Illinois Files Discrimination Suit Against Wells Fargo

 

CHICAGO (Reuters) -- Illinois Attorney General Lisa Madigan filed suit Friday against Wells Fargo & Co., accusing the second-largest mortgage lender of steering blacks and Latinos into high-cost subprime loans.

"As a result of its discriminatory and illegal mortgage lending practices, Wells Fargo transformed our cities' predominantly African-American and Latino neighborhoods into ground zero for subprime lending," Madigan said in a statement.

High foreclosure rates resulted from the illegal sales practices, the state's attorney general said.

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Diddy’s Restaurant Owes Over $7,000 in Backed Taxes

The IRS has its sights on Sean "Diddy" Combs' Atlanta spot Justin's Restaurant, claiming it owes $7,373 in federal taxes, reports the Detroit News, citing public records. The restaurant, named in honor of his son, opened in 1998 and specializes in upscale Southern and Caribbean cuisine. An identically named restaurant in New York City closed a few years ago.

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Black News: Dr. Boyce Watkins Speaks on the Economy

Brought to you buy The Great Black Speakers Bureau, the #1 Black Speakers Bureau in the World

Dr. Boyce Watkins

www.BoyceWatkins.com

Hey peeps!

I am going to be on the Jesse Jackson Show Sunday morning at 8 am to discuss the Obama stimulus package.  The show is syndicated and you can click here to see a list of affiliate cities.  I'll be joined by my good friends and respected colleagues, Dr. Marc Lamont Hill (Columbia University) and Dr. Julianne Malveaux (President of Bennett College for Women).  I have a lot of thoughts on this measure, and I plan to write about it a great deal in the coming month. 

I also want to give a shout out to our friends and family in the Kentucky storm.  Their power has been out for several days now and I wish you all the very best as you confront this ordeal.  We have a lot of YBW family members in Kentucky, so my thoughts and prayers are with you.

I should also quickly note that Juan Williams from Fox News, the man I labeled as "Bill O'Reilly's Happly Little Negro", has struck once again.  Making reference to the first lady, Michelle Obama, Juan referred to her as "Stokely Carmichael in a designer dress." 

Most of you know how I feel about Juan, so there isn't much else to say.  I will only end this by saying that as long as there is money to be made, people will always be willing to embarrass themselves on TV.  The same way that Juan refers to Michelle as "Stokely Carmichael in a designer dress", I would refer to Juan as the "Flavor Flav who went to college".  Your integrity should be of greater value than your paycheck.  Juan should be ashamed of himself.

I write on the state of the economy below.  Please enjoy!

Boyce

www.BoyceWatkins.com

To join the Dr. Boyce Money Advice List, please click here.

Could the Economic Downturn possibly be a GOOD thing?

By Dr. Boyce Watkins

www.BoyceWatkins.com

I hate being the doctor who has to tell the patient he has cancer, but the truth usually sets you free (or so my mother told me): We are in the midst of an economic bloodbath. It’s tough to argue that an economy which shrinks by an annualized rate of 5% is still healthy. It’s hard to tell someone that 7.2% unemployment, with the most job losses since 1945, is a good thing. A 4,000 point drop in the Dow is nothing to sneeze at, even if you have plenty of tissue. Times are tough, we know that.

But if we focus hard enough, we might be able to find a few bright sides to all this. With hopes that no one chooses to kill the messenger, I am going to give it a shot.

1) It could always be much worse.

The United States has, according to some, the strongest economy in the world. Our economy could shrink like Rush Limbaugh’s body on drugs and still be disgustingly rich compared to the rest of the world. Don’t believe me? Consider the “fast-growing” Chinese economy, the one that everyone thinks is going to outpace the United States in the next few years. Our annual tax revenues are nearly 4 times greater than China’s ($2.5 Trillion vs. $670 Billion) and they have over 4 times more people than we do (300 million vs. 1.3 Billion). In other words, our per capita tax receipts are over 16 times greater than China’s. So, we’re far better off than most of the world, even when we’re broke.

2) If there were ever an argument for getting out of Iraq, this might be it.

It’s hard to declare war on random countries if you don’t have the money to do it. War is big business and attacking other countries is a huge financial investment. If you don’t think war is about money, then you may want to take a couple of Political Science and History classes. Perhaps these troubles at home will keep us from creating trouble abroad, since Americans have lost patience with irresponsible, arrogant war-mongering. The Obama stimulus plan is asking for over $800 Billion dollars to boost our economy. We’ve already spent nearly $600 Billion in Iraq. Rather than declaring War on Terror, President Obama has declared War on the Recession, which seems to be a far better investment.

3) If you want to buy cheap stocks or real estate, this is the time to do it.

When the market rises, everyone wants to buy stocks. People forget that you shouldn’t buy stocks when prices are high, you buy when the prices are low. Companies with plenty of cash are grabbing investment and real estate bargains that were hardly available a year ago. You should be doing the same if you can afford to do it. Investors who purchase stocks after major market declines tend to do much better than those who buy during booms. You hear me Warren Buffet?

