Sunday, January 27, 2019

Black-owned businesses took a disproportionate hit amid shutdown

William Michael Cunningham October 20, 2013

The partial government shutdown did not impact all businesses equally. My research indicates black-owned businesses were hit harder than most.

Many are located in states that receive substantial federal aid, such as Maryland and Virginia, and they tend to be in industries such as health care, administration, transportation, professional services and retail that are sensitive to any decline in federal spending.

As a result, these companies can experience a double hit. I estimate there are roughly 1.9 million black-owned businesses in the United States, and they generated $131 billion in 2012. That suggests the monetary impact of the shutdown on their businesses to be $10 million per day.

We saw the effects. National parks and federally owned museums closed. Tourism, a major industry in the D.C. area, was, as a result, negatively affected. This impact will be felt for some time, since overseas offices that give visas to foreigners seeking to visit the United States are just now reopening. At least 800,000 federal civilian workers were furloughed. Many chose to save their money instead of spending it at restaurants and other retail outlets in the District during the shutdown, driving down retail sales and further damaging local businesses, including those not directly affected by the shutdown.

This is just the beginning. Perhaps the most damaging impact is the message the shutdown sent to citizens, businesses and investors. It shows that, when partisan political issues are at stake, certain factions will not hesitate to damage the public interest.

Now we see that even if you “pull yourself up by your bootstraps” and manage to create a successful business, the policies of some politicians who claim to be supporters of small businesses can still damage you.

Originally published in the Washington Post. See:

William Michael Cunningham is a University of Chicago-trained economist, a graduate of Howard University and a native Washingtonian. His opinions are not an official statement of the U.S Black Chamber of Commerce.

Wednesday, January 16, 2019

Impact Investing Forum - March 31-April 3, 2019

Impact Investing Forum- Palm Beach County Convention Center, West Palm Beach, FL- March 31-April 3, 2019

15% discount code: CIIF2019

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, 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.

Wednesday, January 9, 2019

Maxine Waters Is No Wild-Eyed Radical

With the seating of the 116th Congress, Rep. Maxine Waters (D-Calif.) has taken control of the House Financial Services Committee, the House committee tasked with supervision of the banking industry and the Federal Reserve Board.

This is an enormously important role. As we surveyed tech- and financial services-related trade and business associations this week, one noted: “I can look into that policy inquiry for you. We are of course always looking to expand our relationships on Capitol Hill, and with the new majority in the House taking the reins, Rep. Waters will be very influential.”


Tuesday, November 20, 2018

Time to clean house at Wells Fargo

The megabank’s continued compliance problems suggest that all of its board members, along with 100 of its most senior managers, should be replaced to make way for real change.

Thursday, November 8, 2018

William Michael Cunningham on Impact Investing, Blockchain, and Crowdfunding

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

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.

So, that really influences what we decide to work on. We’re not looking at the money side first and foremost. There’s nothing wrong with making money, but it’s not the driving force in true innovation. The thing about true innovation is there’s always money down the road.
We are working on an investment vehicle that deals with homelessness and another that deals with HIV/AIDS,
mainly because we think these are interesting problems with interesting applications of financial technology; not for the money side.

There’s a cultural phenomenon in Western society, I’d say in American society—the dominance of the free market school of thought, which reduces everything to monetary values. I think we’re at the beginning of a cycle where that dominance is going to be challenged. This is what we’re seeing with impact investing. It’s looking at factors that aren’t explicitly part of the conventional schools of economic thought. We now know that there are social impacts that cut across all companies, all industries, and that impact a broader community, and you have to account for that within your financial models. That’s what we’re doing.

2. I’ve also heard you say that the firm you founded, Creative Investment Research, creates investment vehicles that are “honest.” What do you mean by that?

I mean “honest” with respect to the financial returns and the social impacts. Certain investments—coal in the 1950s, for example—were solid from a financial perspective, but they failed to account for the long-term social impacts of their product.

It’s the same thing with cigarettes. In the 1920s, Philip Morris was a great investment, but it didn’t fully account for the social costs, and there was a reckoning. We think it’s important to think about those social factors and make them part of your financial and investment model.

To not do so is dishonest.

3. Tell us about the Diversity Fund.

We think diversity and inclusion are leading indicators of management competence and therefore should lead to a portfolio with higher alpha.

