Consumer Confidence Advice From Finance Expert Boyce Watkins

Dr. Boyce Watkins
www.Boycewatkins.com

If you wish to see a video explaining consumer confidence, which is one of the driving issues behind the recent moves in the stock market, please click here.

This has been an interesting week, with auto execs showing up on private jets to request a bailout from the government and the Dow moving to below 8,000 points for the first time in 5 years. I still hold to the fact that this is a great time to get into the stock market if one has never done so before, especially if you are under the age of 50. By the way - please visit our sponsor, GreatBlackSpeakers.com if you are interested in hiring a top notch African American speaker or seeking to become one.

Take care!
Boyce Watkins
http://www.blogger.com/www.boycewatkins.com
Click here to join our money advice list.

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If you listen carefully to the words of Treasury Secretary Henry “Hank” Paulson and Ben “Big Ben” Bernanke (chairman of the Federal Reserve) you might notice a trend in their language. The word “confidence” is used a lot when they speak. Many of their monetary proposals are not necessarily valuable for their financial power, but also for their psychological power.

Some of you may wonder what confidence has to do with anything. After all, if you’re broke, confidence doesn’t exactly put money in your pocket. If you’re 100 pounds overweight, confidence won’t help you win the Olympic 100 meter dash. When you are flying on a crashing plane, confidence doesn’t keep the plane from slamming into the ground. But confidence is important to an economy, and one of the most significant drivers of economic growth. In fact, over confidence has driven US economic growth for the past 10 years. Here are some reasons that confidence matters in the minds of Hank and Big Ben:

1) Confident consumers spend money

If you think you might lose your job next year, are you going to max out your credit cards? I certainly hope not. If you are worried about being able to make ends meet, are you going to buy that big screen TV? Not unless you want your wife to leave you. So, even if it doesn’t hold any truth, the mere forecast of a weak economy is enough to make many Americans hold off on consumer spending, one of the great driving forces of the American financial system.

2) Confident companies invest money and hire workers

Investments involve risk. Your hunch may work out, and it may not. If you don’t believe the economy is getting better, you are not going to consider taking that risk. No one plans to go to the beach if the weather man says that it’s going to rain. When economic rain is in the forecast, companies pull out their umbrellas and hold off on new projects. This reduces the number of jobs in the economy, because nearly every job created in America is the result of someone making an investment.

3) Confident Americans do not take their money out of banks

In case you didn’t know, your bank does not have your money. Your money is part of a large base of financial capital that is loaned out to individuals and consumers seeking to get a good return on their investment. So, without investing, your bank would have no interest in paying you any interest at all. So if, say, 30% of all customers of the same bank decide to get their money out at the same time, the bank would have serious financial problems. It is a lack of confidence that could cause customers to “run” on their bank and take out their money.

4) Confident investors keep their money in the stock market

The stock market is a place where fortunes are made and lost. Some part of that fortune is psychological, given that no asset can have a value which exceeds that which someone is willing to pay for it. When investors lose confidence, they take their money out of the stock market, and reductions in demand for stocks lead to massive paper losses in the market. Additionally, most Americans are “momentum traders”, meaning that when the market goes up, they tend to buy more, and when it goes down, they tend to sell. History shows that it is actually the opposite approach that tends to work best.

5) Confident banks make loans

Banks have to keep a certain portion of their funds on hand at all times to meet federal requirements. If they are fearful that their customers might come and demand their cash, they hold onto their capital to ensure that it is available. If they are afraid that their borrowing customers will not be able to repay loans due to a weak economy, they also hold back on issuing new loans. The truth is that when economic forecasts are grim, conservative bankers become even more fearful than the rest of us.

The bottom line of this article is that confidence matters. So, the next time you hear Ben Bernanke give a speech, you can be confident that he is going to use language that makes you feel more secure. Whether you choose to believe those words is up to you.

Dr. Boyce Watkins is a Finance Professor at Syracuse University. He does regular commentary in national media, including CNN, BET, ESPN and CBS. For more information, please visit http://www.blogger.com/www.boycewatkins.com. To join our money list, please click here.

