African-American Unemployment figures always masked by totals

On Friday, the Labor Department released the unemployment figures for March 2009. Keith Hall -commissioner of the federal Bureau of Labor Statistics- made the following statement before the Joint Economic Committee of Congress.

Labor market conditions continued to deteriorate in March. Total nonfarm payroll employment decreased by 663,000, and the unemployment rate increased from 8.1 to 8.5 percent. Since the beginning of the recession in December 2007, job losses have totaled 5.1 million, 3.3 million of which occurred in just the past 5 months.

Keith Hall’s U.S. Unemployment Statement before the Joint Economic Committee.

Those are pretty sobering numbers. But African-American unemployment always outpaces the general number leaving black folks more vulnerable to the effects of the continuing economic downturn.

In January of this year, U.S. unemployment stood at 7.6%, but the number for African-Americans was 12.6%. In February, unemployment figures had risen to 8.1% and 13.4% for Black workers. And now that we’re at 8.5% nationally, I’m sure Black unemployment is near or above 14%.

According to Hall, manufacturing, construction, and temporary help services have been hardest hit by the recession, accounting for almost two-thirds of the job losses during the recession. These are areas that employ a high number of African-Americans.

Anyone looking to reinvent themselves should consider health care or education which have not seen as many job losses as some other industries. As the husband of a nurse, I can say that my wife’s organization continues to look for more nurses just like hospitals around the country.

Those who are not able to get an advanced degree should think about becoming a medical assistant or pharmacy technician. This certifications can be obtained in less than a year. If you have family members who are having employment problems, think about suggesting these options for them.

A friend and I were talking on yesterday about how we both recently saw young black men working in Walgreens as Pharm Techs. There are a lot worse things that those young brothers could be involved in, and their certifications should serve them well while the economic crisis shakes out.

Black workers are going to have to reinvent themselves if the employment gap is going to close. Relying on manufacturing jobs -which helped raise African-Americans into the middle class a couple of generations ago- is a losing proposition.

Obamas take London by storm, IMF and N. Korean on agenda

The Obama’s are the talk of Great Britain, as the POTUS and FLOTUS met with Queen Elizabeth II and then Meet the Browns at 10 Downing Street. The President gifted an Ipod to the Queen, loaded with footage from her 2007 visit to the United States. This morning on CNN, the said the Queen is pretty tech savvy and sports the same Blackberry as President Obama.

Tabloids and newspapers are scrutinizing every fashion choice made by Michelle Obama, and are debating who touched who first: whether the Queen placed her hand around Michelle Obama before placed her arm around “her majesty.”  It’s given the Brits lots to talk about today.

As regards to the actual proceedings at the G 20 Summit, much of the talks have centered around economic troubles around the world, though President Obama and South Korean president Lee Myung-Bak both made stern warnings against an impending North Korean missile launch their government claims is a peaceful research effort to put a communications satellite into orbit.

Also out of London, the G20 is set to triple the resources of the IMF (International Monetary Fund) to $750 Billion.  These funds will be used to help developing economies.

Photographs: John Stillwell/WPA Pool/Getty Images. Kirsty Wigglesworth/Associated Press

Sources: The Washington Post, The Guardian, Toronto Star, Wall Street Journal

Video: Roller Coaster Model of Housing Prices

This is a pretty clever way to look at American Home Prices adjusted to inflation since 2007.  This video using a virtual roller coaster to represent home values was uploaded to YouTube exactly two years ago, before the housing market totally melted down.

An updated version would have the roller coaster falling right off the tracks.  Thanks to Greg Elin from the Sunlight Foundation for sharing this with me.

President Obama lays out plan for ailing auto industry

In a statement directed at Americans nervous about the auto industry, President Barack Obama outlined his administrations further involvement in helping the struggling auto makers.  That includes the Obama administration forcing GM Chairman and CEO Rick Wagoner to resign.

The President said that the plans formerly submitted by GM and Chrysler are unacceptable, and he wants them to take another run at it.  In the meantime, they will have to submit to guidelines set by the federal government in order to receive additional federal funds.  Obama said GM and Chrysler will have “limited additional periods of time” to produce plans that inspire confidence from the American citizens who their are asking to give them aid.

He also called on others to make concessions, including auto workers and their unions, auto dealers, and suppliers. Though much of the news is bleak, Obama cited GM producing the 2008 North American Car of the Year (Chevy Malibu), and Chrysler for the Buick’s recognition in the area of reliability.

