black…MYstory

You know, it’s bad enough that we are forking over what is could end up as trillions of dollars in bailouts but, now we find out that the many of the very banks and financial institutions that taxpayers have been helping out thumbed their noses up at hiring some of the very people that are getting them out of a jam now — American workers.

Just look at what the Associated Press uncovered:

Banks collecting billions of dollars in federal bailout money sought government permission to bring thousands of foreign workers to the U.S. for high-paying jobs, according to an Associated Press review of visa applications.

The dozen banks receiving the biggest rescue packages, totaling more than $150 billion, requested visas for more than 21,800 foreign workers over the past six years for positions that included senior vice presidents, corporate lawyers, junior investment analysts and human resources specialists. The average annual salary for those jobs was $90,721, nearly twice the median income for all American households.

The figures are significant because they show that the bailed-out banks, being kept afloat with U.S. taxpayer money, actively sought to hire foreign workers instead of American workers. As the economic collapse worsened last year — with huge numbers of bank employees laid off — the numbers of visas sought by the dozen banks in AP’s analysis increased by nearly one-third, from 3,258 in fiscal 2007 to 4,163 in fiscal 2008.

Now, think about that.  You see, the excuse that allowed for the explosion of H1-B visas in this country has been that companies can’t find Americans with the needed skills to fill those positions.  However, in our current economic situation, I find it hard to believe that there aren’t enough skilled American workers to do these jobs (actually, this argument didn’t hold water in better economic times, either).  But, the biggest slap in the face is that while these banks don’t have a problem with taking the American worker’s tax money, in the form of a bailout, they appear to have a problem offering jobs to Americans.

Sadly, this is just one more reason why you don’t just shove more money into the hands of people that messed up the money the first time — it’s clear that they don’t exercise the proper judgement needed to make good decisons.

Popularity: 18% [?]

It’s funny how people accept a story without asking critical questions or seeking out answers for themselves.  I remember go back and forth with a few co-workers who believed that the crazy jumps in oil prices were simply based on supply-and-demand.  I found myself asking, at the time, why was demand going down and the prices kept going up.  I shared with them about how speculators had been raiding this market in the same way they had done the housing market and that if any real oversight took place, oil prices would drop almost overnight.  Well, we didn’t get oversight.  Instead, we got the clear indicators of a recession and the prices dropped precipitously.

Last night, I was flipping through and caught part of a story on 60 Minutes that told how speculation in the oil market (even by some financial companies who actually held their own oil supplies) drove up the cost of this commodity. You can check out the videos below:

Popularity: 18% [?]

Can I get an “Amen”?

On Sunday, economist and professor Nouriel Roubini told Barron’s that:

“The regulators should investigate themselves for bailing out Fannie Mae and Freddie Mac, the creditors of Bear Stearns and the financial system with new lending facilities. They have swapped US Treasury bonds for toxic securities. It is privatising the gains and profits, and socializing the losses as usual. This is socialism for Wall Street and the rich.”

To a certain extent, I really have to agree with his assessment.

We have seen how some $200 billion was used to bail out Bear-Stearns and some $300 billion was used to bail out Fannie Mae and Freddie Mac.  So, in a span of about 6 months, tax payers have been put on the hook for another half-trillion dollars because of the greed and incompetence of the leadership of these institutions.

So, they were allowed to rake in the dough by providing subprime loans but, when those risky loans began seeing high default rates, these same institutions, with their CEOs still raking in millions, had us taxpayers foot the bill for their foolishness.

But, this is not the best part.  You see, this is just the tip of the iceberg.  Many financial institutions, happy play roulette in the mortgage market, did not keep reserves on hand to cover their consumer credit losses. So, what we are looking at is the collapse of even more banks.  For smaller banks, this could devastate the towns they serve as home and commercial lending go away.

What we see is what happens when nobody’s minding the store.  I’m a capitalist to my core but I don’t think rules are a bad thing.  Today, we are experiencing a convergence of unfettered greed and minimal oversight.  Good luck to whoever wins the presidency in the fall.

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I can remember, from many years back, the Congressional Black Caucus railing against subprime lending.  Back then, they called it by a more appropriate term, “predatory lending”.

What they were seeing was evidence, both anecdotal and empirical, that minority homebuyers, particularly Black and Latino homebuyers, were being steered toward these predatory loans, even while White borrowers in similar financial situations were being steered toward conventional loans.

A new report issued by the National Community Reinvestment Coalition (NCRC) sheds light on just how prevalent the racial disparities in these home loans really really are.

Below is a an excerpt of an article discussing this report:

According to the report, minorities are paying more for mortgages, even as their income levels increase. Loan price disparities, as compared to white counterparts, were more common for middle to upper-income (MUI) African-American and Hispanic borrowers than pricing disparities were for low- and moderate-income minority borrowers.