Common sense will tell you that in an environment, a culture, and an economy that is getting more diverse all the time, that the diverse company is going to have more customers, and this should lead to higher revenue and higher profits, assuming their costs are under control. They should do better over the long term than the non-diverse company. We researched that [premise] and found that that is the case, but there is a but; it really depends upon the industry you’re in. If you’re in a consumer-products type of industry, of course, more customers is better than fewer customers, and that’s all it boils down to.

We did some of this initial work for DiversityInc Magazine. (See photo.)
DiversityInc Magazine, 2006
We did the statistical and investment analysis and found that our thesis about the higher alpha for a portfolio comprised of companies that are top performers within the sector diversity/inclusion was correct. So we put together a portfolio and posted it on Folio Investing, Steve Wallman’s online platform that allows you to create and monitor portfolios of stocks and bonds. It’s been a paper portfolio; we don’t have any real investments in it, but we continue to monitor its performance.

When we started out in 2005 to 2007, returns for diversity were huge. Those returns have shrunken a little bit. What we think is happening is that American corporations have gotten the diversity message. In 2006, it was easy to stand out. We were just at the beginning of understanding how diversity and inclusion led to higher returns. Now, in 2018, more and more companies get it. So, the differential in returns has gone down—which is a good thing from a social perspective—but a bad thing from the perspective of a portfolio manager.

4. How do you calculate social return?

We started out in 1989, looking at banks owned by women and minorities. We wanted to be the Moody’s, the Standard & Poor’s for these banks, because there was a class of institutional investors who wanted to deal with women and minorities in banks, but they couldn’t find any credible, real-time information, so, we created it. We created something called the Fully Adjusted Return Methodology, which is a way of calculating and capturing both financial and social return data. Our methodology is trade secret protected, so I won’t go into detail, but let me share what I can.

Black Enterprise Magazine, 1996
The financial return data was straightforward; it’s standard CAMEL: capital, assets, management, earnings, and liquidity out of FDIC reports. For social return data, we turned to the CRA, or Community Reinvestment Act database, and  HMDA, or Home Mortgage Disclosure Act database. Using those two data sets, we came up with an estimate of social return.

We discovered we could apply this methodology to non-minority banks, to other industries, and to entire economies.

For example, we know that the social return for hospitals is higher than the social return for guns. It just is. That’s easy, but that’s what you need to start.

This approach of looking at both social and financial factors and looking where you can generate abnormally high returns comes through in all our work. And yes, we make point estimates of social return.

5. Research shows that Black female entrepreneurs are only able to raise a fraction of the venture funding that white males do. How do we remedy this?

That’s absolutely true. What that means is that global investment returns are lower than they should be, because you are excluding from investment consideration an entire segment of the population—that is very talented and has good ideas—based on racial and gender discrimination, and that is lowering your overall returns—both social returns and financial returns.

You have to acknowledge what’s going on. And then you have to develop efforts to address those gaps with respect to capital access.

We’ve seen a number of [new] funds that are focused on African-American women entrepreneurs. What they’re finding is exactly what we predicted: that there’s a large group of very talented entrepreneurs with good companies that are well-positioned to make abnormally high financial returns that have been locked out of the market because of the irrelevant factors. Now that they are beginning to get capital, they are going to do well. We just rebroadcast our webinar, “How to Finance an African-American Woman-Owned Business in 2018,” and on the initial broadcast, we had about 40 African-American women entrepreneurs on the call, all doing very interesting stuff. So, we’ve helped uncover the demand for capital there, and we will continue to develop new tools that will flow capital resources into that space, because we think the returns are going to be higher than

6. What impact has the financial crisis had on communities of color?

Census data has shown that Black median net worth decreased 61 percent from 2005 to 2009, and a white family lost 21 percent of their wealth. Both are devastating declines in wealth, but whenever you have a 61 percent decline impacting a specific community over a very narrow window of time, it leads to greater social cost.

Long-term, we know that this decreases the economic activities for the economy overall, because if you lose 61 percent of your wealth, that means that you don’t have the money to invest in houses, invest in new businesses, invest in sending your children to school, all of which generate additional economic activity. It has been, and continues to be, devastating economically on the communities involved.

And it’s not just that one time period. From 1983 to 2013, the median wealth of Black and Latino households declined by 75 percent and 50 percent, respectively, and median white household wealth rose by 14 percent.