Obama said that the business plans submitted to the government were “not strong enough” and additional measures were necessary for them to become viable once again.  The first step to that end was his auto task force pushing Wagoner out as CEO.

The government will give GM 60 days of working capital to try to push through it’s financial situation.  He paused to emphasize the fact that the government has “no intentions in running or interest in running GM.”

Obama said the situation at Chrysler is “more challenging” and that the company may not survive without a partnership with Italian automaker FIAT.  The Obama administration is giving Chrysler 30 days to work out a deal with FIAT in order to receive up to $6 Billion in additional government aid.

After detailing the state of the trouble car companies, Obama acknowledged that bankruptcy is still an option.  He look to soften the effects of the ‘B’ word by saying that neither company would be broken up and sold off if bankruptcy codes were used.  Obama listed four steps his administration is focused on relating to the auto industry:

  1. Ensuring relief funds get to designated entities as soon as possible.
  2. Increasing credit flow
  3. Alerting consumers of tax benefits for cars purchased between Feb. 16th and year end.
  4. Pursuing a program with Congress that offers tax incentives to those purchase energy efficient cars to replace less efficient models.

Obama ended his statement by underscoring the importance of the auto industry in the United States.  He said that it wasn’t important just to the the Midwest which has been hardest hit, but all Americans.

Photo credit CNN.com

Game Sold Not Told: Madoff’s $65 Billion Ponzi Scheme

BY JAMES “BIRD” GUESS

Wall Street investor conman, Bernie Madoff, made off with billions of investor’s money and on December 10, 2008, he confessed to orchestrating an estimated $65 billion “ponzi scheme,” that is considered the largest act of investor fraud ever by a single person. On March 12, 2009, Madoff appeared in court and pled guilty to 11 felonies. He faces a maximum sentence of 150 years in prison, and will also have to pay mandatory restitution and fines estimated at $170 billion.

After prosecutors froze Madoff’s accounts and seized his business and personal assets, they accounted for only $830 million. Prosecutors are expected to investigate members of Madoff’s family as well. Former investors who contributed to Madoff’s investment funds, who profited and cashed out, may be asked to return some of their “false profits” to remaining investors in order to make them whole.

Despite the billions in losses, fines, and public outrage, Madoff did not implicate any other person who may have known or helped him pull off this sophisticated scam, instead he went out solo. What!! Are you telling me one man pulled off the largest investment scam in history by himself? Yeah right!

Federal investigators definitely have their work cut out for them, but I would not be surprised if some of them profited from it and knew the music would stop playing sooner or later. Beginning in 1992, The Securities and Exchange Commission (SEC) responsible for regulating the stock market and investment products, investigated Madoff’s firm eight times over 16 years, and his firm was cleared or paid small fines each time.

In 2005, financial analyst Harry Markopolos sent a detailed 17-page report to the SEC, accusing Madoff’s firm of operating The World’s Largest Fraudulent Hedge Fund. He even sent his report to the Wall Street Journal but editors declined to run the story. So lets not rule out that Madoff was aware of Markopolos’ report and could have compensated SEC investigators and editors of the Wall Street Journal to perpetuate his ponzi scheme.

What is a Ponzi scheme? It’s a scam named after Italian immigrant Charles Ponzi who in 1920 promised people 50% returns on their money in 45 days, and 100% returns in 90 days. The scheme operates by taking beginning investor’s money and using new investor’s money to pay off the beginning investors. For example, lets say I promised you that if you invested $100 with me, I would return $200 back in 30 days (100% profit).

Now all I ask is that you encourage more people to invest with me. Well, after you told your friend, he comes in one week later with his $100, and I will now use his $100 and the $100 you originally gave me to pay you the $200 I promised you in the beginning. Got it? I will encourage your friend to advertise for me as well and when new investors come in, I will use their money to pay him. Everything works so long as new cash continues to flow in, but eventually the music stops playing and the people who invested last will lose.


I can only imagine how the victims of Madoff’s ponzi scheme feel. So when it comes to your money, I strongly encourage you to always ask questions and continue reading and studying business, and finance so that no one can financially take advantage of you.

New York A.G. Andrew Cuomo: “A.I.G. made more than 73 millionaires”

In an article by Louise Story of the New York Times, N.Y. Attorney General Andrew Cuomo says that seventy three people at AIG received at least $1,000,000 in bonuses. “A.I.G. made more than 73 millionaires in the unit which lost so much money that it brought the firm to its knees, forcing a taxpayer bailout,” Cuomo said in a letter to Representative Barney Frank.

Read Andrew Cuomo’s entire letter to Barney Frank here.

