Thursday, December 22, 2016

Performance of the Diversity Fund, May 20, 2011 to December 22, 2016

A diverse corporation has an inclusive work force, marketplace and business community (suppliers, partners and investors). To successfully compete in the United States and globally, companies must reflect the changing population within the ranks of their employees and managers. Increasingly, the faces of our work force, our suppliers and our investors are faces of color, faces of women, faces of people with disabilities, faces of gay, lesbian, bisexual and transgendered individuals, faces of older workers. By integrating diversity into the workplace, companies vigorously tailor their offerings to fit the needs of shifting cultural priorities.

The chart below shows the performance of the Diversity Fund Model Portfolio versus the S&P 500 index from May 20, 2011 to December 22, 2016.

Stocks of the largest companies in the U.S. are included in the fund. These companies have been selected because they have outstanding investment characteristics. Companies have been selected because they have outstanding investment characteristics.

Tuesday, October 4, 2016

IMF Seminar on the Effects of Corruption on Youth - Brendan Cody, Intern, George Washington University

This year’s annual meeting of the International Monetary Fund and the World Bank has a special focus on inequality. In keeping with this theme, the IMF held a seminar discussing the effects of corruption on youth and the direct correlation between the level of corruption and income inequality.
Corruption perpetuates income inequality in several ways. First, systematic corruption erodes public trust in the government and leads to extreme lack of tax compliance. Since most education funding comes from government, corruption limits the amount of money spent on education and the potential for human capital growth. Corruption also creates uncertainty for foreign investors in a country who do not know if bribes or government regulation could harm business. This limits the private sector job market for youth who do receive education. In a society where who you know is more important than what you know, youth are often discouraged from studying and from pushing impactful reforms on their governments.
After describing the negative effects of corruption, the panel proceeded to discuss how to minimize corruption. People, particularly the youth, must demand transparency and honesty from their governments. The rule of law must also be instituted for everyone, but sending corrupt figures to prison will not solve the entire problem. Values and institutions must be instilled into the society for any long term change to occur. Role models and examples of good behavior can play a key role in changing societal norms. Furthermore, citizens cannot accept corruption as a normal part of life when they hear of a scandal in the press, but must demand change.
In conclusion, the panelists argued that journalists need to expose corruption and keep society honest, but that family and other institutions must provide support for long term change through the nurturing of ethics and fair practice.
Brendan Cody, Intern, George Washington University

Thursday, August 11, 2016

Crisis - The Current State of Black Banking

Our Webinar will cover:

1. History: Black Banking in the 80's, 90's and 00's.
2. Rationale: Why Black banks?
3. Customers: The Demographics of Black Banking.
4. Market: The Market for Black Banks.
5. Crisis: The Financial Crisis and Black Banks.
6. Opportunities: The OMWI initiative and Black Banks.
7. What to do now: Why campaigns to get minorities and other consumers in the urban areas to bank with minority banks have not worked. What will work.
8. Future: Which Black Banks will survive and why?
9. Next Steps.
Wednesday, August 24, 2016 from 4:00 PM to 6:00 PM (EDT

To RSVP: Crisis: State of Black Banking

Saturday, July 2, 2016

Brexit: Now What?

Now that a little time has passed,  we can review the Brexit vote with more perspective and forecast its impact on the US financial system more objectively.
To do so, we believe it important to consider the following:
Brexit's main short term impact will be to restrict the ability of the Fed to respond to domestic economic and financial issues, already evident in their decision to keep rates low. Further, the Fed may have to create a special QE Brexit liquidity facility to support American firms in the UK who now need to move operations either back to the US or to the Continent. Finally, having announced at the House Financial Services Committee Monetary Policy Hearing this week a November conference to examine black unemployment, we predict this effort will be placed on hold as the Fed struggles to deal with the uncertainty that follows the Brexit vote.
Uncertainty is, of course, the greatest legacy of Brexit. Consider this: each and every contract signed in the UK when the UK was part of the EU will probably now have to be reviewed and renewed. This includes contracts for financial instruments, a huge burden. This alone may shave 1% from potential economic growth.
One group badly damaged by this vote are mainstream economists, who insisted on issuing alarming estimates of the economic damage a vote to leave would cause. As with missing the financial crisis of 2008, they failed to realize that the majority of voters in the UK were willing, on the day of the vote at least, to incur whatever Brexit costs. Make no mistake about it: what is at core here is a desire and a willingness to discriminate against Muslims, immigrants and even other Europeans in an attempt to restore some supposedly faded glory to a British Empire that no longer exists. This is the very definition of crazy.
Our Fully Adjusted Return Economic Forecast predicts the damage to the British economy from Brexit in 2016 will be smaller than anticipated by most mainstream economists. It will, in other words, be manageable. The long term damage will be greater, of course, but, by then it will not matter. The demonstration effect dominates. By showing that a right wing, extreme, nationwide referendum based on entitlement and bigotry can be successful, the Brexit vote all but guarantees that Donald J. Trump will be elected President of the US.
While what happens after that is anybody's guess, it probably will not be good for democratic principles and values.