4) Struggle makes us FOCUSED.

Although I tend to be a hardcore capitalist, a part of me misses the activism of the 1960s, when people cared about more than making a dollar. OK, I wasn’t around in the 1960s, but I’ve watched enough old movies. Going through tough times not only teaches one to pursue a higher purpose in life, it also leads individuals to more carefully scrutinize the state of affairs in our government. In fact, I dare to argue that the financial crisis was just what Barack Obama needed to secure his election over John McCain. Economic prosperity allows us the luxury of choosing our politicians based on silly issues, like gay marriage (as we did in 2004). When we are worried about putting food on the table, we look beyond the silliness and choose the most qualified and most intelligent person for the job (after ensuring that he knows Africa really is a continent). Finally, tough economic times make you more responsible in your own money management, as the threat of financial insecurity keeps us all on high alert.

Those are my points, so again, please don’t kill the messenger. I certainly do not celebrate a weak economy, but I am a firm believer that focusing too much on the door that shuts keeps us from appreciating the ones that just opened. There’s always light at the end of the tunnel, a pot of gold at the end of every rainbow, and….well, you get the point. It’s the toughness of tough times that make the good times good. Keep hanging in there, it’ll be ok.

Dr. Boyce Watkins is a Finance Professor at Syracuse University. For more information, please visit www.BoyceWatkins.com.  To join the Dr. Boyce Money Advice List, please click here.

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Black Hair should be a Black Business

The Black Hair industry is a multi-billion dollar industry. This industry has created other revenue generating vessels such as, conferences, schools, distribution, competitions, marketing, and even research. With an industry that is so huge and driven by the black dollar, one would expect that this industry would be under the direct control of those that make it successful, the black race. However, it is not. Though blacks still control many of the hair salons and barbershops, there is still a major disparity in many of the other businesses within this industry. Plus, recent trends have begun to emerge in the marketplace that threatens the ownership of those two entities. There is a new business model for salons, Korean-Owned and Black-Operated. This new model is growing rapidly and becoming a success among the community. While customers can continue to receive services from a familiar black stylist, the dollar ultimately goes to the Korean community.

It’s absolutely not a bad thing that Koreans are becoming fierce competitors and business owners in this black industry, so standing on the sidelines boycotting these establishments or calling for them to discontinue is a way that further perpetuates the blacks’ “right to survivorship” thinking. Blacks should not expect to be able to merely sit on a golden egg that was handed to them and not expect others to want a piece of it. The golden egg must be protected and guarded like the lion guards its kill from the hyena. Since the system we live under a capitalist system, the way a person or group rises to great wealth and sustainability is through competitive edges. Is this true? The retail segment of the black hair business is another entity that works to cipher the dollar from black community and be sent elsewhere. After research of over 800 black served beauty supply stores, we uncovered an ownership base of less than 5%. Of these same stores during a 6-month evaluation we found more than 97% of black consumers.
Is this a huge snowballing problem that should be addressed? Do blacks have the resources and opportunities within their communities but are simply not harnessing these opportunities? The problem of a low number of retail stores does not begin there. It begins at the distribution level. There is still a significant amount of black manufacturers of products but once these products leave the black manufacturers, they are placed in the hands of Korean distributors then the problem begins. Once the Korean distributors get a hold of the products they do two things: 1. They selectively distribute the products to retailers and sometimes at different prices. 2. They study the black products and soon create prototypes and begin marketing these prototypes to their huge Korean retailer base. Lucky White, CEO of Kizure Products, has boasted this as being one of her major dilemmas in her business slowdown. She is not only being competed against by other equipment manufacturers, the distributors are acting as lobbyist for her competitor.

In an industry that resulted in billions due to pioneer, Madame C.J. Walker, a black woman born into poor conditions in the early 20th century, one would expect the blueprint to this industry to be studied and executed by blacks across America but sadly this has not been the case. Why? It is not as simple as setting up shop and waiting for high profits anymore. Retail storeowners are facing many competitive obstacles such as capital, a large selection of products, and pricing. In most cases, getting an account with a Korean distributor as a Black person means you face an uphill battle. First, the distributor must approve your location before agreeing to supply your store. If they agree, now payments must be made in cash upfront with no delayed terms of payment. This is perhaps the hugest obstacle a new black storeowner faces. Then, this is a rippling effect. If distributors are consuming the capital instantly, then there is less available for the new black owner to obtain an abundant variation of products. Lastly, the pricing advantage many Korean stores are able to provide for the black consumer keeps them coming back over and over again, showing very little regard to a black storeowner down the block. This pricing advantage is also a resource for the Koreans because of the relationship they have with the Korean distributors.