You may think: well, that’s on them, that’s their fault, that doesn’t affect me. Eventually, it will affect you. That’s the reason why you should care. No matter where you fall along the wealth distribution, our contention is that everybody is better off with a fairer, broader wealth distribution. The reason is purely economic; if everybody has more money, then everybody spends more.

7. You’ll be speaking at the FPA Annual Conference on the future of blockchain. Can you give an example of how blockchain technology is being used for social impact?

One of the most interesting ways we’ve seen blockchain being used for social impact is to enhance food safety—basically, tracking the path of food from its origin to its consumption point in a much more efficient way than has been done in the past.

IBM, Walmart, and a number of other companies came together on Capitol Hill earlier this year to talk about how they are using blockchain technology to enhance food traceability and transparency. When you have something like an E. coli outbreak, the current response of the food industry is to throw everything out, because you don’t know where it came from. Blockchain allows you to narrow that down. It allows you to say, we’re throwing out this pallet because it came from that farm, but we’re not going to throw out this other pallet. Blockchain technology can tell you where to look so you can run the analysis and determine faster and with much greater efficiency, which food products are contaminated.

If you’re really interested, I encourage you to look up Hyperledger and Solidity. Get involved and learn the software. Any finance professional in the U.S. should learn how to code in blockchain. If you really want to protect your job 20 years down the road, you will learn this.

8. You’ve been tracking Bitcoin since 2011. Is there anything wrong with Bitcoin as an investment?

No. I think it’s a fine investment, as long as it’s done in moderation and as long as you understand the risks that are embedded in the system. You should have some—a minimum $100 position—in Bitcoin, just so you can see how it works.

We like a number of tools, including Coinbase, which is a platform where you can buy small amounts of Bitcoin and other cryptocurrencies. It’s very elementary, but it’s a good way to get introduced.

9. You also serve as managing partner for National Crowdfunding Services. What role does crowdfunding play in society’s economic success?

This idea of social finance is a powerful one. The Statue of Liberty was crowdfunded. People sent in a dollar here and a dollar there. The civil rights movement was crowdfunded. Martin Luther King Jr. would go around to churches and they’d pass the hat to pay bail for people arrested during the civil rights movement. All of the digital currencies are crowdfunded. Some of the new financial technologies based on digital currencies—I’m thinking about ICOs—they all are crowdfunded.

This idea of pooling money together is a very positive and very powerful approach. We’ve seen what’s happened with sharing cars and sharing apartments and sharing scooters. We think we’re just at the beginning stage of applying this way of thinking in terms of crowdfunding and shared resources. We think it’s the future. Social financing is going to be a key part of the new economy.

10. In June 2016 you predicted Trump would win the presidency. How did you get it right when so many others got it wrong?

Our independence allows us to be objective. A lot of people were forecasting based on their preferences or based on their institutional ties. MSNBC was forecasting Hillary Clinton to win, because they really, really wanted her to win and their ties to that kind of social network didn’t allow them to look around the corner for other evidence that might run counter to what everybody was  predicting.

Independence and objectivity are our specialty. And having this level of objectivity is not costless. There are people, clients, institutions, and others who won’t deal with you because they think, this guy doesn’t toe the party line, he’s not saying what we want everybody to say.

In June 2016, looking at social returns, social data, as well as financial data, our models were saying, there’s something going on here; everybody’s undervaluing this candidate and this approach, and our model is quite clear in saying that he’s going to win.

Carly Schulaka is editor of the Journal. Contact her HERE.


The Future of Blockchain Join William Michael Cunningham at the FPA Annual Conference in Chicago, Oct. 3–5, 2018, where he will participate in a panel discussion on the future of blockchain. Learn how this emerging technology will influence the financial planning profession. Visit for event, schedule, and registration details. Learn More 7535 E.

Sunday, November 4, 2018

Opportunity Zones

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 available through the Opportunity Zone program.

Join us at our class or our webinar. 

Please join us as we discuss
  • Where Opportunity Zones are, geographically;
  • Creating a Qualified Opportunity Zone Fund;
  • What types of Opportunity Zone investments you can expect to see;
  • What companies looking for investments should be doing NOW;
  • Who are the major Opportunity Fund creators and investors;
  • New Opportunity Zone rules and regulations;
  • Who are the key OZ players in DC: House, Senate, Treasury and IRS Staff OZ directory.
  • Timing: When will the final rules be released.
  • Investment deadlines and timetables.
  • Economic Analysis of Opportunity Zone regulations.
  • How will Opportunity Zones impact minority communities.
  • Making investments or raising capital.
The cost for the webinar is $100. We will limit attendance to 20 persons.