Saturday, June 11, 2016

Why Trump Will Win

Our initial 2016 Election Fully Adjusted Return Forecast indicates that Donald J. Trump will win the election for the Presidency of the United States. This follows from one  sufficient and one necessary condition.  
The sufficient condition: seventeen (17) Republican states have enacted laws restricting access to the voting booth, restrictions so onerous as to defy both common sense and the spirit of democratic governance. These laws guarantee that the people who would vote against Mr. Trump will be blocked from participating in the election. They simply will not be able to vote. For example, to vote in the State of Texas, a gun permit suffices. A college ID does not. So it is in 17 of 50 US States. 
The movement to block access to voting has been a long term effort, a reaction to the election of the first African American president, and it is now too late to do anything about this. 

Rather than effectively fighting voter disenfranchisement, Democrats were convinced that this was a Black issue (Florida 2000, Ohio 2004), and therefore unworthy of serious consideration. They were also distracted by fabricated controversies, like the birther issue (promoted by one Donald J. Trump).  Finally, having the nation's largest news channel bring forth an unprecedented level of misinformation and vitriol aimed at the current President and the presumptive Democratic nominee served to create an atmosphere of  mistrust. The financial crisis added to the level of dissatisfaction. 
What this means is that Mr. Trump can insult Mexicans all he likes.  He can insult immigrants and members of other minority groups as well: they are not going to be able to vote.
Thus, Mr. Trump's behaviour is not accidental. This brings us to the necessary condition.
Having blocked access to the polls, all that is required to push Mr. Trump into the White House is a surge in voting by disaffected, uneducated, low to moderate income white voters. This, the biggest demographic in the election, must be incentivized to participate. Mr. Trump's behaviour and language does so. 
Given the above, popular voting victory is assured. The Electoral College, the only votes that really matter, will be forced to follow.
Game. Set. Match.
Welcome, President Trump.

Sunday, May 8, 2016

Obama at Howard: Best Speech of his Presidency?