However, the nail has not yet been driven into the coffin of the black lockout of their stake in this industry. I am living proof. I emotionally entered into this industry when I was thrown out of a Korean-Owned beauty supply store while I was attempting to make a huge purchase for my salon. The owner felt uncomfortable with me browsing and being selective. His frustration grew to rage so he then threatened me with a golf club eventually throwing me out of his store. Like many black men, I didn’t know of the huge lockout that took place in this industry until I had already signed a $5,000 lease for a location. My uphill battle began as distributors wanted cash and many didn’t even return my phone calls. Little did many of them know my persistence is abnormal. I took daytrips on airlines to physically walk into locations in New York and Miami until I got what I wanted. My goal was to give our community options in shopping while receiving the respect they deserved. My one location turned into three in 18 short months. Trial and error was my ally. As I learned, I perfected. Here a few things that an aspiring owner can implement.

Communicate with other owners – Find other owners willing to communicate with you in your market and even throughout the country. They are more than willing to share valuable information with you and you should do the same.

Automate the Store – In this fast-paced era, do not rely on spreadsheets and manual inventory tracking. This can slowdown your customer fulfillment process and tie up valuable time that could be used elsewhere.

Be a competitive and creative owner – Do not do what the next guy is doing, do what he isn’t. Establish store niches.
Establish Non-Competitive Clauses – Secure your market share within your mall at the least. Do not leave the gate wide open.

Manage the Cash Effectively – From your gross, pre-allocate percentages for capital expenditures, marketing, taxes, procurement, payroll, etc and have different bank accounts for each one with the monies being deposited systematically. Do not rely on self to divvy up or disburse the funds as you receive revenue.

Form Alliances Outside the Black Hair Industry – I once went to a children’s theme park with my sons and discovered that a local pizza franchise provided the pizzas for the business at a discounted rate. These opportunities exist for beauty storeowners as well. I established plenty. One place is funeral homes.

Seek Consulting – Never think you know it all. I had two beauty storeowners that acted as my mentors for the first year. I compensated them for intense assistance but for quick advice they were glad to help. Expect nothing for free. Allocate funds for this too.
Location, Location, Location – Do not pick a convenient location for you, pick a convenient location for the customer. There are moneymaking opportunities even when there is an existing beauty store. Don’t be afraid of the competition. The way you operate may be the way the customers in that market prefer.

Though I have highlighted distribution as the component needed, it is not the way to launching strategic efforts, and neither is boycotting. Building up the amount of black-owned retail stores is the first step in a strategic plan like this. The demand must first be created if a black distribution plant is to be successful. The black hair business is a cash cow but in its current state the cow is jumping over the moon with the moneybag heading to other communities.

Devin Robinson is the author of Taking it Back: How to Become a Successful Black Beauty Supply Store Owner who resides in Atlanta, GA. Visit his website athttp://www.takingitbackblack.com/.

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Dr. Boyce Watkins on Financial Management Tour in New York City

FOR IMMEDIATE RELEASE

CONTACT:
www.boycewatkins.com
Shauntay Prewitt
Assistant@boycewatkins.com
(901) 413-0203

Prominent African American Syracuse Professor on Media Tour discussing Debt Management

Syracuse, NY—January 5, 2009—Prominent Syracuse University Finance Professor Dr. Boyce Watkins, one of the leading Black Financial experts in America, will be doing a television and radio tour promoting his new website http://www.financiallipo.com/ and to assist listeners in understanding the importance of smart financial decisions. “America is in a financial mess. It is going to take dramatic action for us to find our way out of the financial gluttony that has crippled millions of households across America,” says Dr. Watkins, who has been a Financial Professor for the past 15 years. “FinancialLipo is my way of contributing to the need for financial fitness in America.”

Financial Lipo is the active process of cutting the fat, building the muscle and going from financial fat to fitness. Dr. Watkins, an expert in Financial Psychology, has created a system that forces Americans to confront their reasons for being “financially overweight”, and learn effective methods for obtaining financial peace, health and prosperity. The site trains visitors to negotiate with their bill collectors to have their debt reduced and to become empowered by the law to get negative items removed from their credit reports.

Dr. Watkins says that “today is the day” that we should all get a firm handle on our finances. By doing this, people will be able to be more competitive during this down economy. Those who subscribe to his website will be empowered with the knowledge to overcome financial obstacles and become financially responsible.

Dr. Boyce Watkins will make the following appearances:

· January 8, 2009 am 8:10am - The Ed Lover Show - Power 105.1 - The #1 radio station in New York City.
· January 15, 2009 at 9am - The Morning Show with Mike and Juliet - Nationally Syndicated Television - visit http://www.mandjshow.com/ for local listings
· January 9, 2009 at 4pm - The Wendy Williams Experience - Syndicated to 11 million listeners nation-wide.
· January 11, 2009 at 9pm - Hot 97 Street Soldiers - NYC
· Essence Magazine - Smart Money Moves for 2009 - February 2009
· The Steve Harvey Morning Show - TBA


For more information, please go to http://www.financiallipo.com/.

Dr. Boyce Watkins is a Finance Professor at Syracuse University. He does regular commentary in national media, including CNN, ESPN, BET and CBS Sports. For more information, please visit www.BoyceWatkins.com. For interviews, please call Shauntay Prewitt at (901) 413-0203 or email her at Assistant@boycewatkins.com.


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