One of my first questions is, where is the U.S. Attorney General’s office on this one? I’m not suggesting Cuomo is overstepping his boundaries nor that Holder is negligent in his duties, but where does the top U.S. Attorney fit in on this?

The President said he is looking for Treasury Secretary Timothy Geithner to use “every single legal avenue” to get taxpayers money back from A.I.G. executives. Shouldn’t “every single legal avenue” involve the A.G.?

Anyway, here’s a portion of Cuomo’s letter to Frank:

AIG now claims that it had no choice but to pay these sums because of the unalterable terms of the plan. However, had the federal government not bailed out AIG with billions in taxpayer funds, the firm likely would have gone bankrupt, and surely no payments would have been made out of the plan. My Office has reviewed the legal opinion that AIG obtained from its own counsel, and it is not at all clear that these lawyers even considered the argument that it is only by the grace of American taxpayers that members of Financial Products even have jobs, let alone a pool of retention bonus money. I hope the Committee will take up this issue at its hearing tomorrow.

Furthermore, we know that AIG was able to bargain with its Financial Products employees since these employees have agreed to take salaries of $ 1 for 2009 in exchange for receiving their retention bonus packages. The fact that AIG engaged in this negotiation flies in the face of AIG’s assertion that it had no choice but to make these lavish multi-million dollar bonus payments. It appears that AIG had far more leverage than they now claim.

AIG also claims that retention of individuals at Financial Products was vital to unwinding the subsidiary’s business. However, to date, AIG has been unwilling to disclose the names of those who received these retention payments making it impossible to test their claim. Moreover, as detailed below, numerous individuals who received large “retention” bonuses are no longer at the firm. Until we obtain the names of these individuals, it is impossible to determine when and why they left the firm and how it is that they received these payments.

The outcry is too great, the spotlight is too bright.  This is not going to end well for the 73 millionaires or the other 400 or so people who received these “retention bonuses” from A.I.G.  They should have been good with their “retention jobs” after the bailout.

What are they being retained for anyway?  For running A.I.G. into the ground?  I’d like to see where they plan to go and get similar jobs in this market.

President Obama wants AIG bonuses back, Dow fizzles after mostly good news

President Barack Obama was very clear about how he felt regarding recent reports of bonuses paid out at AIG (American International Group), that surfaced over the weekend. “This is a corporation that finds itself in financial distress due to recklessness and greed,” the President said in remarks made at the White House with Secretary Timothy Geithner present.

Obama went on to talk about the money that AIG has received from the U.S. Treasury and the $165 million in bonuses the company paid out on contracts signed be fore receiving TARP (Troubled Asset Relief Program) money. “I’ve asked Secretary Geithner to use that leverage and pursue every single legal avenue to block these bonuses and make the American taxpayer whole,” Obama went on to say.

Hear President Obama’s Remarks from the White House.

New York Attorney General Andrew Cuomo sent a letter to AIG requesting who received the bonuses (sent out on Friday), their job description/title, and performance. Cuomo set a deadline of 4 p.m. on Monday as at deadline, but had not heard back from the company when the time came and went. He’s now in the process of issuing subpoenas.

There’s no doubt that AIG executives should make it easy on everybody and return their bonuses. A company who today was UP sharply to 83 cents should do everything it can to inspire confidence. As an owner of AIG, I hope these execs make the right call and give the money back.

AIG CEO Edward Liddy says there’s nothing that the company can (legally) do about the bonuses, yet as a leader he should be able to persuade these execs to give way to their true bosses – the American people.

The Dow Jones Industrial Average was poised to end up for a 5th consecutive day, up triple digits at some part of the day. But just before the closing bell, stocks dipped, and the Dow ended down about 7 points. It was still another good day for the Dow as stocks in the positive outnumbered those that were down 3-1.

I was watching Rick Sanchez at Georgia State host an entertaining show on the economy and for most of the show the green arrow was pointing up. CNN is devoting the bulk of their coverage to the economy this week. Sanchez referenced letters/emails he’d received advising the station to cover topics that people want to see instead of catering to the “American Idol” crowd all the time.

One letter cited the ratings and overall media coverage John Stewart’s interview with CNBC’s Jim Cramer had received. The writer asserts that Mr. Stewart is actually using facts (something that the media is having to come to grips with) to call Cramer on the carpet.

Stewart also rightly argues that viewers are a lot smarter than these shows give them credit for, and should be more serious due to the fact that people are trusting their money to the advice of the hosts. I give Cramer credit for taking the heat for the entire TV Financial guru market.