Wednesday, September 19, 2018

Impact Investing, Blockchain, and Crowdfunding

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.”


Saturday, September 8, 2018

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

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. The table below lists some of the new funds that have been created to finance Black women owned businesses:

We believe this is a recognition of the higher than average returns that might be available in companies founded by those in overlooked communities.

As we noted in a recent article in the Journal of Financial Planning :

“Common sense will tell you that in an environment, a culture, and an economy that is getting more diverse all the time, that the diverse company is going to have more customers, and this should lead to higher revenue and higher profits, assuming their costs are under control. They should do better over the long term than the non-diverse company.

We researched that [premise] and found that that is the case, but there is a but; it really depends upon the industry you’re in. If you’re in a consumer-products type of industry, of course, more customers is better than fewer customers, and that’s all it boils down to.

We did some of this initial work for the magazine, DiversityInc. We did the statistical and investment analysis and found that our thesis about the higher alpha for a portfolio comprised of companies that are top performers within the sector diversity/inclusion was correct.”

We will continue to provide information in this space, and will schedule another broadcast of our webinar. If interested, please email us at

Thursday, August 23, 2018

Number of New Black Businesses "Jumps" by 400%

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: Also see: )
While we are encouraged by these initial survey results, we urge caution. These numbers are too divergent from past survey results to be immediately creditable. We are conducting a survey of African American businesses for the Houston Black Chamber of Commerce that will give us additional insight into the Guidant/LendingClub survey results. We note that Guidant and LendingClub are not African American-owned companies, and thus may have incorrectly structured the survey or interpreted the data. For example, we know that much of this "growth" should be seen as replacing African American businesses closed during the Great Recession.
We expect some will use these initial survey results as an excuse to support the current administration. It is unlikely that these survey results are entirely accurate. Nor can the administration can claim full and complete credit for these numbers if they are. Others will seek to dampen efforts to improve the business climate for Black businesses, always challenging. Finally, some will claim this survey shows that racism no longer is a factor in modern business life. We disagree.

Thursday, July 26, 2018

Asian Banks....again...

We have been tracking Asian Banks for some time. See: Bullish on Asian Banks Originally posted on the Street Insight section of 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, while RBB anticipates it will have $2.6 billion in total assets after closing.

On a May 21 call to discuss the deal, Hanmi President and CEO C.G. Kum said the transaction advances the bank's long-term objective of expanding its existing footprint outside of Southern California. The bank will continue to search for "strategic entry points" in attractive markets, he said.
RBB Bancorp President and CEO Alan Thian shared similar sentiments, and said on an April 23 call its First American International acquisition will provide "improved scale, efficiencies and profitability."

(We noted some time ago that Asian-American banks merge with other Asian-American banks).

In 2014, Kum told S&P Global Market Intelligence that Hanmi, a traditionally Korean bank, hoped to diversify its customer base to include more Chinese-Americans, south Asians and customers without any Asian background. Kum will retire in 2019, but Tenner does not expect his departure to vastly change the bank's business model.

William Michael Cunningham, an economist, impact-investing specialist, and an adjunct faculty member at Georgetown University, said Asian-American banks could grow by expanding their footprints in the broader American market, but doing so could "potentially" cause a bank to lose its status with the Federal Deposit Insurance Corp. as a minority depository institution, or MDI, he said.

"You've got to be a big bank these days in order to survive," Cunningham said in an interview. "... But it is something you have to think about, and you have to plan in order to be successful at." 

In an emailed statement, an FDIC spokesman said whether a bank loses its designation "all depends on the ultimate structure" of the resulting merger.

One of the goals of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 is to preserve minority character in cases of merger or acquisition. The FDIC provides technical assistance, training and educational assistance to the banks. The number of banks and thrifts with an MDI designation has dwindled in recent years.

More than 51% of an MDI's voting stock must be owned by one or more "socially and economically disadvantaged individuals," or the majority of the board and the community the institution serves must be predominantly minority, according to FDIC's definition.