President Barack Hussein Obama came to Howard University and delivered what many Black people will regard as the best speech of his presidency. (Click here for one absolutely hilarious reaction.) As with Larry Wilmore's White House Correspondents' Dinner Speech, we expect most white people to disagree. Here's why they are wrong on both.
In content, reference and tone, both the President and Wilmore were not speaking to white people. They were speaking directly to Black people. 
Mr. Obama started by name checking the resident student dormitories at Howard. In doing so, he speaks to the people who either lived in, partied at, heard about or wanted to party at one (or more) of the dorms. This may number 900,000 Black people, give or take...I'm not even kidding.
He also name checked the pantheon of Black activists and achievers: Thurgood Marshall, David Dinkins, Zora Neale Hurston, King, of course, but also Fanny Lou Hamer, and James Baldwin, just for starters. This was a profane and profound way to acknowledge the giants who came before him, contrary to those, black and white, who say he is unmindful of the debt he owes. 
He moved on to reference and name check Wilmore, currently experiencing some negative feedback: many white people simply did not get Wilmore's brilliant WHCA Dinner speech. Obama thus provided support (yo, Larry, my nig....) and cover . 
In the end, Mr. Obama remains a traditionalist and a conservative (this is why he did not mention Stokely Carmichael, BTW, another Howard graduate who passed on a full ride at Harvard...). Some of his key points are as follows:
1. Vote like you life depends on it. It does. As he noted, "In 2012, 2 out of 3 turned out to vote. In 2014, 2 out of 5 did. And you don't think this made a difference in who I had to deal with?" It matters, Mr. President. It matters.
He predicted voting will matter even more in the coming years, given efforts to deny the right to vote to a significant section of the population (read: Black people). As Mr. Obama noted, the US is the "only advanced democracy on earth that goes out of its way to make it difficult for people (read: Black people) to vote" 
2. Let the bigots talk, then rebuke them...hard. His subtext was that this might come in the form of exceptional and competent performance:
In this way, he syncs with Wilmore's WHCD talk. White people simply didn't get Wilmore's repeated references linking Ted Cruz to the Zodiac Killer, but Black people knew what he meant: you can look exactly like a serial killer and run for President of the US. As Cruz (and Trump) prove, you don't even have to be competent, as long as you (and your serial killer doppelganger) are white. 
This also explained Mr. Obama's operating philosophy for the last eight years: to get things done, you have to effectively deal with people with whom you disagree. It's tough, but it's just the way things work. Quoting Zora Neale Hurston, he reminded us that "nothing that God ever made is the same thing to more than one person."  The key takeaway here is that you must stay woke. As the President said, passion is no substitute for strategy. You MUST RESPOND. Mr. Obama suggests doing so in a polite way, which is, in general, good advice. (Of course, we still think Black Lives Matter has it mostly right....)
3. Keep fighting. Racism is not going away. As he noted, "I don't know who came up with that Post-racial thing. It wasn't me." No, Mr. President. It was the same people who will now become your post Presidential BFFs (Best Friends Forever): the bigoted conservatives who  did everything they could to make you a one term President (unsuccessfully, I might add) and are currently working to limit voting rights (successfully, I might add). These people will use your Presidency as proof that racism doesn't exist. As with global warming, immigration, Wall Street and the chances of Donald Trump becoming their nominee, they will be wrong. Very wrong. 
Not so for Mr. Obama, who ended where he began, with hope, with Yes We Can. To paraphrase Mr. Wilmore, Yes, you did, President. Yes, you did... 

Friday, April 22, 2016

Takeaways from the IMF/World Bank Spring Meetings

Each spring "the International Monetary Fund (IMF) and the World Bank Group..bring together central bankers, ministers of finance and development, private sector executives, and academics to discuss issues of global concern, including the world economic outlook, poverty eradication, economic development, and aid effectiveness." We have attended this event for the past six years.
Prior to the event, the IMF issues a Global Spring Meeting Economic Forecast, this year predicting the world's economy will grow by 3.2% in 2016, down from the 3.8% forecast issued last year. This decline was due mainly to an increase in political ( as opposed to purely economic) risks. Keep in mind that these are the same factors (austerity as an inappropriate focus on reducing deficits in a time of recession, inability to rationally address the causes and solution to the crisis) that led to the shallow global recovery in the first place.
Our analysis indicates that the key risks to the global economic forecast are all potentially self inflicted political injuries: TrumpBrexit, and the Premature Celebration of the end of the financial crisis. These are described below. 
Premature Celebration 1: We questioned Clinton Treasury Secretary Larry Summers about the relevance and ability of economic policy to meet the needs of all of the world's people, especially people of African descent. We noted the inability of economic policy makers to forecast the financial crisis, cited damage done to the environment, and pointed out that key monetary policy tools are now ineffective, at least without extraordinary effort (QE1, QE2, QE Etc.). A video of the question is provided below.
His response (really a non response) cited Churchill, a man who, prior to his achievements in WWII, fought to preserve the continued exploitation of Black Africans by the British. 
I think that says it all.
We believe Mr. Summers is angling for rehabilitation as Fed Chair in the Hillary Clinton Administration. Given his track record, this would be another self inflicted political injury. 
Trump. During the taping of an episode of the BBC news show Hard Talk, IMF Managing Director Christine Lagarde forcefully addressed the Trump issue, saying that she thought Mr. Trump a risk to global economic stability.  
Brexit. On June 23rd, Britain will decide whether or not to exit the European Union. The IMF made their opinion clear: a vote to exit will add significant volatility and risk to global markets. We think a vote to exit the EU would be suicidal for both Britain and the EU, and therefore forecast that they will not leave.
Premature celebration 2: In a session on cyber risks to financial institutions, SARAH BLOOM RASKIN, Deputy Secretary of the U.S. Department of the Treasury, (pictured in white) the Treasury point person on cyberthreats and financial institutions, seemed woefully ill informed concerning upcoming changes to the administration of the internet's root servers. She indicated this was a "new issue" for her. The ROOT SERVERS. A NEW ISSUE. This is truly problematic. Below is the video of the question posed.