President Obama To Help Africa, Hopefully?

Your Black World: Chef Jeff: From Cooking Crack To Cooking Dreams

CLEVELAND -- Food Network star Chef Jeff Henderson inspired hundreds of local high school students to follow his lead and achieve their dreams.

The one time cocaine dealer turned inspirational chef told his incredible life story to those who attended the Inspire Luncheon, sponsored by Cleveland's West Side Ecumenical Ministry (WSEM).

Chef Jeff graciously spent a good amount of time personally meeting the youngsters, and told them education and a thirst for knowledge are the most powerful keys to achieving their dreams.

He pointed to some of the Cleveland-area people who were helped to their current success by WSEM programs and outreaches, and told the high school students the future they dream of is possible.

Henderson is the author of the best-selling book Cooked, which follows his journey "from the streets to the stove," as Chef Jeff puts it. From a federal prison term, he eventually became one of Las Vegas' most famous chefs, at the Belaggio and Caesar's Palace.

He now hosts a Food Network show, The Chef Jeff Project, in which he mentors six young people who have had troubled lives.

[The Chef Jeff Project]:

Henderson's inspirational appearance in Cleveland was co-hosted by Dr. Eugene Sanders, CEO of the Cleveland Metropolitan School District, and Loretta Pagnini, noted Northeast Ohio chef and founder of the Loretta Paganini School of Cooking, and the International Culinary Arts & Sciences Institute in Chesterland.

© 2008 WKYC-TV

From WKYC

Check Out Milly The Dancehall Queen - A Former Student

Black Finance Professor On Establishing Consumer Confidence

Dr. Boyce Thoughts On If The We Really Trust The Government

The Stock Market Explained - Dr Boyce Watkins

What I Would Trade for a Black President

by Dr. Boyce Watkins

Barack Obama’s voice booms high into the clouds as our nation’s president. But it is also a voice that is sometimes muted by policy, distorted by conflicting agendas and distracted by the complexities of the world in which we live. I find myself mildly disturbed by the excessive celebration within our community, as if winning this political popularity contest has somehow finally validated us as a people. It is scary when the measure of a Black person's success is captured by the degree of favor he has obtained with his historical oppressors. I will never believe that winning the White House is the greatest achievement in Black History, nor was it the greatest sacrifice. The greatest achievements were made by those who worked for us to be truly empowered and the sacrifice was made by those who died to clear President Obama’s path. Achieving prominence on the plantation is not nearly as meaningful as achieving independence.

Before we conclude that we live in a post-racial America, we must remember that many of the men and women who voted for Barack Obama would not be happy to see your Black sons dating their daughters. While we see that the White House has a Black face, we must remember that the majority of our nation’s most esteemed universities still only bring in Black people to dribble basketballs (if you went to college, count the number of Black Professors you had during your 4 years who were not in an African American studies Department). Most of the media outlets you watch on TV are controlled by people who are not Black, yet they consistently impact the self-perception of Black children by bombarding them with negative Black imagery (i.e. DL Hughley's new show on CNN). Most of our nation's wealth is controlled by the descendants of slave masters, with poverty being inherited by descendants of slaves. There is a lot of work to do, we can’t forget that.

So, while having a Black President is a wonderful thing, it’s not the most wonderful thing I can think of. I would GLADLY trade a Black President for any of the following:

Another Malcolm X – Malcolm is likely the most under-appreciated American in our nation’s history, since his legacy is not as amenable to the excessive commercialization and mainstream comfort of Dr. Martin Luther King, Jr. Dr. King achieved political gains and Barack gave us the White House, both of which can be taken away in an instant. Malcolm gave us something far more permanent – our self-respect and desire for economic independence. Since America will never give Malcolm much respect, it is up to us to remember that he is every bit as significant as Barack Obama and Martin Luther King, Jr. We should all memorize Malcolm's birthday right now.