Cunningham said there is a "varying degree of value" to being an MDI, noting that regulators have at times tended to "over-help minority banks."

"They're kind of all up in their business," he said. "That reduces management's flexibility. It's a regulatory burden that other banks don't have."

Cunningham also pointed to financial technology and large banks as challenges for MDIs, noting banks like Wells Fargo & Co. are free to conduct business in other languages.

"The big banks have sharpened their skills in the marketplace that MDIs frequent," he added. "That's one of the additional competitive pressures that these institutions face."

Monday, July 16, 2018

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

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 key point made by the panelists is that, beginning with slavery, laws and the justice system  have and continue to support structures that undermine the progress of Blacks in the United States. This, along with employment discrimination, has resulted in the lack of progress in reducing the economic disparity between black people and white people in the United States. The panelists noted that this gap worsened irrespective of education and other factors that, in theory, should enable black people to be at parity relative to their white counterparts with similar characteristics.  A recent report by Duke University’s Samuel DuBois Cook Center on Social Equity explores some myths surrounding this racial gap.

The panel ended with a number of policy proposals to improve the economic status of Blacks. The primary solution discussed was greater anti-discrimination compliance and laws that do not damage Blacks. Another solution was reparations. Suggestions on this front included outright wealth transfers or other methods, such as "baby bonds." Another proposed solution was a federal job guarantee for people unable to find employment in the private sector. 

Tuesday, July 3, 2018

Probability of Fed Rate Hike is 90.53%

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 times so far in 2018, the fact that the probability has fallen is consistent with our thinking.

The second forecast adjustment concerns inflation. Both Core PCE and CPI continued increasing in June and are now thought to represent a trend. Core PCE references living expenditures excluding food and energy. Yes, the impact on inflation of a trade war must be considered, also. The current Administration has initiated several tariff increases against China, Canada, Europe, NAFTA partners and others. A trade war makes it harder for the Federal Reserve to increase rates, since tariffs increase expectations concerning inflation by increasing prices for the purchased goods that are subject to a tariff. The Fed will want to be cautious about stoking runaway inflationary expectations. Indeed, the impact of the previous interest rate hikes and the looming trade war caused the Dow Jones Industrial Index to fall from 25320.73 on June 12th to 24174.82 on July 3rd. Uncertainty concerning trade will definitely have unpleasant impacts on industrial production, even with minor buffer policies, like allowing ZTE is resuming activities temporarily (Jenny Leonard, 2018).

In summary, the Fed will consider the impact on inflation of a trade war and might continue increasing interest rates but at a slower pace if the situation worsens.

Consumers are the third forecast adjustment factor. Our model uses two major indicators of consumer expectations: Consumer Sentiment, which indicates the confidence consumers have in the economy, and inflation expectations -consumer expectations concerning changes in the prices of goods. The Fed may wish to stop increasing rates in order to give consumer confidence time to adjust.

Given these factors, our adjusted probability of a Fed rate hike is lower than the unadjusted 90.53% probability. The next Fed Interest Rate Decision will be made public on Aug 01, 2018 02:00PM ET.

Research by Ryan Brand, Rongbin Ye, Impact Investing Analysts. EDITED BY WILLIAM MICHAEL CUNNINGHAM


Bloomberg Database. (2018). Dow Jones Industrial index & Yield Curve & Interest rate expectation. Retrieved from Bloomberg Terminal.  

Federal Reserve Database. (2018). FED Economic Data. Retrieved on July 3rd from:

Monday, July 2, 2018

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

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 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
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 average $1.3 million." We provide data-based advice and instruction, based on our years of experience, to help you over this hurdle.
Our webinar provides information on the current state of Black women businesses. We provide actionable information you can use to get financing for your business.
• Business Planning
• Your business credit history: Dun and Bradstreet.
• Data and Resources for Black women businesses
• The best non profit, local/state/federal resources
• Steps in the business financing process
• Protecting your ideas: intellectual property rights
• What type of financing products and sources/investors/lenders are best for your business: banks, credit unions, factors, hard money lenders, crowdfunding, credit cards, venture capital, digital currency, ICOs.
• Why you should seek out venture capital these days. Which ones to go to. How you should approach them.
Gwen HurtSPECIAL GUEST - Gwen Hurt is the founder and CEO of Shoe Crazy Wine. Her goal is to make her company a national brand. On June 15th, the firm was invited to present Shoe Crazy Wine during WalMart’s open call initiative, and, as a result, by 2019, will be sold in Walmart stores. Ms. Hurt will discuss her ongoing entrepreneurial journey.

