lot of money.  It is really being able to understand where is your foundation for growth? What does it look like? How do you take all the info in the American free enterprise system and make it relevant every single day because that's the only thing that makes us all equal.  Everybody's got 24 hours; the question
is what do you do with your 24 hours?

MC: Finally, how did you develop this? What fed that nine-step process?

SG: I was trying to get out of slavery. I was trying to get out of being a follower and become a leader. I knew I had the desire to want to be somebody, and help other people, but I didn't know the process for doing that.  I didn't understand “what you focus on expands.” Everybody can do it if you have a process that you can follow. It took
me a long time. It took pressure. I had to think. I get a chance to save myself from a world that's trying to put me in a box. I get a chance to explore. Ladies and gentleman, let me just tell you, freedom is work. Freedom takes a long time. It takes focus, work, a belief in yourself. If you take care of you, you can take care of your family, friends, community, business associates because you are a leader. That is what it's about. Leadership is everything.

Financial  Crisis: A Conversation with Steve Forbes

By  Mary Caraccioli
October 8, 2008
This morning Central Banks around the globe pulled off the difficult feat of a coordinated interest rate cut. The idea behind the cut is to help thaw the frozen credit markets. Banks won’t lend because they don’t have confidence that borrowers (including other banks) will pay them back.  The result is the worst financial crisis we have seen since the Great Depression.  This morning’s choreographed global show of unity by the central banks, was supposed to help kcik start the flow of money by making it more profitable for banks to lend money.  However, the stock market freefall continued. The Dow Jones Industrial Average sank another 2%.  After the markets closed I spoke with Steve Forbes about the crisis, investing and politics.

Mary Caraccioli: YOU’VE BEEN A STUDENT OF THE ECONOMY AND THE MARKETS FOR MANY YEARS. BUT MANY AMERICANS HAVE JUST BECOME AWARE OF THE INTERSECTION BETWEEN WALL STREET AND MAIN STREET IN THE LAST FOUR WEEKS. LET'S PUT THIS INTO PERSPECTIVE...WHERE ARE WE RIGHT NOW IN THIS CRISIS?

Steve Forbes: THAT DEPENDS ON WHERE THE GOVERNMENT GOES FROM HERE. AS YOU
KNOW THERE'S BEEN A HUG SELL-OFF IN THE PAST YEAR. THE MARKET HAS LOST
30-35 PERCENT OF IT'S VALUE. HANK PAULSON'S ANNOUNCEMENT THAT IT'S
GOING TO BE WEEKS BEFORE HE GETS THIS 700 BILLION DOLLAR BAILOUT GOIN
WAS A REAL DOWNER. WHAT HE SHOULD DO IS TREAT THIS AS AN EMERGENCY NOT
JUST A CORPORATION AND START PUTTING THAT MONEY TO WORK RIGHT AWAY,
EVEN IF IT MEANS BUYING PREFERRED STOCK WHICH HE'S ALLOWED TO DO. YES
THEY'LL HAVE CONGRESSIONAL HEARINGS FIVE YEARS FROM NOW, BUT WE ARE IN
AN EMERGENCY AND YOU TAKE EMERGENCY MEASURES. THE OTHER THING THAT
REALLY MATTERS IS IF THE SCC AND THE TREASURY FINALLY BURY MARK TO
MARKET WHICH HAS ARTIFICIALLY LOWERED THE VALUE OF STOCKS BETWEEN THEIR
REAL WORTH AND A FIRESALE PRICE. THAT HAS WREAKED HAVOCK ON COMPANIES
LIKE LEHMAN BROTHERS AND AIG. CONGRESS WANTS THAT RULE REPEALED YET
CONGRESS DRAGS ITS FEET. IT SHOULD DEAL WITH RIGHTAWAY AND MARKET WILL
SURELY TURN.

MC: BEYOND THE AUCTIONS THERE ARE THINGS HE CAN DO RIGHT NOW.
 
FORBES: WELL HE'S GOT SOME FLEXIBILITY AND I DON'T KNOW WHY HE THINKS
IT TAKES SEVERAL WEEKS TO SET UP AN AUCTION PROCESS. THE TREASURY DEPT.
MANAGES THE NATIONAL DEBT WHICH IS THE 10 TRILLION HELD BY THE
PUBLIC...SO THEIR DOING AUCTIONS FOR MONEY MARKETS EACH AND EVERY DAY
WHETHER IT'S TREASURY NOTES OR TREASURY BONDS...THOSE ARE ONGOING
OPERATIONS, SO I DON'T KNOW WHY THEY DON'T GRAB SOME PERSONAL AND START
IT WITH THIS OTHER PAPER....JUST DO IT.