Lending disparities for African-Americans and Hispanics also increased significantly as income levels increased. During 2006, middle- and upper-income (MUI) African-Americans were twice or more as likely to receive high-cost loans as MUI whites in 155 of the metro areas analyzed (71.4 percent). Furthermore, MUI Hispanics were twice or more as likely to receive high-cost loans as MUI whites in 45 of the metro areas analyzed (22.5 percent).

In comparison, while low- and moderate-income (LMI) minorities are more likely to receive high-cost loans than LMI whites, the disparity was less significant than disparities among MUI borrowers. LMI African-Americans were twice or more as likely to receive high-cost loans as LMI whites in 87 metro areas (47.3 percent). Furthermore, LMI Hispanics were twice or more as likely to receive high-cost loans as LMI whites in 8 metro areas (4.9 percent).

Significant levels of high-cost lending unnecessarily impede wealth building in minority communities. High-cost loans have significantly contributed to the current foreclosure crisis, wiping out hundreds of millions of dollars in mortgage equity. The overwhelming and unexplained prevalence of high-cost lending in minority communities suggests that some level of discriminatory behavior continues in the mortgage finance market, as has been shown by other studies, including those utilizing creditworthiness data conducted by NCRC, the Center for Responsible Lending and the Federal Reserve.

The last paragraph is particularly telling.  It states that creditworthiness is not necessarily the determining factore in whether or not a minority borrower would get a more expensive/riskier loan.

Granted, the onus is on us to become more financially-literate but, by no means, does this excuse away discriminatory practices on the part of lenders.

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Obviously, gas prices are on the minds of most Americans these days.  I have a 2007 Camry that’s costing me about $50 to fill, as long as I don’t go below a quarter-tank..  In 2003, I could have filled my Ford Explorer SUV for less than $25, even if it was bone-dry.

Needless to say, most of us are feeling it.

As a result, in the US, we are actually decreasing our gasoline consumption, mostly from the decrease in the use of SUVs. But prices are increasing.  Why?

Over the past few weeks, you might have heard talk about speculators and how they might be driving up the cost of oil.

In essence, we have people, or more accurately, investors, banks and hedge funds, investing in oil commodities based on how high the cost of oil might go.  Now, add to that the unrest in the Middle East (thank you, George Bush) and it’s a windfall for these speculators.

However, to be fair, even if we include the latter as a factor, this does not justify why speculation is driving up the prices to this high point.

Some analysts are saying that this is much like the internet boom of the late 90’s — a lot of investment frenzy about how high this thing could go but, very little real-world data to justify this increase.  In fact, these analysts say that, with real regulation in these markets, we could see the price of a gallon of gas drop as much as $2 per gallon in 30 days.

Not only is our current state bad for consumers, it may also be bad for investors.  There were more than a few who invested in anything internet-related only to see a lot of these companies go belly-up.  More recently, we’ve seen how a lack of regulation in the housing market has led to a huge crash there, affecting a lot of mutual funds and pension funds that were heavily invested in real estate.  There is a belief that a similar crash is in store for the oil markets.

You see, supply is steady and demand is down so, there is nothing holding these prices.  Therefore, you have people rushing to buy what many see as overpriced stock, in hopes of making a killing.  There will be those who got in too late or stayed too long.  If it’s an individual or many individuals, it wouldn’t impact our economy too greatly but, what if it’s a bank?  We saw what happened with entities like Bank of America and Bear-Stearns in the subprime mortgage meltdown.  A similar fate in the oil markets may not be far behind.

So, even though we feel it at the pump today, we might be in for even more pain due to the oil bubble bursting.

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An Indiana staffing firm has just agreed to a substantial settlement to settle discrimination claims.

The Renhill staffing company will pay $585,000 in an age, race and retaliation discrimination suit. According to the suit, brought forth by the EEOC, “Renhill’s Fort Wayne office and a former office in Decatur violated federal law by failing to refer African-American applicants and applicants ages 40 and older for work assignments.” Furthermore, the EEOC claimed that employees of the firm were retaliated against when they complained about these practices.

In addition to the financial settlement, Renhill will be under a consent decree for the next three years, so that monitors can ensure that the company’s discriminatory practices are not continuing.

Popularity: 50% [?]

I remember complaining because I had student loans. But, I kept telling myself that it went towards a good cause. However, had I not gotten loans, I might not have been able to finish college.

Today, I read something that showed me how close to home this credit crunch is going to hit Americans.

It appears that some banks are now no longer offering student loans.

In the past fortnight, some banks, including HSBC, have pulled out of the $85 billion (£42 billion) a year US student loans market, fuelling anxiety that the turmoil that hit debt markets on Wall Street last summer is spilling over into the wider economy and making credit more difficult to secure for ordinary American households.

