Monthly Archives: April 2014

HBCU Money™ Dozen 4/14 – 4/18


Did you miss HBCU Money™ Dozen via Twitter? No worry. We are now putting them on the site for you to visit at your leisure. We have made some changes here at HBCU Money™ Dozen. We are now solely focused on research and central bank articles from the previous week.


Where are California’s “Next Generation” of Ocean Leaders coming from? l CA Sea Grant

Clean Energy Gets Boost From California Public-Private Initiative l Clean Technica

Solar Panel Windows — Shiny Quantum Dots Boost Efficiency l Clean Technica

Meet Siri on steroids l Network World

LADEE killers: NASA crashes vending machine-sized probe into moon (on purpose) l New Scientist

Meet the Most Profitable PC Company You’ve Never Heard Of l CIOonline

Federal Reserve, Central Banks, & Financial Departments

Paying down credit card debt: a breakdown by income and age l St. Louis Fed

April is Financial Lit Month. Money Skills video series to teach important financial concepts l EconLowDown

Detroit’s $1,000 houses may be a lousy deal l Housing Wire

Submissions for 2015 Community Development Research Conf.; abstracts due Sept 8 l Atlanta Fed

Effect of liquidity requirements on economic growth, creation of systemic risk, & welfare l NY Fed

Ole Miss employs innovative strategy to foster entrepreneurship and job creation l St. Louis Fed

Thank you as always for joining us on Saturday for HBCU Money™ Dozen. The 12 most important research and finance articles of the week.

Government Should Finance Growth Through Savings Not Borrowing

By William A. Foster, IV

It took thrift and savings, together with tremendous character and vision, to make our nation what it is today. And it will take thrift and savings, together with constant ingenuity and stamina, to conserve our remaining resources to enable us to continue to be a great nation. — John W. Snyder

Imagine for a moment you were superman/woman. Would you ever walk? Or drive? Or better yet, catch a flight to get anywhere? Of course you would not because you do not have to. You are faster than a speeding bullet  and have the ability to do something that nobody else does – for better or worse. This is the mentality of many governments on the face of the Earth – and maybe on other planets. Too often just because we can, we do.

I am residing in Houston, Texas at the moment. A place that as a whole has been largely insulated from the great recession due to its strict borrowing regulations on real estate and conservative rise in real estate prices which limit the amount of speculating that drowned the rest of the country. As a result of a stronger economy than the rest of the country, there were a large number of bond votes that Houstonians voted for or against in the past few years. Recently, a survey was done on how Houstonians felt about their financial future and it came back so positive that many bonds passed with relative ease. Yet, one has to ponder even for a city so highly insulated from the real estate bubble, but potentially vulnerable to the energy industry is there an unforeseen danger to constant leveraging of tomorrow today. Just ask Detroit.

A government bond is essentially a debt instrument that governments can use to bridge the gap between their tax revenues and their expenditures. These expenditures can include everything from paying employees, funding retirements, improving infrastructure, and a host of other things. On the states level many state constitutions require a balanced budget meaning states can not spend more than they take in a fiscal cycle. This is sometimes misleading as with most things in life there are loopholes. However, at the federal level though there is no mandate to have a balanced budget. The federal government can run deficits meaning it can spend more than it takes in by simply borrowing the margin it needs. I sure wish I had this option in my household, do not you? At the moment that gap (deficit) is annually running at about $1 trillion dollars which has helped create a national debt of approximately $16 trillion. Usually when a household, company, or organization runs a deficit for a prolonged period of time they end up in bankruptcy. The federal government though has the power of the purse meaning they can either print more money or increase taxes, but even this has its limits. That is because it can only work so long as there is an agreeable buyer to buy the debt as an investment.

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America’s culture of borrow, borrow, and borrow some more is a recent phenom in America seemingly ushered in with the rise of the Baby Boomer generation to power as you can see in the graph above over the past 60 years or so. Americans use to be more prudent savers prior to World War II. In stark contrast, Asia has and continues to be an increasingly acute saving society. The Asian Development Bank studied 14 Asian countries and the Chinese territory of Hong Kong and found their average savings rate to be 29.3 percent (see below) across the continent in its most recent data. Meanwhile, the United States current savings rate according to the St. Louis Fed shows America at 4.3 percent. In other words, it would take a 582 percent increase in America’s current savings rate to match Asia.  We know as the people’s behavior goes so goes their government’s. After all, governments are of the people and so is their fiscal behavior.

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For some reason it has never dawned on governments to plan ahead. It has never dawned on them that debt to finance future purchases is not actually necessary. America’s current infrastructure is in disarray to put it kindly, but when these structures were built did no one think that one day they would decay? The moment we buy a car are we assuming it will run forever? Or it will never need maintenance? Instead, we have taken the attitude that these deferred maintenance or replacement cost can just be borrowed against more and more. Each time requiring more debt than previously borrowed and deferring the liability to another generation. Historically low interest rates are currently suppressing the net interest we are paying on our $17 trillion in debt. As of 2013, we are paying $223 billion in interest or 6 percent of federal outlays. Internal HBCU Money calculations estimate the percentage would be 59 percent of federal outlays or $10 trillion if the Fed funds rate adjusted to market demand.