Other Observations
Five years ago, most of the catering support staff were white working class people and white middle class people damaged by the recession and desperate for any employment opportunity. This year, most of the catering support staff were Black working class people, mainly from the Washington, DC area. (Thank you, Madam Director...) This tells us that the economic recovery is finally reaching the difficult to reach populations, those hardest hit by the crisis to begin with.
This means that economic growth, and the employment it generates, will continue to be strong domestically until the end of the Obama Administration.
Given his performance, Mr. Obama would be forgiven for "dropping the mike" before leaving.

Thursday, April 14, 2016

The Real Superpredators

The Real Superpredators

SachsRecently, the Department of Justice announced that Goldman Sachs “agreed to Pay More than $5 Billion in Connection with Its Sale of Residential Mortgage Backed Securities.” Close scrutiny reveals that Goldman will actually pay, for a number of reasons, $0.

Goldman’s Track Record:

We note that:

On April 28, 2003, Goldman Sachs was found to have aided and abetted efforts to defraud investors.

On September 4, 2003, Goldman Sachs admitted that it had misused material, nonpublic information that the US Treasury would suspend issuance of the 30-year bond.

On April 28, 2003, Goldman Sachs was found to have "issued research reports that were not based on principles of fair dealing and good faith .. contained exaggerated or unwarranted claims.. and/or contained opinions for which there were no reasonable bases ". .

On January 25, 2005, "the Securities and Exchange Commission announced settled civil injunctive actions against Goldman, Sachs & Co. relating to the firms' allocations of stock to institutional customers in initial public offerings (IPOs) underwritten by the firms during 1999 and 2000 ".

On July 15, 2010, “the SEC announced that Goldman paid $550 million to settle SEC charges that Goldman misled investors in a subprime mortgage product just as the U.S. housing market was starting to collapse.”

Our Track Record:
On July 3, 1993, we wrote to US Securities and Exchange Commissioner (SEC) Mary Schapiro to notify the Commission about the "Nigerian letter scam."

We designed the first mortgage security backed by home mortgage loans to low and moderate income persons and originated by minority-owned institutions. (See: Security Backed Exclusively by Minority Loans, The American Banker Newspaper. Friday, December 2, 1994.)
We opposed the elimination of Glass-Steagall, a law that separated commercial from investment banks. The removal of this law contributed to the financial crisis, as we warned it would on September 23, 1998.

On June 15, 2000,we testified before the Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises (GSE’s) of the U.S. House of Representatives and suggested that GSEs Fannie Mae and Freddie Mac be subject to a Social Audit. Had the GSE’s been subject to this audit, certain flaws in their operation, including ethical shortcomings, would have been revealed earlier, in a better market in which to make corrections.

In 2001, we participated in the first wide scale home mortgage loan modification project. The Minneapolis-based effort helped 50 families victimized by predatory lending practices.

On December 22, 2003, we warned US regulators that statistical models he created using the proprietary Fully Adjusted Return® Methodology signaled the probability of system-wide economic and market failure.

In 2005, we served as an expert witness in a case that sought to hold Credit Suisse First Boston, Fairbanks/SPS, Moody’s and Standard and Poor’s, US National Bank Association, and other parties legally responsible for supporting and facilitating fraudulent subprime lending market activities. Had this single case been successful, we believe the credit crisis would have been less severe.

On December 22, 2005, we issued a strongly worded warning that system-wide economic and market failure was a growing possibility in a meeting at the SEC with Ms. Elaine M. Hartmann of the Division of Market Regulation.

On February 6, 2006, we again warned regulators that statistical models created using the proprietary Fully Adjusted Return® Methodology confirmed that system-wide economic and market failure was a growing possibility. We stated that: Without meaningful reform there is a small, but significant and growing, risk that our (market) system will simply cease functioning.”

On December 9, 2013, we filed a "Friend of the Court" brief in the United States District Court, Central District of California in an action that the U.S. Department of Justice brought against McGraw-Hill Companies, Inc., and Standard & Poor’s Financial Services LLC.