In the US, many undergraduates take out a federal guaranteed loan and top up their financial needs with a private loan from lenders such as Bank of America, JPMorgan Chase and Citi-group. In the academic year 2005-06, $17 billion in private student loans was used to finance higher education.

Banks have become reluctant to offer private student loans because worsening credit conditions have meant that they cannot package up the loans and sell them on.

Although the brightest students who win places at America’s rich Ivy League universities will be affected less because of generous bursaries - which do not have to be repaid – less able students applying to other institutions are expected to face difficulty in securing private loans to fund their study. At one end of the field is Harvard University, with $34 billion of endowments, and at the other are many community colleges and low-tier universities with limited resources.

So, unless you kid’s in an Ivy League school, chance are that securing a loan is going to be a problem. Mark my words: this will be the next cause for a major credit crisis. When scarcity becomes an issue, you’ll see the vultures swoop in, offering student loans at bad rates. When things subside in the housing market, these bad loans will be sold to them and default rates will skyrocket.

Why do I think this? It is because the current presidential administration’s answer is to bail out big business and leave the little guys to fend for themselves, which leaves them vulnerable to unscrupulous practices. So, I will not be surprised when the issue arises again, in a different form.

Popularity: 28% [?]

Well, sort of.

Chester Davenport is believed to be one of the wealthiest black entrepreneurs in America. Via his Georgetown Partners firm, he has made quite a name for himself.

Now, he is trying to influence one of the largest business mergers of the upcoming year. As you may be aware, the two satellite radio companies, XM and Sirius are talking about joining forces. This could mean that there would be more than 300 nationwide radio channels under one company’s control.

Davenport believes that there should be opportunities for minority broadcasters to lease channels on the new XM/Sirius network. What Davenport is speaking of is a share of the pie that could mean between 50-100 satellite channels. Right now, the odds are not stacked in his favor. The current FCC chair, Kevin Martin, has shown that he is willing to side with the big corporations over the rights of minority ownership.

So, let’s see what happens. I will say that I hope that we will not see minority radio owners shut out of the new frontier of satellite radio.

Popularity: 25% [?]

Oh, well. It was fun while it lasted.

As you might be aware, I had been contemplating a change since Radio One fired Matsimela Mapfumo from its “The Power” channel on XM radio and replaced his show with a sports show. When I heard that he got a show with Sirius, I gave it even more thought but, there were still a few shows on the Power that were keeping me there.

Well, it looks like I am being nudged, again. I read, today, that XM Radio is ending its relationship with Radio One and will be bringing programming for the Power in-house. From what I can surmise, XM will continue carrying the shows of Joe Madison, Warren Ballentine and Al Sharpton but, effective Jan 8, all other on-air talent will be dumped.

According to Radio One, the advertising dollars just weren’t coming in. Truthfully, the quality of the programming on the Power had gone down significantly in my eyes and I really only listened to three shows: the Joe Madison Show in the morning; Digital Spin, at night; and On With Leon on the weekends.

The only reason I chose XM over Sirius was the availability of a black talk channel. However, when Radio One began “dumbing down” their programming (this was how I saw it), I had to question whether or not I would stick with XM. So, we’ll see what the next few weeks bring. If it’s not good, I’m off to Sirius.

Popularity: 23% [?]

As I think about the housing crisis, I can only think of the words of one of my favorite talk show host, Joe Madison, saying that black people are “undervalued, underestimated and marginalized.” You see, for many years, members of the Congressional Black Caucus have been railing against predatory lending. Of course, their warnings went unheeded. Now, we stand on the edge of financial catastrophe in this country, largely fueled by a lot of bad home loans — with a disproportionate amount of them made to people of color.

However, the question that’s not really been pursued in the mainstream press is “where minorities steered into bad loans when they could have otherwise been offered more conventional loans?” An article I read causes me to think that this was very likely the case.

In September, the Federal Reserve released a study that found 52.8 percent of African-Americans got a high-cost home loan when they refinanced in 2006, compared to 37.7 percent of Latinos and just 25.7 percent of whites in the same year.

A similar study by the Association of Community Organizations for Reform Now, known by its acronym ACORN, in September found the same pattern even when income was equal.

According to ACORN, upper-income blacks were 3.3 times, and Latinos 3 times, more likely than upper-income whites to have a high-cost loan when purchasing a home in 2006.

“I keep hoping one day I’ll do a study where race doesn’t play a part,” said Liz Wolff, author of the ACORN study.

“But clearly, there is a racial bias,” she added.

So, the foreclosures climb and more and more Americans are losing their homes. But, we have to ask, how many minority families are going to lose their homes because they were steered into loans by people who felt that it was okay to, basically, rip off people of color.

Popularity: 29% [?]