This post was written based on stories from Yahoo! Finance, The New York Times, Associated Press, and Politico.

Congresswoman Eddie Bernice Johnson and Freedom Baptist Church present: Dallas Job Fair and Training

Congresswoman Eddie Bernice Johnson and Freedom Baptist Church will host a job fair and traning session in Dallas on Thursday. The event will be held at Freedom Baptist Church from 9 a.m. until 2 p.m.

Dallas Job Fair and Training

HOSTED BY:

Rep. Eddie Bernice Johnson

&

Freedom Baptist Church

Date: March 12, 2009

Location: Freedom Baptist Church

3715 South Westmoreland Dallas, TX 75233

Tel. 214-339-2259

Time: 9 a.m. – 2 p.m.

John Stewart lampoons CNBC and Rick Santelli

It’s amazing how upset talk show hosts get when a guest cancels on them (remember David Letterman and Sen. John McCain?).  But when they do get spurned, it often brings out the best in them.

There was obviously extensive research that went into assembling the above video for the Daily Show.  Besides John Stewart chiding CNBC host for Rick Santelli for “bailing out” on a scheduled appearance, he meticulously details instances where the financial channel’s hosts come up short.  It’s well worth watching the entire 8 minute clip.

Affordable housing organization taking the lead in building homes, restructuring lives

By Gordon Jackson

It may be one of the greatest turn-a-rounds of an inner city community in the country. House by house, block by block, West Dallas is changing, distinctly for the better.

A lot of determination and grit by several community and housing organizations and churches have served as the catalyst for the neighborhood’s illuminating revitalization. Builders of Hope is included among those groups.

“It’s all going uphill. We’ve been in the valley; now we’re going to the mountaintop,” said Patrick Crawford, a new homebuyer and West Dallas resident.

Bordered by Interstate 30 on the south, Loop 12/Walton Walker Road on the west, Interstate 35 on the east and the Trinity River on the north, West Dallas was once slated as one of the country’s poorest and most blighted neighborhoods in the nation. Jobs were scarce and crime was high. Several lead smelter plants located in the area once polluted the air and poisoned many who lived near them.

West Dallas was once one of the heavily African American and Hispanic sectors of the city suffering from discrimination and racially-based negative perceptions that kept development out for several decades.

Hard core lovers of the community did not give up. Class action lawsuits eventually closed down most of the lead plants. Fresh new political leaders, many of them people of color, started making the area a top priority and grassroots community organizations finally started winning both political and commerce-related battles to draw positive economic development.

The most glaring and visible difference has been seen in housing. Over the past decade, modern-day and attractive housing units, both public and private, both single- and multi-family, have replaced barrack-like projects complexes, once eyesores to the community’s look and feel.

“At the present time, the big improvement is the homes themselves, knowing that economic development would come,” said Rev. Arrvel Wilson, pastor of West Dallas Community Church. A staple in the West Dallas Community, Wilson’s church also runs the West Dallas Community Development Inc. and the West Dallas Community School. “I also see the hope of new jobs coming as you bring in new businesses.”

Wilson further credits Builders of Hope Community Development Corporation, who got in the fight from the beginning. Its founder, Norman Henry, first started making changes through Voices of Hope Ministries in 1982, helping youths and their families with resources and life skills to fight and overcome the community’s ills from poverty.

“His passion and drive came from helping kids,” said Willard Mardenborough, BOH’s Community Sales Manager. “He saw that, with some of the kids that they had, he was able to go to some of their homes and saw the need for building homes in West Dallas. There was a lack of homes and the ones there wasn’t sufficient or in good condition.”

That’s when Voices of Hope Ministries transformed into Voice of Hope Community Development Corporation in 1998. Henry and the board of directors changed the name to Builders of Hope CDC in 2002. Starting with building a couple of homes, the organization has boomed to their current major project, a 72-unit single family subdivision in West Dallas’ Eagle Ford community.

Now, the next step: bringing in homebuyers. But it’s the kind of new home owners BOH is targeting: many of the same West Dallas and other low- to moderate-income residents who still believe there’s such a thing as quality inner city. They include the single parent and blue-collar worker who’s rented all of their life.

BOH’s goal: transform them into homeowners.

“We saw the vision of showing that person how simple it is to own their home and give them affordable and quality housing,” said Mardenborough. “As far as affordability, we wanted to help people like first-time buyers and single moms, who didn’t have the right home to live in to build their self-worth.

“It’s not all about selling a home, it’s about someone building a community relationship, someone working with one goal of helping someone else.”