MC: LET'S TALK ABOUT YOUR SECOND POINT. MARK TO MARKET. AN ACCOUNTING
RULE MEANS THAT COMPANIES HAVE TO MARK THEIR ASSETS TO THE MARKET
PRICE. YOUR ARGUMENT RIGHT NOW IS GET RID OF THAT RIGHT NOW SO THEY CAN
MARK THESE AT A MORE REALISTIC LEVEL.

FORBES: THERE IS NO MARKET. IT WOULD BE AS IF YOU HAD AN AUTOMOBILE AND
SAY IT'S WORTH 10-THOUSAND. AND YOUR TOLD YOU HAVE TO SELL IT IN THE
NEXT FIVE MINUTES WHAT KIND OF A PRICE DO YOU THINK YOUR GOING TO GET
FOR IT? WELL THAT'S WHAT'S HAPPENING HERE.
IF YOU TAKE THE 500 MILLION BANKS HAVE WRITTEN OFF...ALMOST ALL OF THAT
IS BOOK WRITEOFFS. NOT CASH. LEHMAN BROTHERS WAS CASH POSITIVE TO THE
END. YOU'VE GOT TO GO OUT AND RAISE NEW CAPITAL WHICH PUTS ENORMOUS
PRESSURE ON COMPANIES. SO IT DESTROYS INNOCENT COMPANIES.

MC:  LET'S MAKE THE ASSUMPTION YOU GET THE SEC TO DO EXACTLY WHAT YOUR CALLING
FOR.... ARE YOU CONCERNED ABOUT THE UNINTENDED CONSEQUENSES
THAT MIGHT OCCUR IF MANAGERS HAVE MORE DISCRETION AND A LITTLE LESS
TRANSPARANCY. AFTER ALL THIS IS A CRISIS IN CONFIDENCE.

FORBES: WELL THAT'S THE THING NOBODY STILL KNOWS FOR SURE WHAT'S REALLY
THERE. IF YOU MARK THIS DOWN TO SO CALLED MARKET YOU'RE GOING TO
DESTROY A COMPANY SO THAT'S A GREENLIGHT TO THE SHORT SELLERS. IF WE'D
HAD THE RULE IN PLACE IN THE EARLY 1990S MOST OF THE LARGE COMMERCIAL
BANKS WOULD HAVE BEEN DESTROYED. WE WOULD HAVE HAD A GREAT DEPRESSION
IN THE 1990S WITH THIS RULE. SO THE KEY THING IS TO HAVE THE MARKET
CONFIDENT THAT THESE COMPANIES ARE NOT GOING TO BE ARTIFICIALLY PUT OUT
OF BUSINESS. THEY WON'T FEEL THAT THEY HAVE TO HORDE THE CASH...THEY'LL
FEEL THEY CAN FUNCTION LIKE BANKERS AGAIN.

ANOTHER IDEAL THING WOULD BE IF THE FED ANNOUNCED WHEN THIS THING IS
OVER...IT IS GOING TO WORK POSITIVELY TO MAKE SURE THE DOLLAR STAYS
STRONG AND IF THE TWO PRES. CANDIDATES WOULD ANNOUNCE THAT YOU'RE GOING
TO GET BIG REAGANESQE TAX CUTS THIS CRISIS WOULD BE OVER IN FIVE
MINUTES.

MC: YOU RAN FOR PRES IN 1996 AND 2000...ARE YOU SORRY YOU DIDN'T RUN
AGAIN GIVEN THE MAJOR CHANGES WE ARE SEEING IN THE FINANCIAL INFRASTRUCTURE AT THIS TIME.  YOUR TAX PLAN MAY HAVE MORE OF A CHANCE OF GAINING TRACTION IN THIS ENVIRONMENT?

FORBES:  NO  I GAVE IT A TRY. IT'S ONE THING TO THINK WELL THIS IS AN
IDEAL ENVIRONMENT...QUITE ANOTHER TO GET OUT THERE AND DO THE JOB AND
SO I GAVE IT A SHOT.  TRIED IT TWICE, NOW I'M TRYING TO GET OTHERS TO DO
IT...TRYING TO EDUCATE, AGITAGE AND IT'S AMAZING....25 OTHER COUNTRIES
AROUND THE WORLD HAVE TRIED THIS TAX SIMPLIFICATION HAS WORKED
EVERYWHERE IT'S BEEN TRIED AND THE AMERICAN PEOPLE WOULD APPLAUD ACROSS
THE BOARD. DEMOCRATS, REPUBLICAN INDEPENDENT. THEY ALL KNOW THIS TAX
CODE IS A HORROR. A REAL DEADWEIGHT ON THE AMERICAN ECONOMY.