Why This Deal Matters

This deal has ramifications well beyond the parties to the case. It protects the monetary interest of a narrow set of mainly white persons, short-circuits the justice process, fails to protect the interests of both DOJ and the general public, does little to protect victims of other financial crimes, and damages the country's long-term economic prospects.

Without an admission of guilt, transaction costs — in the broad economic sense of the costs of participating in a market — will increase in financial markets.

This deal continues a pattern of ineffective financial institution regulation and enforcement that is contrary to the public interest. It furthers the legal double standard that Black Lives Matters protesters highlighted when they castigated former President Bill Clinton for Hillary Clinton’s 1996 comments that some black youth were "superpredators."

The financial crisis shows the real superpredators were firms with names like Goldman Sachs, Bear Stearns, Lehman Brothers and Wells Fargo. The fact that many of these superpredators also damaged and destroyed themselves (as superpredators have a tendency to do) is beside the point. Responsible enforcement would have prevented them from also damaging the global economy.

Given their record, Goldman’s license to do business should have been suspended (at the very least.) Clearly, they have compromised both New York Attorney General Eric Schneiderman and the DOJ.

This deserves federal judicial review.

Friday, April 1, 2016

DC Ward 7 Economic and Social Data Analysis by Creative Investment Research, Inc

At the request of community groups in DC's Ward 7, William Michael Cunningham and Creative Investment Research are conducting a preliminary analysis of the Ward's social and economic condition. An informal straw pool is also underway. These efforts will provide information on the real time economic and social landscape of Ward 7.

This data may also be used as a preface for a Ward 7 City Council Candidate Forum and Straw Poll. The Ward 7 Candidates Forum and Straw Poll will be h
eld on Saturday, April 9, 2016 at H.D. Woodson Senior High School at 9am. The moderator for the Forum will be Harold T. Fisher of WHUR-FM Radio The Daily Drum along with two Youth Mayors from the Marion S. Barry, Jr.'s Youth Leadership Institute.

Our preliminary economic and social data analysis reveals the quality of life in Ward 7 has declined. Further analysis reveals that this is due to the protracted lack of economic opportunity and an increase in certain negative social issues directly related to the lack of economic opportunity. Although, the population has remained predominantly African American, it is noted that the lack of economic opportunity is caused by major disparities in key areas and not by the mere fact that the ward is heavily African American.

The informal straw pool can be found at:

Saturday, March 5, 2016

Keys to Crowdfunding: "high quality media, prior success, positive comments..."

We note with interest a recent study from the University at Buffalo School of Management that shows "high quality photos and video, previous crowdfunding success and positive comments from backers are the keys to a successful campaign."

This syncs with what we uncovered in our two books, "The JOBS Act: Crowdfunding for Small Businesses and Startups" and in "Top 50 Crowdfunding Campaigns: Fifty Most Successful Crowdfunding Campaigns."

According to news reports, the University at Buffalo School of Management study "found that by receiving these signals, potential investors..gain valuable information that motivates them to participate and increases the likelihood of a project achieving its funding goal."

One part of the analysis we found in error, however. One of the authors of the study was quoted as saying that

"These sources are important because backers of crowdfunded projects have less access to information than typical private equity investors..private equity investors follow a stringent due diligence process to assess the quality of a startup, while crowdfunding backers rely more on the information on the campaign's webpage."

This shows a lack of understanding about crowdfunding and private equity firms, who lose 80% of the funds they invest, something that would not occur if they really followed "stringent due diligence process(es) to assess the quality of a startup."

For more, see: "Top 5 Reasons People Contribute to Crowdfunding Campaigns" by @CreativeInv on @LinkedIn

"How To Crowdfund Update" by @CreativeInv on @LinkedIn


"How to become the biggest Kickstarter project..EVER!" by @CreativeInv on @LinkedIn

Saturday, February 13, 2016

Five Key Takeaways from Yellen's Monetary Policy Testimony

Federal Reserve Chair Janet Yellen testified on Capitol Hill on Wednesday and Thursday.
Five Takeaways from Yellen's Testimony She appeared before the House Financial Services Committee and the Senate Banking Committee. We attended both hearings. Here are the key points:

1. An undercurrent of protest from both the left and the right (Google #whoserecovery) is beginning to have an impact on monetary policy. See the photo above of protesters at both hearings. We have issues with both the left and right wing versions. The right is simply crazy. The left is financed by labor unions. I can guarantee that none of the black folks in the photo of protestors at the hearings below are well paid. Their labor union managers, most of whom are white, are. (Can you say rock and a hard place?)