To attend:


Monday, June 18, 2018

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

WEBINAR DESCRIPTION (15 seats total) COST - $20 to $60. NOTE: We accept Bitcoin. RSVP

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: 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 to market issues, discuss and describe exactly how Bitcoin works. We continue with a current summary of the market environment. 

Who should attend? Those just learning about bitcoin, those wishing to obtain bitcoin, those in the fields of Business, Banking, Technology and Tax. Because Bitcoin and the underlying technology will have a large impact, those who deal with these matters are encouraged to attend.


Overview and plan - what we cover
Introduction to Bitcoin
What's going on with the price of bitcoin?
Blockchain 101
The Economics of Digital Currency
How to get started with Bitcoin. (We answer the question: Is it too late to buy bitcoin? We also address the following additional questions: when should I sell? How should I trade bitcoin?)
Suggested Trading Plan and Strategy
Bitcoin-related Resources

Prerequisites: The following are required reading/viewing prior to the webinar:

Understanding What an ICO Is And Why Government Wants to Regulate It

Summary of bitcoin and its underlying technology-blockchain, by Henry Zhang, Impact Investing Intern. University of Toronto.

Thursday, June 14, 2018

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

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.

Wednesday, June 6, 2018

Blockchain for Social Impact Conference

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 pointed to the future. Supranational development banks, like the World Bank and the Inter-American Development Bank, participated and shared their insights on the development of blockchain technology, especially interested in applying blockchain concepts, technology, and mindset to solve problems. Despite the conservative nature of these institutions, given their scale and leadership position in the finance industry, their general attitude with respect to blockchain is open and accepting.

Conference discussion panels provided an incentive for the small firms to learn, utilize and deploy  blockchain technology projects. Moreover, we saw many excellent applications, like Popchain, a decentralized token for anonymous surveys,  already in use. On a panel concerning blockchain and climate, a weather tracking program based on the blockchain was described. The app is in use on the African continent. By including the local people into the framework, the social impact of the application is maximized: on the one hand, the weather tracking organization gets data on the climate in a specific region; on the other hand, participants receive much needed financial support for their lives and help ensure the long-term sustainability of the program.

The conference also served as a great platform for facilitating connections between startups and  small firms. BSIC provided many workshops for small business owners to discuss and communicate their business idea. For example, during the MITx Solver workshop, professionals were divided into  health, education, sustainability sectors. In the process, professionals and startup owners were able to combine their ideas and develop mutually beneficial cooperative opportunities.

The conference attracted professionals from many sectors. Private funders, bankers, policy makers, analysts, and students discussed ways to maximize the social benefit from this most cutting edge technology. BSIC provided vast opportunities for learning, developing, enriching and prospering.

I have several reflections on the conference content. First, many of the entrepreneurs I talked to did not have any previous familiarity with blockchain technology. While there were many experts in the technology, like the World Bank's Chief Information Officer and those from Consensys, others knew nothing about blockchain or were new to the technology. Second, based on  reflections I gathered from students attending (from George Washington University, Georgetown, Johns Hopkins and Howard) the discussions at the conference remained at an introductory level. Instead of breaking down technological difficulties, most discussions were on concepts and ideas.

Nevertheless, this conference is meaningful for the development of blockchain technology. As a political center, the headquarters of various large financial and political institutions, D.C needs its own blockchain "geek hub" that enables D.C entrepreneurs to benefit from the blessings sure to flow from this advancing technology.

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

         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 for Africa within the Industry 4.0 paradigm? How can Industry 4.0 be harnessed to improve the livelihoods of the continent’s most vulnerable people?

    The panel began with the following assumption: that Africa needs improved infrastructure to be able to fully maximize the benefits of Industry 4.0. Excessive regulation accounts for about half of the continent’s investment gap. Less restrictive regulations, more competition in the procurement of infrastructure projects and more public-private partnerships would reduce this gap. There is a need for greater and cheaper access to internet technologies. Governments also need to implement appropriate policies to boost manufacturing and attract investment into their countries.

