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Showing posts from December, 2008

Reasons to be hopeful about 2009

Advisor Perspectives Magazine interviewed John Bogle about prospects for 2009. Bogle, 79, "is the Founder of The Vanguard Group, Inc., and President of Vanguard’s Bogle Financial Markets Research Center. He created Vanguard in 1974 and served as Chairman and CEO until 1996 and Senior Chairman until 2000." A sample: "Q - What worries you the most about the economy and the markets? A- My number one concern is the freezing of the credit markets, but I am equally concerned with the slapdash way the Treasury is trying to fix the problem. The troubled asset relief program (TARP) should have been called the toxic asset relief program, but they have yet to buy a single asset. They are injecting capital into banks, but are doing so at a very high price. Q - Your book discusses the characteristics of good leadership: nurturing the 'soul' of the organization, focusing on values, and 'pressing on, regardless.' Which leadership skills will be most important for Pres...

Lending facility for mortgage servicers

We note that, according to a recent article in Black Enterprise Magazine , "Through Urban Trust Bank (a black-owned bank), (Robert) Johnson created a new entity, Homeowners First Bank. Homeowners First is an advanced lending facility or a bank designed specifically to provide temporary, advance funding to mortgage servicers. Mortgage servicers are the middlemen, who may or may not be the same company as the lender, but who retrieve money from borrowers on behalf of lenders." We feel this effort may be an attempt to profit, as the Washington Post noted , from the "unprecedented wave of foreclosures, charging distressed homeowners for help negotiating better loan terms -- a service provided for free or for a nominal fee by many nonprofits." We should remember that Mr. Johnson has a history of not living up to promises made to the black community. Since it is irrelevant to the current discussion, we will ignore historical charges against the man , and focus on the bank...

One up, one down

We'll give you the good news first. According to unnamed sources, the FDIC will soon lift a Cease and Desist Order imposed on United Bank of Philadelphia on January 23, 2008. On the bad news front, the FDIC "accused the management of OneUnited Bank, one of the largest black-owned banks in the country, of running an unsound lending operation and ordered a top-to-bottom review of executive perks that included a 2008 Porsche and a housing allowance for a beach-front home in California." Wow. Ouch.

Minority Banks See Clients Through Tough Times

"Tell Me More, December 16, 2008 · Although the federal government is pouring billions of dollars into the nation's banks, minority-owned financial institutions serving African-American and Latino communities face their own unique challenges, such as higher unemployment rates and less access to credit. Bill Cunningham, of Creative Investment Research and Luis Pastor, of the Latino Community Credit Union, discuss helping their clients through economic crisis. See: http://www.npr.org/templates/story/story.php?storyId=98325149 Audio for this story will be available at approx. 12:00 p.m. ET today."

Haven Trust Bank of Duluth, Ga. (Asian) Fails

"SAN FRANCISCO (MarketWatch) -- The Federal Deposit Insurance Corporation said late Friday that Haven Trust Bank of Duluth, Ga., was closed by the Georgia Department of Banking and Finance. The failure not only marks the 24th bank failure of the year, but the fifth in the Atlanta area. The FDIC was named receiver, and Branch Banking & Trust of Winston-Salem, N.C. will assume the deposits. As of Dec. 8, Haven Trust had total assets of $572 million and total deposits of $515 million. The FDIC said that BB&T agreed to assume all of the deposits for $112,000 and assume all of the failed bank's assets for about $55 million."

Minority Banks Receiving TARP Capital - Update

We have updated our listing of minority banks receiving TARP funding: 11/14/2008 UCBH Holdings, Inc. (Asian) San Francisco CA Purchase Preferred Stock w/Warrants $298,737,000 Par 11/14/2008 Broadway Financial Corporation (Black) Los Angeles CA Purchase Preferred Stock w/Warrants $9,000,000 Par 12/5/2008 East West Bancorp (Asian) Pasadena CA Purchase Preferred Stock w/Warrants $306,546,000 Par 12/5/2008 Cathay General Bancorp (Asian) Los Angeles CA Purchase Preferred Stock w/Warrants $258,000,000 Par 12/5/2008 Popular, Inc. (Hispanic) San Juan PR Purchase Preferred Stock w/Warrants $935,000,000 Par Total to minority banks: $ 1,807,283,000 Total to all banks: $165,306,798,000 Percentage: 1%

Advisory Board Member Howie Hodges mentioned

In an article on the Black Enterprise Magazine blog about the nomination of New Mexico Gov. Bill Richardson as Obama Administration Commerce Secretary, Creative Investment Research, Inc. Advisory Board Member C. Howie Hodges, "who was an assistant director for the department’s Minority Business Development Agency during Clinton’s first administration" noted that, "Richardson had a very good strategic team and I have no doubt that he will put in place a very capable combination of savvy business people who will also have the political skills to help execute Obama’s mandate to create economic and job growth,' says Hodges, who is currently a senior vice president of One Economy Corp., a global nonprofit that delivers access to technology and content to low- and moderate-income households. In addition, says Hodges, during the Clinton administration, the agency actively aimed to expand opportunities for minority and women-owned businesses in the private and international...

SEC Approves Measures to Strengthen Oversight of Credit Rating Agencies

The SEC today "approved a series of measures to increase transparency and accountability at credit rating agencies, and ensure that firms provide more meaningful ratings and greater disclosure to investors. The new measures impose additional requirements on credit rating agencies, whose ratings of residential mortgage-backed securities backed by subprime mortgage loans and of collateralized debt obligations linked to subprime loans contributed to the recent turmoil in the credit markets. The SEC also proposed additional measures related to transparency and competition concerning credit rating agencies." We think these reforms are important first steps, and are mindful of the fact that politics and regulation are the "art of the possible." As we said in 2005, fradulent practices by credit rating agencies "threaten the integrity of securities markets. Individuals and market institutions with the power to safeguard the system, including investment analysts and NRS...