10 Black Warren Buffets – my good friend and wildly successful money manager, Bill Thomason, brought up an undeniable point: if we as African Americans do not get ourselves together financially, we will never have true power. America is a capitalist democracy, and we cannot forget that money makes this world go round. Rather than teaching our children to get jobs, we need to teach them how to CREATE jobs. Rather than trying to wiggle our way up the corporate ladder, we should be creating the buildings that the ladders lean against. Wealth is more powerful than racism any day of the week.

An era of enlightened and educated professional and college athletes – The Black male athlete possesses many keys to the economic and social liberation of Black America. Many HBCUs can’t pay the light bill, but Black Athletes earn at least $2 Billion dollars per year for universities that don’t hire Black coaches or Black Professors (March Madness, for which athletes are not paid, earns more ad revenue than the Super Bowl and the World Series COMBINED). The powers that be know the potential influence and reach of an educated and empowered Black athlete, which is why they work overtime to keep them uneducated: when many athletes come to college, coaches pick their classes for them and some can’t even read at graduation. They keep them focused on the bling so they will take their eyes off the prize. These young men are taught like sheep to embrace intellectual mediocrity so their handlers can earn fortunes at their expense. They are granted the greatest power in our society as long as they prove that they are unwilling to use it. If these men were to ever wake up and fight for something bigger than themselves (as Muhammad Ali and Jim Brown once did), it would be absolutely earth shattering.

A Quality Public Education System – Rather than declaring a War on Terror, we should declare War on inferior inner city education. Instead of bailing out the rich guys on Wall Street, we should be bailing out our children who are stuck in the preschool to prison pipeline. Hundreds of thousands of potential Barack Obamas are being tossed in an educational landfill every year, as Black boys are 5 times more likely to be placed in Special Education as White kids (I was one of those boys). This is a damn shame.

Complete Overhaul of the Prison System – If you ever want to see slavery in the 21st century, one only need look as far as our nation’s prisons. There is little effort to rehabilitate, and the impact on the physical health and socio-economic stability of the Black family has been devastating. President Obama and others should confront the prison industrial complex immediately and stop the human rights abuses taking place in our nation's prisons.

Now that people are saying that President Obama’s success implies that there is no more racism, our job becomes much more difficult. President Obama and others must be consistently asked to pull their weight so that we can get a return on our investment in the Presidential popularity contest. But while we expect President Obama to lead us, we must also remember that it is important to lead him as well. The fight is just beginning.

Dr. Boyce Watkins is a Finance Professor at Syracuse University and author of “What if George Bush were a Black Man?” For more information, please visit www.BoyceWatkins.com. To join the Dr. Boyce Money list, please click here.

Your Black World: Ex-NBA Star Kevin Johnson Breaks Many Barriers

We enter a new era of Sacramento politics with a new type of leader: Kevin Johnson, ex-NBA star, mayor-elect by landslide, a jumble of virtues and contradictions who will never be boring.

Johnson could be exactly what Sacramento needs right now. He could help shake Sacramento's undervalued sense of itself. Or he could be a disaster. Anything seems possible and nothing seems impossible with Johnson.

At Monday's unveiling of his transition team, Johnson was surrounded by movers and shakers basking in his presence.

"It's an intangible quality that some people have," said Adam Mendelsohn, former deputy chief of staff for Gov. Arnold Schwarzenegger – and now part of Johnson's transition team. "Certain people make others go above and beyond what they would normally do."

Mendelsohn is helping Johnson for free, as are most of the lawyers, community leaders and big wheels jumping on his train.

We're talking Republicans and Democrats and more than a few heavy hitters. Mendelsohn remains close to Schwarzenegger and is partners in a PR firm with Steve Schmidt – who was senior adviser to the presidential campaign of Sen. John McCain.

The woman screening candidates for Johnson's chief of staff is Michelle Rhee, chancellor of schools in Washington, D.C. Google her. She could be Secretary of Education someday. Yet here she is, in Sacramento, helping out our new mayor.

The man helping Johnson reach out to the Latino community? Amador Bustos, whose company virtually owns the Spanish-language radio market in Northern California.

Yeah. Sacramento is ready for new leadership. Sacramento yearns for it. That's part of the reason so many people responded to Johnson so positively.

They want their city to be better.

The question remains: Is he ready?

Johnson has a ton of advisers, but will he listen? He has a strong sense of right and wrong, but does he ever admit when he is wrong?

Everyone in Johnson's vast circle adores him now – but that was the case when he took over Sacramento High School in 2002.

Some people left that process disillusioned. Some still hold strong, negative feelings toward a man they describe as a micro-manager who never lived up to his hype, who wore people out working day and night and who didn't deal well with dissent.

I know people who hate what Sac High became, and I know people who love it. And I know people who love the man, but qualify their words when discussing his future as mayor.

Recently, I met with one of his close friends and asked if he thought Johnson would make a good mayor for Sacramento. Johnson's friend frowned and said, "I hope so."

Me too. Sacramento needs a good mayor.

From The Sacramento Bee

Your Black Scholar: Hope and Wisdom -- Shannon Joyce Prince

Hope and Wisdom

By: Shannon Joyce Prince

Remember back seven years ago to the aftermath of September 11^th, when the world was divided into the good and the axis of evil, those who had democracy and those whose envy of it drove them to murderous fundamentalism? Remember the charge of the extreme right – that anybody who didn't support the ‘War on Terror’ or didn't show the appropriate level of ambivalence towards Islam or Middle Easterners, or paused to quibble over whether or not “enemy countries” had weapons of mass destruction, was unpatriotic and insufficiently American? Remember how the left, the middle, and the moderate right took issue with that kind of Manichean thinking while the war hawks said it didn't matter if those who were leading us to war were honest or which Middle Eastern country we bombed, because we were representing the concepts of freedom and democracy, thus the nitty-gritty about reality and truth weren't important?

I've been stunned to hear that same kind of rhetoric from the left. Either you support President-elect Obama or you're a too cool for school revolutionary snob, a Gloomy Gus, or someone too idealistic, unrealistic, or cynical to be pragmatic or useful. It doesn't matter who Obama is, what he does, says, or stands for - he represents hope and change and that's good enough. The left is currently doing what the right once did: conflating concepts with reality. The right said supporting democracy and freedom and supporting the ‘War on Terror’ were one and the same. The left says supporting hope and change and supporting Barack Obama are one and the same -- and their elision is just as dangerous. Just as by employing the words freedom, equality, and justice the Founding Fathers were able to hide a white, male, propertied oligarchy in the guise and language of democracy, Obama is hiding imperialism, neo-liberalism, and corporatism behind the language of progressivism.

See, there's nothing wrong with hope – as long as the person enjoining you to hope isn't also demanding that you abandon your critical thinking skills. Believe it or not, those of us who criticize Obama are not grumps who enjoy telling children there is no Santa Claus, while merrily kicking puppies. I don't begrudge anyone their elation at this time. When my Creole grandfather, a man who had to leave school in the fifth grade to pick sugarcane, called me nearly in tears that Obama had won the election, I shared his joyful moment with him. I didn't seize that moment to explain that Jason Furhman was heading up Obama's economics team; that as a senator, Obama repeatedly voted to increase funding for the war in Iraq, or tell him about the horrible things Obama has said about black fathers, such as my wonderful grandfather. The problem, however, is that my grandfather supports Obama because he doesn't know those things. Many of the people dancing in the streets right now haven't taken the time to do any research on Obama – so part of their euphoria is based on ignorance. Another significantly large population - much of the black community - supports Obama based on the belief that he is secretly not what he has presented himself to be - that once he has sneaked his way into office he's going to rip apart his button down shirt, revealing a bright Superman "S" and suddenly become Martin Luther King's ideological heir. I've heard another significant faction of people say that it doesn't matter what Obama does or doesn't do, because now little black boys can see a black president and know that they can grow up to be president, too. But that's just it – those little black boys are going to grow up. They're going to analyze and think critically (one hopes) and be affected by Obama's rhetoric and his policies. They're going to need substance, not a symbol. And they deserve better than Obama.

People who say Obama is dangerous, perhaps as dangerous as McCain, aren't crazy. What we realize is that while Obama might, and that's a big might, give in to leftist pressure and pass the kinds of positive legislation he didn't as senator, the benefits of progressive policies he instates risk being undermined by the racist ideology he uses. It's one thing for masses of white people to assume that racism is 90% over. It's another for a black man, Obama, to tell them this is so. Fostering those kinds of illusions is fatal. I've heard it said that Obama is obviously less racist than McCain, and his rural white sycophants, because McCain uses racial slurs and Obama doesn't. That doesn't make Obama less racist – just savvier. It reminds me of how aristocratic slave-owners had a hypocritical disgust for poorer, cruder slave traders, or how you read in many slave-owner narratives that genteel slave-owners proudly called their slaves "servants," instead of slaves. That didn't make the slaves any freer, however. Obama might not call blacks the "n" word, but his descriptions of blacks have depicted them as exactly that. Conversely, Obama may never call Afghans r*gh**ds, but if he starts a war in Afghanistan, Afghan civilians won't be any less dead, and Obama's ability to start a war with Afghanistan might be aided by his genteel language.

You see racists, be they black or white, aren't all as stupid as McCain. As Nancy MacLean noted in her book, Freedom is Not Enough, many racists have gotten hip to equality sounding language. That's why Ward Connerly's anti-affirmative action bill was called the California ‘Civil Rights Initiative.’ That's why one racist, nativist, anti-immigration group calls itself Vietnamese for Fair Immigration (though it's run by a white man). Time after time Obama has treated blacks, Muslims, and Middle Easterners with contempt. No matter how beautiful Obama is when he smiles, poised when he debates, or eloquent when he speaks, he is still racist; and his racism, his willingness to undermine minority concerns, his eagerness to appease whites, his enthusiastic obscuring of both past and present issues of justice and equality are perhaps as dangerous to America as anything McCain could do.

As Derrick Bell, the first African American tenured Harvard law professor and one of America's most brilliant legal minds has pointed out, whites tend to allow non-whites to achieve symbolic racial landmarks only when it meets white interests more than black interests; and often by using black figureheads. As blacks place their faith in slow, but sure, racial progress, whites convert old oppressions into more covert forms. Only when blacks are aware of this strategy can they fight for meaningful victories. Interestingly enough, those who criticize Bell tend to do so not because his work is inaccurate, but because it's "depressing." I'm sorry, but my concern isn't being the life of the party -- it's seeking liberation for all people. Those who castigate Americans for not being appropriately jubilant at Obama's election are insisting that blacks content themselves, in perpetuity, with symbolism instead of real change. All those who don't know what Obama stands for, or think he will exhibit qualities contrary to the way he has voted in the Senate and spoken in his speeches, or expect him to be loyal to issues he's flip flopped on, are entitled to do so.

However, it is irresponsible for those of us who believe that hope is only positive when wisely invested, to not use all the research we can gather and all the thought power we can employ, to fight for all people.

Shannon J. Prince is a creative writing major and junior at Dartmouth College. In addition to writing, she is an activist for indigenous and African issues, a ceramics maker, and a travel addict. She has been published in Frodo's Notebook, Falcon Wings, KUHF magazine, Imprint, Rice University's Writers in the Schools Magazine, Illogical Muse, Damn Good Writing, Lost Beat Poetry, Haggard and Halloo, Houston Literary Review, Words on Paper, Bewildering Stories, The Smoking Poet, Muscadine Lines, Ragand, Prick of the Spindle, International Zeitschrift, Conceit Magazine, Snow Monkey, Paradigm, Words Myth, and The Green Muse. She also won Dartmouth's Thomas Ralston Prize for creative writing. Click to e-mail Ms. Prince: Shannon J. Prince