The American Society of Civil Engineers gave the U.S. a D+ on its infrastructure and estimates it would cost $1.6 trillion to “catch up” by 2020. My elementary math might be a bit rusty, but that equates to currently seven years of interest. I could go on and on about the many number of things America could be doing with that $223 billion like improving our education system, providing more assistance for veterans, or simply putting that money away for a rainy day.


There is joy in taking a walk, taking a country drive, and even in letting someone else do the flying and looking out of the window at the Earth’s beauty. Financial stress even at the most macro level of government seeps into American households and stresses the very fabric of a country. We see this with the rise of the TEA party and Occupy Wall Street movements. A change in culture is needed and it is needed within our homes. We must be fiscally responsible and teach our children to do the same so that the future generations of leadership in this country can start to remove the glutton of entitlement corrupting the veins of America. A family, community, country must be strong and part of that strength is its fiscal house or as my mother often told me – just because we can do something does not mean we should, superman. There is after all strength in restraint.

HBCU Money™ Business Book Feature – Things a Little Bird Told Me: Confessions of the Creative Mind


Biz Stone, the co-founder of Twitter, discusses the power of creativity and how to harness it, through stories from his remarkable life and career.


From GQ‘s “Nerd of the Year” to one of Time‘s most influential people in the world, Biz Stone represents different things to different people. But he is known to all as the creative, effervescent, funny, charmingly positive and remarkably savvy co-founder of Twitter-the social media platform that singlehandedly changed the way the world works. Now, Biz tells fascinating, pivotal, and personal stories from his early life and his careers at Google and Twitter, sharing his knowledge about the nature and importance of ingenuity today. In Biz’s world:

-Opportunity can be manufactured
-Great work comes from abandoning a linear way of thinking
-Creativity never runs out
-Asking questions is free
-Empathy is core to personal and global success

In this book, Biz also addresses failure, the value of vulnerability, ambition, and corporate culture. Whether seeking behind-the-scenes stories, advice, or wisdom and principles from one of the most successful businessmen of the new century, THINGS A LITTLE BIRD TOLD ME will satisfy every reader.

HBCU Money™ Dozen 4/7 – 4/11

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Did you miss HBCU Money™ Dozen via Twitter? No worry. We are now putting them on the site for you to visit at your leisure. We have made some changes here at HBCU Money™ Dozen. We are now solely focused on research and central bank articles from the previous week.


Easy-to-install toilets to promote sanitation in remote locations. l EPA Research

The Mainframe Isn’t Dead, and Neither Is the PC l CIOonline

EPA works with tech & innovation clusters to find new water technology. l EPA Research

Watch a vagina grow in the lab from a woman’s cells l New Scientist (video) (story)

Indian Political Parties Recognise Renewable Energy As An Election Issue l Clean Technica

Savanna Farmers Marketing Company, Ghana l Grow Africa – Africa Report

Federal Reserve, Central Banks, & Financial Departments

Learn about household income distribution as jumping-off point for understanding l SF Fed

2 charts show exactly how the mortgage pipeline is drying up l Housing Wire

One currency, two markets: the renminbi’s growing influence in Asia-Pacific l Bank Int’l Settlements

Student loan study: Student loan market in 3rd district has grown considerably l Philly Fed

The Small Business Lending Fund Continues to Increase Access to Capital l Treasury

How do the money supply and inflation relate? “Money and Inflation” video l EconLowDown

Thank you as always for joining us on Saturday for HBCU Money™ Dozen. The 12 most important research and finance articles of the week.

The HBCU Money™ Weekly Market Watch

Our Money Matters /\ April 11, 2014

A weekly snapshot of African American owned public companies and HBCU Money™ tracked African stock exchanges.


African American Publicly Traded Companies

Citizens Bancshares Georgia (CZBS) $8.00 (0.00% UNCH)

M&F Bancorp (MFBP) $4.60 (0.00% UNCH)

Radio One (ROIA) $4.49 (0.00% UNCH)

African Stock Exchanges

Bourse Regionale des Valeurs Mobilieres (BRVM)  240.53 (0.09% DN)

Botswana Stock Exchange (BSE)  8 983.94 (0.13% DN)

Ghana Stock Exchange (GSE)  2 337.00 (8.94% UP)*

Nairobi Stock Exchange (NSE)  144.36 (N/A)

Johannesburg Stock Exchange (JSE) 48 032.41 (1.03% DN)

International Stock Exchanges

New York Stock Exchange (NYSE) 10 328.86 (0.37% DN)

London Stock Exchange (LSE)  3 525.89 (1.24% DN)

Tokyo Stock Exchange (TOPIX)  1 134.09 (1.39% DN)


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