MC: AND OF COURSE IF PEOPLE DON'T KNOW...STEVE FORBES IS A LONG
PROPONENT OF THE FLAT TAX.

MC: NOW LET'S MOVE BACK TO INVESTMENTS AND THE STOCK MARKET. HOW
CLOSE DO YOU THINK WE ARE TO A BOTTOM?

FORBES:  I THINK PRETTY CLOSE TO A BOTTOM. PEOPLE WHO NEED THE CASH HAVE
SOLD IN DISTRESS AND THAT'S PEOPLE'S MOODS ARE GETTING DARKER AND
DARKER AND THAT'S USUALLY A TIME WHEN THE MARKET IS REACHING A BOTTOM.
SO IN TERMS OF A OF BOTTOM AT LEAST IN THIS LEG...I THINK WE'RE ALMOST
AT IT IF WE'RE NOT AT IT ALREADY. THERE ARE REAL BARGAINS OUT THERE.
THERE ARE SURVIVORS IN THE FINANCIAL INDUSTRY. THERE ARE SOME VERY BIG
COMPANIES OUT THERE SELLING AT DISTRESSED PRICES. YOU LOOK AT OTHER
INDUSTRY.  LOOK AT BOEING. FLUSH WITH CASH SELLING AT BARGAIN PRICES.
LOOK AT WHAT WARREN BUFFET IS DOING. HE'S A SMART GUY. HE PLUNKED 3
BILLION INTO GE...5 BILLION INTO GOLDMAN SACHS. HE'S PROBABLY LOOKING
AT OTHER BARGAINS OUT THERE.

MC:  IS THERE ANY SECTOR THAT'S IMMUNE TO THE DOWNTURN?

FORBES: YOU MAY FIND PIECES HERE AND THERE. YOU LOOK AT RETAILING. WALMART IS GROWING A LITTLE BIT...NOT MUCH BUT PEOPLE DO BUY THINGS.  IT MAY NOT BE LUXURY ITEMS... BUT PEOPLE DO BUYTHE ESSENTIALS. YOU MAY FIND MOVIES YOU MAY FIND SOME FORMS OF ENTERTAINMENT THAT MAY DO WELL IN THIS ENVIRONMENT.  EXPORT MARKETS
THAT ARE STILL WORKING MAY DO OK.  BUT OVERALL IT'S A REAL DOWNER AND
IT'S NOT THAT THE ECONOMY WAS INHERENTLY BAD BEFORE THIS CRISIS
HIT... WHAT WE HAD WAS FREEZING UP IN CREDIT. IT'S SIMILAR TO WHAT YOU'D
HAVE IF YOU COULDN'T GET WATER ANYMORE. THE RESERVOIR IS FULL...BUT THE
PIPES ARE CLOGGED.

MC: HOW LONG WILL THIS DOWNTURN LAST?

FORBES: THE BASIC STRENGTHS OF THE ECONOMY ARE THERE...BUT WE WILL BE
IN A RECESSION THIS QUARTER. I THINK IT STARTED IN SEPTEMBER IF NOT
AUGUST...IT WILL GO TO EARLY NEXT YEAR, BUT THEN THINGS SHOULD START TO
REALLY IMPROVE.

MC: WHAT ADVICE WOULD GIVE THE SMALL BUSINESS TO GET THROUGH THE NEXT
NINE MONTHS SUCCESSFULLY?

FORBES: WATCH THAT CASH FLOW AS NEVER BEFORE. SMALL BUSINESS PEOPLE
KNOW BETTER THAN BIG COMPANIES WHICH IS WHY SOME BIG COMPANIES GET IN
TROUBLE. CASH FLOW IS THE BE ALL END ALL.

MC: HOW DO WE GET AN END TO THE HOUSING CRISIS?
FORBES:  WELL I THINK WE'RE NEAR A BOTTOM NOW. BEFORE THE CREDIT CRISIS
HIT, WHICH COULD  HAVE BEEN AVOIDABLE. IN CALIF. BANKERS WERE NOTICING
THAT WHEN THEY SOLD FORECLOSED HOMES...THE NUMBER OF BIDDERS THAT WERE
COMING WAS GOING UP...SO THE BOTTOM WAS BEGINNING TO BE REACHED. IF WE
JUST GET A FEW THINGS MOVING...THIS THING WILL START TO HEAL.

