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Showing posts from 2016

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

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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 th…

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

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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 go…

Crisis - The Current State of Black Banking

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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.
WHEN
Wednesday, August 24, 2016 from 4:00 PM to 6:00 PM (EDT

To RSVP: Crisis: State of Black Banking

Brexit: Now What?

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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 p…

Why Trump Will Win

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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…

Obama at Howard: Best Speech of his Presidency?

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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…

Takeaways from the IMF/World Bank Spring Meetings

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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 …

The Real Superpredators

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The Real SuperpredatorsThursday, April 14, 2016
Recently, 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 agains…

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

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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…

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

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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 investo…

Five Key Takeaways from Yellen's Monetary Policy Testimony

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Federal Reserve Chair Janet Yellen testified on Capitol Hill on Wednesday and Thursday.
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…

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

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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 res…

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

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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, i…

Martin Luther King's Philosophy on Investing

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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 time…