Industry 4.0 might have negative implications for the African continent. Industry 4.0, by reducing labor costs through automation, undermines Africa’s "cheap labor" competitive advantage. This may result in global value chains not moving to Africa as happened previously with the movement of global value chains from more economically developed nations to Asian countries. Furthermore, Industry 4.0 might create an even wider gap between African and other regions by leading to a greater cumulative competitive disadvantage.

Current developments on the continent suggest that Industry 4.0 has the potential to improve the lives of Africans. Greater internet access in most countries has enabled easier and more accurate data collection for governments thereby making government policies more appropriate. Industry 4.0 has enabled the development of various financial technology, like MPESA, which has lowered transactions costs. Finally, the possible development of the Africa Continental Free Trade Area (AfCFTA) would make Industry 4.0 more impactful by enabling greater economies of scale.

Friday, May 25, 2018

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

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, 44 of 55 African Union member states have signed the agreement.

Non-signing states such as Nigeria may fear that the agreement will undermine national interests in trade, employment and local industry. They may also fear the agreement will impact revenue generation. Other issues with the agreement relate to the possibility of dumping cheap goods in neighboring states, thereby damaging local industries. These fears are valid and need to be considered in the final agreement. Existing trade agreements address some of these issues to a limited extent. For example, the World Trade Organization rules address dumping.

    The AfCFTA is expected to greatly benefit the continent. First, it should result in greater regional integration and make Africa a bigger player on the international trade scene. The United Nations Economic commision for Africa estimates that AfCFTA could lead to a 52.3 percent increase in regional trade. Further, AfCFTA is expected to make the continent more attractive to investors due to reduced trade barriers and a greater ability to take advantage of economies of scale.

      The panelists at the Wilson Center ( H.E. Dr. Arikana Chihombori Quao, Permanent Representative of the African Union to the United States of America, Donald Kaberuka
African Union High Representative for Financing of the Union and Peace Fund and 7th President of the African Development Bank (2005-2015), H.E Étoundi Essomba, Ambassador of Cameroon to the United States and, Co-Chair of the African Ambassadors’ Group, H.E. Kerfalla Yansane
Ambassador of Guinea to the United States) noted that AfCFTA is a first step towards realizing the vision of African co-operation expressed by African independence leaders such as Kwame Nkrumah, of Ghana.

       A key warning is that complementary measures, like better internal infrastructure linking member countries, are necessary to fully realize the benefits of AfCFTA. The African transportation infrastructure was designed, historically, by colonial powers to move people, goods and resources from the interior of the continent to the ports. There is little by way of internal continental transportation infrastructure. The map at left shows the PLANNED highway system. Even this effort has been delayed. This remains a huge issue.

       The main takeaway from the event was that the AfCFTA has the potential to make Africa more integrated and a bigger economic player in the world market. 

Tuesday, May 22, 2018

William Michael Cunningham to participate at the FCC Supplier Diversity Workshop

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, Internet Service Providers, cable operators, broadcasters, public sector agencies, and tech companies.

Mr. Cunningham will discuss strategies to increase social and financial return for corporate entities: in 2009, his firm, Creative Investment Research, provided to Pacific Gas and Electric (PG&E) Company social and financial credit ratings for community development banks serving areas of high social need within PG&E's service territory. PG&E made risk controlled investments in several minority and community based institutions. Performance data for the portfolio showed that it outperformed all alternatives. See:

The procurement workshop will be held at FCC Headquarters, 445 12th Street SW, Washington, DC, on Monday, June 4, 2018, from 9:30 a.m. to 4:30 p.m. EDT, in the Commission Meeting Room (TW-C305).

To register or for additional information about the "Supplier Diversity Workshop" please contact OCBO at (202) 418-0990 or by email -

Saturday, May 19, 2018

William Michael Cunningham at Blockchain for Social Impact Conference 2018

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 technology reaches the vulnerable populations who need it and stand to benefit from it the most."

Specific breakout sessions will be held on the following areas: Identity management, refugee resettlement, supply chain, energy, financial inclusion, human rights, democracy, and voting.

Mr. Cunningham will moderate a panel discussion titled: The Future of Impact Investing. He will be joined by Decker Rolph from Calvert, Kevin Gordon Barrow, Founder & CEO, Mark Labs, and David Nage, Managing Director at Apeiron Ventures, NYC.

For more information and to RSVP, please see: