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Showing posts from 2018

Time to clean house at Wells Fargo

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Earlier this month, Wells Fargo, the third-largest bank in the United States, acknowledged that it improperly foreclosed on 545 distressed homeowners after they asked for help with their mortgages. The bank has exhibited a seemingly established pattern of negative behavior, from creating 3.5 million fake accounts to charging 570,000 customers for auto insurance they did not need to illegally repossessing vehicles from hundreds of service members. At the start of the year, Wells ranked 26 on the Fortune 500’s 2018 rankings of the largest U.S. corporations by total revenue. It is also the second-largest retail mortgage lender and the largest debit card issuer by purchase and transaction volume. These facts establish the bank as a systemically important financial institution. My firm’s economic models suggest that the next recession may very well start with a major hack at a SIFI like Wells Fargo. This underscores the importance of stemming the ongoing problems at Wells as quickly and

William Michael Cunningham on Impact Investing, Blockchain, and Crowdfunding

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September 2018 - 10 Questions William Michael Cunningham on Impact Investing, Blockchain, and Crowdfunding Interview by Carly Schulaka WHO: William Michael Cunningham WHAT: Economist, impact investing specialist, founder of Creative Investment Research WHAT'S ON HIS MIND: “Any finance professional in the U.S. should learn how to create a blockchain.” 1. You are an economist, an inventor, and an impact investing specialist. I’ve heard you say: “True innovation happens in a way that is independent of monetary returns.” How does this statement influence your work? It’s really about finding an interesting problem and applying financial technology to solving that problem or to dealing with that problem. You know, the people who invented the alphabet didn’t do so to make money. They had an interesting problem—communication on both a local and a grand scale—and if you were to calculate the social return for the invention of that technology or technique, it’s almost infinite. S

Opportunity Zones

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The Tax Cuts and Jobs Act, passed in 2017, created new tax incentives for investments in what are known as Opportunity Zones: targeted areas in the United States. Investments are made via Qualified Opportunity Funds, who are directed to promote economic development in 8,700 disadvantaged rural and urban (read Native, African American and Hispanic) communities (low-income census tracts selected by state governors and certified by the U.S. Treasury Department) by offering investors substantial federal tax advantages. As one analyst explained: "Assume an investor has a $1 million gain in Apple stocks and decides to sell. To keep it simple, let’s also assume the investor is in a 20 percent tax bracket, totaling $200,000 in capital gains tax. But instead of paying, the investor reinvests the $1 million in an Opportunity Fund. If the investor holds for more than 10 years: the investor pays ZERO capital gains tax on the appreciation of that asset." These benefits are only

Impact Investing, Blockchain, and Crowdfunding

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Journal of Financial Planning. September 2018 - 10 Questions ​William Michael Cunningham on Impact Investing, Blockchain, and Crowdfunding Interview by Carly Schulaka WHO: William Michael Cunningham WHAT: Economist, impact investing specialist, founder of Creative Investment Research WHAT'S ON HIS MIND: “Any finance professional in the U.S. should learn how to code in blockchain.” See:  https://www.onefpa.org/journal/Pages/September-2018%20-%2010-Questions.aspx

Feedback on “How to Finance a Black Women-owned Business in 2018”

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We recently held a series of webinars designed “to help black women business owners discover various ways to land capital.” The webinars, titled, “How to Finance a Black Women-owned Business in 2018” were held on July 18th, August 10th and August 24th. The feedback from the webinars is good. Eighty five percent (85%) of the respondents to our customer satisfaction survey found the webinar useful. Seventy one percent (71%) rated the webinar excellent. Of the forty or so women on the webinar (and they were all women) forty two percent (42%) have just started looking for business financing. Fourteen percent (14%) have been looking for business financing over the past one to six months, and twenty eight percent (28%) have been looking over the past six to twelve months. Fourteen percent (14%) have not attempted to get financing yet, but are simply exploring options. This dovetails with the recent efforts we have observed in this sector. T

Number of New Black Businesses "Jumps" by 400%

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A  recent survey  found that African American businesses are increasing at the fastest pace ever. Survey results suggest the 400% rise occurred from 2017 to 2018. Conducted by Guidant Financial and LendingClub, survey data was collected via email sent to "more than 2,600 business owners and entrepreneurs. It found that 45% of all small business in the country were owned by minority ethnic groups in 2018." Earlier (2015) survey results put this number at 15%. Charts below show some of the survey data: Survey sponsors noted that "the highest volume of African American entrepreneurs lives in Texas, followed by Georgia, California, Florida, and North Carolina." (During our discussion at the Denton Black Chamber of Commerce Dinner in March, 2014, we noted the elevated profile of Texas with respect to African American businesses:  https://youtu.be/E_AgImRM_Wk . Also see:  https://youtu.be/fSGje7OaLpk  ) While we are encouraged by these initial survey res

Asian Banks....again...

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We have been tracking Asian Banks for some time. See: Bullish on Asian Banks Originally posted on the Street Insight section of thestreet.com 2/28/2006 4:35 PM EST and Still Bullish on Asian Banks Recently, there has been renewed interest in this sector. We commented for an article by S&P analysts Kelsey Bartlett and Carolyn Duren posted Monday, 02 July 2018 11:52 AM ET, some of which is reproduced below: Deals are heating up among Asian-American designated banks, with two of the nation’s prominent institutions announcing deals since April. In its second deal since 2013, Hanmi Financial Corp. is acquiring Houston-based SWNB Bancorp Inc. Meanwhile, RBB Bancorp is making a play for Brooklyn, N.Y.-based First American International Corp. — its third deal since 2013. The two Los Angeles-based banks remain interested in diving into new markets with high populations of Asian Americans, management said. Hanmi expects the combined entity to have $5.7 billion in total assets, whil

Black Wealth Discussion at SCLC Annual Conference, by Papa Owusu, Franklin and Marshall University, Impact Investing Intern,

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        At the SCLC Annual Convention, Washington, DC, July 13, 2018. Left to right - Mr. Kebede, Virginia Tech, Mr. Owusu, Franklin and Marshall College, Dr. Steele, Executive Director, SCLC, Mr. Ye, Johns Hopkins University, and Mr. Brand, University of Maryland. On Friday, July 13, 2018, the Southern Christian Leadership Conference (SCLC) held a panel discussion on the state of black wealth in America. The panelists were Samantha Sanders, Director of Government Relations at the Economic Policy Institute, David D. Rixter, Principal  of HCR Consulting L.L.C. and William Michael Cunningham, Founder, Creative Investment Research. The panel was moderated by Kevin B. Kimble, Esq., DC Bureau Chief of SCLC. William Michael Cunningham speaking at the SCLC Convention The panelists discussed a myriad of reasons for the pervasive black-white economic gap to mark the 50th anniversary of the Kerner Commission that identified racism as the reason for the black-white economic gap. A k

Probability of Fed Rate Hike is 90.53%

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Our model of Federal Reserve policy estimates the probability that the Federal Reserve will increase interest rates. Our July 3rd Summary shows that the probability of the US Federal Reserve increasing the federal funds rate is 90.53%. While our model needs to be adjusted, as noted below, we remain confident in these results. The first forecast adjustment element are the previous hikes. Recall that in March, 2018, our model predicted a rate increase with a 92.3% probability . The rate increase following the June 12 – 13 FOMC meeting decreases the probability of subsequent rate increases, if only slightly (90.53% vs 92.30%). One precedent for the Fed raising rates in this manner came in 1994, during the Clinton Administration, when the Fed raised rates from February to May at a 25 basis point pace. Interest rates increased from 3.25% to 4.25% in 4 months (FED, 2018). Each successive rate increase adds less to policy impact. Given that the Fed has  raised interest rates two time

Webinar - How to Finance a Black Women-owned Business in 2018

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Maggie Lena Walker was the first female bank president of any race to charter a bank in 1902. Black women have continued down this path of entrepreneurship. According to one report, "the number of businesses created by black women in the United States alone is up more than 460% over the last 20 years, making them the fastest growing group of entrepreneurs in the nation." Of course, we've known this for some time, and have the track record to prove it. We launched  MinorityFinance.com  in 1998 and noted that 65% of the inquiries from the site came from Black women. While others have come along after our launch, we remain active and at the forefront. See:  Small Business Financing, Black People and Venture Capital https://youtu.be/gXGBEUoxHHs The key issue then, and now, is money: "according to the Diane Project, black female founders are only able to raise an average of $36,000 in venture funding, while start-ups owned mostly by white males have received on aver

Bitcoin and Blockchain: What you need to know now...

WEBINAR DESCRIPTION (15 seats total) COST - $20 to $60. NOTE: We accept Bitcoin. RSVP https://bitcoinnow.eventbrite.com Bitcoin is a new type of currency. As an online, open source payment mechanism, many believe this new tool will impact currency, governments, and financial technology. This webinar explains what Bitcoin is and how it works. We give some information on how this new currency may be treated. We will discuss how it may affect your business and your life.  Join economist William Michael Cunningham to learn more about this new payment mechanism/currency. Mr. Cunningham has been tracking Bitcoin since 2011 and became active in the field in 2014 (see: http://williamcunningham840.wixsite.com/bitcoinassociates ) We review Bitcoin, its spectacular price growth, describe where it is now and what it could become. We also review the best mechanisms and resources for learning more and for getting involved. We'll begin with a discussion of Bitcoin technology, move t

Impact Investing Forum North- Hilton Midtown, New York, NY- September 12-13, 2018

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Impact Investing Forum North- Hilton Midtown, New York, NY- September 12-13, 2018 The Impact Investing Forum will look at many of the asset classes that encompass this space. We invite you to join us and meet top influencers, experienced investors both public and private, money managers, and service providers that are leading the charge in this ever growing space. Themes of defining impact investing, portfolio construction, asset class opportunities, and the role of the investor are just a few of the stimulating topics to be covered at this event. www.opalgroup.net/trk/iifnb1820.html

Blockchain for Social Impact Conference

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Above, Interns from Creative Investment Research at the Blockchain for Social Impact Conference. From left to right, Papa Yaw Owusu, Franklin and Marshall University, Megan Abarca, Wellesley, Dongming Liu, Georgetown University, Mr. Lin, Georgetown University, Rongbin Ye, Johns Hopkins, Chen Zheng, Georgetown. The Blockchain for Social Impact Conference (BSIC), organized by Consensys and held on June 1st, was one of the highest level conferences held so far to discuss blockchain technology. As one of the main  speakers on the social impact of blockchain technology, William Michael Cunningham , Economist and CEO of Creative Investment Research, addressed the application of blockchain technology as a tool to enhance impact investing . Impact investing analysts and interns from Creative Investment  volunteered at the event and provided the administrative support. William Michael Cunningham speaking at the Blockchain for Social Impact Conference. The conference clearly poin

Industry 4.0 in Africa: Helping or hindering? Papa Yaw Owusu, Impact Investing Intern, Creative Investment Research

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                 On Monday, June 4, the Brookings Institution, in partnership with the United Nations Industrial Development Organization (UNIDO),  held a panel discussion titled “Industry 4.0 in Africa: Helping or hindering?”. Industry 4.0 refers to the digitization of the manufacturing sector, driven by computing power, connectivity, and new forms of human-machine interaction, like artificial intelligence. The panelists were Julius Akinyemi an Entrepreneur in Residence at MIT Media Lab, Mary Hallward-Driemeier the Senior Economic Adviser for Finance, Competitiveness, and Innovation at the World Bank, Susan Lund, Partner at the McKinsey Global Institute, and Olga Memedovic, the Chief of Business Environment, Cluster & Innovation Division in UNIDO's Department of Trade, Investment & Innovation. The panel addressed relevant issues and questions, such as: What can be done to put the prerequisites for Industry 4.0 adoption in place? What are the overall implications fo

The Africa Continental Free Trade Area (AfCFTA) by Papa Owusu, Impact Investing Intern

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      Photo: Mr. Owusu, CIR Intern, Franklin and Marshall, Ms. Muyangwa, Director, Africa Program at the Wilson Center, Mr. Zheng, CIR Intern, Georgetown University.         The Wilson Center's event on opportunities and challenges of the Africa Continental Free Trade Area (AfCFTA) was insightfully supportive of the new trade agreement. Trade refers to the transfer of goods and services from one person or entity to another, often (but not always) in exchange for money. A Free Trade Zone (FTZ), is a geographic area where goods may be traded without the imposition of any barriers by customs authorities. These barriers include tariffs and quotas. Free Trade Zone examples include the North American Free Trade Agreement and the Southern African Development Community Free Trade Area.  The AfCFTA seeks to create a unified continental market with minimal trade and migration barriers and unified trade policies to facilitate the easy movement of people, goods and services. Currently,

William Michael Cunningham to participate at the FCC Supplier Diversity Workshop

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WASHINGTON - May 21, 2018 - PRLog -- The Federal Communications Commission's ("FCC's") Office of Communications Business Opportunities ("OCBO") and Media Bureau ("MB"), and the FCC's Advisory Committee on Diversity and Digital Empowerment ("ACDDE") will host a one-day supplier diversity workshop for small, minority-owned, women-owned and other diverse businesses. The workshop will teach small business entrepreneurs how to navigate corporate supplier diversity programs; identify successful strategies utilized by diverse entrepreneurs who do business with corporate entities; and enable one-on-one networking between participating firms and workshop participants to increase awareness about the expectations of procurement managers responsible for goods and services contracting. Workshop presentations and one-on-one consulting will be provided by representatives from various industry sectors, including voice, video and data providers,

William Michael Cunningham at Blockchain for Social Impact Conference 2018

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WASHINGTON - May 18, 2018 - PRLog -- William Michael Cunningham will moderate a panel on the Future of Impact Investing at the Blockchain for Social Impact Conference 2018, to be held on Friday, June 1, 2018. The United States Institute of Peace in Washington, DC will host the conference. The Conference is being organized by the ConsenSys Social Impact team, and will focus on "areas where blockchain technology could be instrumental in revolutionizing existing systems and making a significant impact." The Conference will focus on four major global challenge areas: Agriculture, Infrastructure, Democracy, and Refugees. Conference organizers noted, "As blockchain becomes the shared infrastructure for more and more people to collaborate with one another, participate in global marketplaces, access essential services, and protect their personal data and assets, it is the responsibility of the larger tech community and governments around the world to make sure this tec