A free BOH First-time Homebuyers seminar covers every inch of ground of what it takes to be a homeowner. Several skilled professionals are brought in, such as a tax specialist, mortgage lender and a credit management specialist who helps the prospect set a budget.

“A person can say they want to buy a home but may have never thought it out completely. This gives them a comprehensive education process. Even if they may not quality at that time, they’re a better person for it.”

The quality of the home is also important, something BOH has taken very seriously. Comparing with other companies, Mardenborough said: “Usually they build affordable homes, but the quality is lacking.”

High-energy efficient homes, with solar boards and solar decking in place, are some of the extra steps taken by BOH, according to Mardenborough. Their homes also use more lumber per inch than other builders with higher grades of windows, insulation and air conditioning standards.

“The thing is to see someone who thought they could never get a quality home and to see their faces when they sign over the documents and they get the keys to their home,” Mardenborough said. “And it’s not a tacky home, we’re talking about solid brick.”

Patrick and Antoinette Crawford share those sentiments. Before they became a couple, they were both raised in West Dallas, but their separate lives took them out to live in other parts of the Dallas-Fort Worth metroplex. Still, as young adults, their love to nurture and improve the community drew them back to their church, Greater Mt. Olive Church of God in Christ, and other social endeavors.

“We did everything on this side (of town),” Antoinette said. “We were always coming back out here. Our church is out here so it only made sense for us to be here and do everything in the community.”

Patrick, a construction worker, wanted to stay close his father, especially after his mother died.

The couple, married for three years, after a three-year courtship, realized that buying a home in West Dallas would “complete them.” They went to Builders of Hope, with whom Patrick was already familiar, having formerly worked with the organization in their youth programs. Despite not qualifying in their first application, the Crawfords persisted.

“There were times in the process that we kind of got frustrated and wanted to give up,” said Antoinette. “With them, they just kept you motivated. We decided to just keep going and be patient.”

Finally, they were approved and began a rigorous but successful three-month process. Last month, they, along with daughters Xyondria, 2 and Daja, 7 months, moved into their $125,000 three-bedroom, two-bath home in Eagle Ford, complete with a one-car garage and spacious backyard. Their total loan package included grants that covered their down payment and closing costs. They’ve returned to their home community, more excited than ever to strive and make West Dallas a better place to live and work, in their own way.

“We just about know everybody in the neighborhood. It’s more like there’s no lack in terms of being able to get things done,” said Patrick. “That’s always a plus to be able to effect your community directly.”

“When someone purchases a home, there’s a responsibility that comes with it,” Mardenborough explained. “So, yes, they want to perform better at their jobs, make sure they do all the necessary things to keep their homes. They become better citizens and try not to do ignorant things to lose the home.

“This helps the entire community and city. You help someone get into a home you’re building communities and relationships with other individuals. You’re building neighborhoods. They tend to look out for each other, wanting to help each other out. It’s a rippling effect.”

The Eagle Ford community is in West Dallas’ southwest corner, near where I-30 and Loop 12 intersects. Pinnacle Park, a 900-acre major retail and business district, along with Pinnacle Pointe, across the highway, are all short distances from the community; even walkable in good-weather days.

Other parts of west Dallas continues to flourish as well. Bridges that connect the community, north from Hampton Road and east from I-35, are being expanded and built for easier traffic access from downtown and North Dallas. The Dallas Housing Authority, which has championed the cause of quality public housing, has its attractive headquarters down Hampton Road, along with the Lakewest YMCA.

The community’s newest jewel – a brand new Mattie Nash/ Myrtle Davis Recreation Center – is highly anticipated. The 21,000 square foot facility will feature a NCAA regulation basketball court, weight room, multipurpose room and computer lab. Construction is scheduled to begin this month to be completed in one year.

All such amenities are working together, complementing Builders of Hope’s initiatives to not just build homes, but quality lives.

“The affordable market is still the best market to be in,” said Mardenborough. “Because, if you properly educate the buyers and how to keep their homes, what they need to do with the upkeeps and follow throughs, they’ll commit to it.

“Some of these people’s family members never had a home, so it brings a special status to them. They’ll say now I have a home; I don’t have to rent and pay someone else’s mortgage. When I close the door, I know it’s mine, I can live there as long as I want.”

Builders of Hope will hold a First-Time Homebuyers Workshop in March 14, at their Model Home, at 4114 Chippewa Drive in Dallas. For more information, call 214-915-9522 or, to register, email willardm@buildersofhopecdc.com.