2. At the start of the Senate Banking Committee hearing, Senate Banking Committee Chairman Richard Shelby unveiled a letter from 30 economists who support implementation of the Taylor Rule, a mechanical approach to monetary policy that sets limits on the ability of a central bank to respond to economic conditions. We note two things:
  • Not one of these economists accurately predicted the financial crisis. (We did, BTW.)
  • Ms. Yellen pointed out that no central bank anywhere in the world uses the "Taylor Rule" or anything like it. None. This should be enough to end the conversation. It won't.
3. The Fed's current balance sheets equals 20% of the U.S. economy. In essence, the Fed stepped in to rescue the economy. From our perspective,  this confirms, as the Chair noted, that Fed independence and Fed accountability are NOT mutually exclusive.

4. When Senate Banking Committee Ranking Member Sherrod Brown asked for information on which groups (by race, gender and sector) have fared better during the recovery, Ms. Yellen indicated she had no data on which to base a response. She then went on to claim that most of the benefits of the economic recovery have flowed to the better educated portion of the workforce. Again she has no data to support this contention. Thus, her statement is both unscientific and prejudicial.

5. Her key statements on current economic conditions and monetary policy are as follows:
  • Financial conditions are less supportive of growth. Both the dollar and interest rates are up, and lower oil prices do not seem to be meaningfully impacting growth prospects. 
  • The recovery in the housing sector is ongoing. Prices, and activity are both up. 
  • Consolidation in the banking industry is also ongoing. This results in fewer and fewer banks, less competition, and less beneficial terms for bank customers. (We suggest people start looking at Credit Unions..)
  • The Fed looked at implementing negative interest rates (that's where you pay the bank to hold your money..) but rejected this approach. The Fed is taking a fresh look at implementing monetary policy that implements negative interest rates, however.
  • She noted that economic "expansions do not die of old age." They die because of policy mistakes. We agree.

Friday, January 29, 2016

Why #OscarsSoWhite and #OscarsBoycott are a waste of time...

An effort to boycott the Oscars has gained significant traction, even leading to "a history-making announcement by the Academy of Motion Picture Arts and Sciences about diversifying its membership.."
Simple economic analysis reveals why the Academy responded so quickly. It also reveals why the course of action chosen is likely to be less effective than many hope. Finally, it points to a more effective solution.
As noted in the charts above and below, both drawn from the 2014 Motion Picture Association of America Stat Book, Asians, African-Americans and Hispanics comprised 46% of movie ticket sales in 2014.
You don't need an MBA from the University of Chicago to know policies and practices that disrespect 46% of your customers, while several of your employees make statements that appear to channel Donald Trump's perspective on diversity, are bad for business. As I wrote in an MLK Day post, Dr. King stated quite clearly that "If you respect my dollar you must respect my person."
So it is here. 
Even more relevant is the fact that Asians, African-Americans and Hispanics comprise a large share (46%) of tickets sold to the top grossing movies in 2014.
Why #OscarsSoWhite and #OscarsBoycott Won't Work
A boycott of a specific, one day only event is likely to fail to generate significant change. Institutions tend to respond with tokenism, defined as "the practice of making only a perfunctory or symbolic effort to do a particular thing, especially by recruiting a small number of people from underrepresented groups in order to give the appearance of sexual or racial equality within a workforce." Tokenism implies that if one Black (or minority, or woman) benefits, all members of the target group do. (Clarence Thomas replaced Thurgood Marshall on the Supreme Court, but was Mr. Thomas really as qualified as Mr. Marshall? What does the record show?)  
In this case, the appointment of Black people in highly visible positions, as ceremony hosts or even as CEO is symptomatic of this approach. (Should these people step down?  Hell no. Why would you do that?) While the reality is these appointments do not  have the power to actually change the shape of discrimination, this does not mean they have no value. (It depends upon the person: Marshall vs Thomas....)
Given the facts outlined, a more effective approach may be for members of the affected groups to boycott all new films for, say, a week or a month.
Historically, these groups have been prevented from working together toward a single goal, so a coordinated effort is a long shot.
But economic analysis reveals it would be the most effective approach.