MC: ALL RIGHT THANKS. ALWAYS GREAT TO HAVE YOU.

FORBES: THANKS MARY!

 

 Bailout Redux

by Mary Caraccioli

If you watched yesterday's vote on the bailout plan by members of the house and the ensuing 777 point drop in the Dow Jones Industrial Average, you may be wondering whose jobs members of the house are trying to protect, yours or theirs.  To me its obvious, they are more worried about getting re-elected than keeping you and i employed.  To be clear, the financial crisis hitting us is complicated and it takes some real effort to try to explain it in plain English. But it can be done. I find a way to do it every night on my show. But house members did not even bother to try. They didn't want to look like apologists for Wall Street fat-cats, so they instead decided to let their constituents stay misinformed about the economic storm ahead, a join the chorus let Wall Street hang.

The problem is, its not about those fat cats anymore. The crisis at hand is about you and I and the companies big and small where we work. There is a credit crisis going on. That means businesses are having a very hard time borrowing money. If they can't borrow money, which is part of the normal course of doing business, they will have to at the very least scale back..  That means fewer purchases made, fewer people hired and more people laid off.  If you are a retailer, this is the time you are purchasing inventory for the holiday season. No inventory, no holiday workforce needed. No inventory, no profits. No profits, no business.  See, it really isn't that hard to understand.

The Bailout
The plan should get a new vote Thursday. The Senate should show bipartisan leadership and vote first, sending a signal to the House to vote to protect American jobs — not their own. On Monday no House member did anything to get themselves into a revised edition of Profiles in Courage.

I asked U.S. Rep. Joseph Sestak, D-Pa., a member of the small business committee, if he would call on the Senate to pass the bill (as is) on Thursday. He, in fact, did and also voted in favor of the bill. He said additional sweeteners could get more democrats and republicans on board. Here are two he suggested: Democrats want bankruptcy reform, while Republicans want an insurance plan, so when companies fail, people get their money back.  Economists and small business owners have both told me that if the credit markets remain frozen, business spending will dry up. They rely on lines of credit to continue operations. That means more people losing jobs. I believe members of congress need to be more concerned with the loss of these jobs, than the loss of their own.

If there’s one silver lining, it’s this: The dialogue has started and political posturing we saw Monday now seems as outdated as flipping homes for profit. The dialogue has broadened the public's thinking about the crisis. Two ideas gaining traction are: changing accounting rules and lowering capital gains taxes.  I can see merit with both. However, the crisis at hand is both a crisis in capital (cash) and confidence. Those ideas would help in raising capital but would not help increase confidence.  The banks aren't lending to each other because they don't know "whose next."  With the toxic assets off their balance sheets that confidence will be restored.   That is why I think the bailout package should still be approved.

Still, the reality is that the bailout plan won’t keep the nation out of recession. What it will do is stabilize our banking and credit system so that a recession doesn’t become a deeper and more prolonged economic drain. The White House and Congress did a poor job communicating that to Main Street, and the non-business media showed its lack of understanding of how the system worked, by calling it a Wall Street bailout.

Of course, everyone remains responsible for their personal finances. Given the tough days ahead here’s what you can do to avoid getting burned:

  Don’t put your head in the sand. Know your finances. How much do you owe? What are your payments? What’s in your 401(k)? If you have lots of company stock in a 401(k), don’t dump the shares tomorrow, but devise a strategy to sell shares and create a more diversified portfolio.

  Prepare for a pink slip. Unemployment is rising. Unless you know your company’s balance sheet, you don’t really know how well it can weather this storm. Assume the worst. Get your resume together, start looking for other jobs and cut your household spending as if you’re already fired. If you do get laid off, ask for more. If you are offered a buyout package, ask to have that payment deferred until 2009. It will help avoid an ugly tax bill next year.

  If you are laid off and the markets remain low, talk to your accountant about possibly rolling your 401(k) into a Roth IRA. Taxes will go up, so pay them now at the lower rate and get that money tax free at retirement.

  Communicate! If you get fired or face trouble paying your bills, call your mortgage provider, utility or credit card company immediately and try to get help before missing a payment. There are things they can do now to help you.
 
  Should you switch banks, follow your gut. If you don’t like the new bank taking over your bank feel free to move your accounts elsewhere. Don’t panic. Shop around and select a bank not in the headlines for money problems.

  Don’t seek stock market bargains until you’ve paid off your credit cards. Good credit has never been more important.

  Keep paying into your 401(k). This is when stocks are cheap.