Tuesday, January 26, 2016

William Michael Cunningham invited to speak at the Wall Street Project Economic Summit

Jan. 26, 2016 --- William Michael Cunningham has been invited to serve as a speaker during the Rainbow PUSH Coalition & Citizenship Education Fund 19th Annual Wall Street Project Economic Summit, convening February 16-18, 2016 at the Sheraton New York Times Square Hotel, 811 Seventh Avenue at 53rd Street, New York, NY 10019.

The theme of the Summit will be “Wall Street: The New Paradigm – Access to Opportunity.” Up to 2,500 corporate executives, minority suppliers, and political, community, religious and world leaders are expected to attend.

Mr. Cunningham will speak at a panel titled “Access to Capital: Crowdfunding, Alternative Funding Sources and Business Development for MBW/WBES” on Thursday, February 18th (10:45a.m.-12:00p.m.). He will discuss new techniques to acquire funding to start or grow a business. As the organizers noted, "It seems like every day you hear about a new crowdfunding site or another firm looking to invest in new ventures. Some things sound easy, but, in most cases, they are far from it. This panel of experts will tell you what to consider, what to avoid, and what you’ll need in order to pursue funding opportunities."

Mr. Cunningham is also expected to discuss his resource guide, The Minority and Women-owned Company Small Business Financing Guide and Workbook, 2016 Edition.

The Guide and Workbook are designed to provide actionable information minorities and women can use to obtain small business financing. For more, see:

Tuesday, January 19, 2016

Martin Luther King's Philosophy on Investing

Capitalism and Equality 
As the civil rights movement expands to include investing and investments, I thought it would be an appropriate time to reflect on Martin Luther King, Jr.'s attitude toward investing. Though it may surprise some, Dr. King was one of capitalism's staunchest proponents. In this respect, his actions were fully consistent with his faith: as he noted in one of his speeches, "Jesus never made a universal indictment against all wealth." What's more, Dr. King's work made capital markets more efficient, as I discuss below.
 A Socially Responsible Investor
Martin Luther King was more concerned with how wealth was obtained and used. To him, the fact that one owned a Cadillac said nothing about one's faith or about one's character, for that matter. Worshiping the Cadillac, however, did. This certainly made him a socially responsible investor, specifically a values investor. His emphasis on values rested on a concern he expressed many times, that "material means have outdistanced spiritual ends, (does anyone really need a Gucci handbag?), that mentality has outdistanced morality (Goldman Sachs), and that civilization has outdistanced culture." ( Trump, some popular music, and most reality TV).
 Community Investing
Dr. King believed in both the power of community and in the power of the market. In fact, economic development projects started by Dr. King laid the foundation for future initiatives in socially responsible investing. Operation Breadbasket in Chicago combined ongoing dialog with boycotts and direct action targeting specific corporations. His efforts also strengthened and developed three African American banks, two in Chicago and one in Cleveland.
Finally, Dr. King helped people realize the economic power of their own spending. Or as he put it, "If you respect my dollar you must respect my person." As I noted in one of my earlier articles, I like Carver Bancorp (CNY). Carver is a small-cap bank operating in Harlem that is African-American owned. The bank has strong management, a solid balance sheet, and is well positioned to benefit from the continuing development of the Harlem real estate market.
Economic Impact
Martin Luther King's work also supported domestic economic growth. By my estimate, the elimination of Jim Crow laws and reduced employment discrimination boosted the U.S. economy by $20 trillion dollars over the 20 years after King's death. (This includes domestic spending and productive capacity between 1970 and 1990.) By contrast, in 2010 the US Treasury estimated that $19.2 trillion in wealth had been lost due to the impact of the financial crisis and corporate fraud.
This certainly puts the bursting of the housing bubble in perspective.
 1) "Why Jesus Called A Man A Fool", A Knock At Midnight: Inspiration from the Great Sermons of Rev. Martin Luther King. Warner Books, 1998, page 148.
 2) "Rediscovering Lost Values". Ibid. Page 11.
 3) "Paul's Letter To American Christians". Ibid. Page 27.
 4) "The Financial Crisis Response In Charts April 2012." US Treasury. Online at:
5) "The Birth of a New Nation", A Call to Conscience: The Landmark Speeches of Dr. Martin Luther King, Jr. Edited by Clayborne Carson and Kris Shepard. Warner Books, 2001, page 18.