Month: October 2013
(The Root) — Like many Howard University alumni, Im pretty committed to — and really sentimental about — my alma maters annual homecoming weekend. I havent missed one since I graduated.
Just as I was giddily putting the last touches on this years plans, I received the following email, sent to The Root by a fellow alum who urged our staff to let readers know about the abomination about to take place surrounding the Bisons Saturday football game:
Every yearHowardputs on a massive production known asHomecoming … it is hard to ignore that Howard, once hailed as a premier educational institution is slowly sinking … Yet without fail,Howardputs on an event of Gatsby proportions despite the fact that they are entrenched in millions of dollars of debt.
It went on.
This brings up a bigger issue of African Americans sacrificing their priorities to portray a facade of luxury and glamour. We will throw caution to the wind (caution being finances set aside for mortgage, car notes, and other important monetary commitments), to portray the image that we have it all.
I originally dismissed the message. But on second thought, I realized that this line of criticism is important to address.
Thats because it represents a narrative Ive heard plenty of times before (You all love your schools so much and you go to homecoming, but I dont see you give back, and thats why theyre falling apart).
Its an all-too-common line of thinking in a conversation about the issues facing HBCUs in 2013. That conversation can get really intellectually lazy, really fast. (Skim news article or, better yet, read a tweet. Add fuzzy facts. Combine with a pinch of panic and a healthy dose of the worst stereotypes about black people. Voilà! Youve created some unproductive shame about celebrations that do no harm and that could actually be harnessed to do even more good.)
So Ive decided to spend the Friday of this years homecoming clearing up a few things:
Howards real challenges are not the result of character flaws of alumni or administrators. If you follow Howard in the news, youll remember the scathing letter from a trustee who threatened that Howard wouldnt be around in three years if the university didnt make some crucial decisions about its finances. The resignation of President Sidney A. Ribeau drew additional scrutiny. Moody dropped the schools ranking in a report that speculated about the difficulties associated with leadership transitions.
These are the headline-grabbing stories, the ones that conjure images of scandal and bad backroom choices. But the facts behind what are actually the core issues facing the school have little to do with those things.
The fact that HBCUs are based on a social serving mission for a population that just does not have major pockets of revenue makes a tough economy tougher on them. The sequesters effect on their federal appropriation didnt help. And that was on top of the recent tightening of credit standards for obtaining Parent Plus loans, on which many HBCU students and their families rely. These are serious problems, but theyre tied mostly to the very nature of the institutions, the way theyve been funded since their creation and the needs of the student bodies they serve.
Theres plenty of good news about Howard. A university representative assured me that demand for Howard is at a historic high, that the class of 2017 has the highest SAT average in university history, that enrollment has rebounded and that an extensive renovation of facilities is under way. Theres a new interim president. Howardreports a positive operating balance for each of the past four years, including $12 million in the most recent fiscal year. The universitys $510 million endowment is 159th out of 833 colleges and universities ranked in the country. The federal Department of Education recently reviewed the financial strength of the nations private universities and awardedthe school a score of 2.8 out of a possible 3.
Slowly sinking? Not exactly.
Homecoming does not represent a financial drain on Howard. According to Howard, homecoming is self-sustaining, with costs mostly covered through ticket revenues, corporate sponsorship and underwriting. So the idea that the school is wasting money on an event is simply wrong.
In fact, its a great opportunity to raise money. This year Howards homecoming includes at least one event that requires a donation of at least $25 to Howards Bridging the Gap campaign, which allows the school to provide scholarships for current students who are in good academic standing and need additional support.
And that could just be the start. When it comes to raising money, Howard homecomings represent potential thats still largely untapped when it comes to alumni giving. Rates of giving for black HBCU students generally fall just slightly behind those of black students at other schools (7-9 percent and 9-10 percent, respectively), says Marybeth Gasman, co-author of A Guide to Fundraising at Historically Black Colleges and Universities. Its a gap that she says is explained in part by the fact that students from many of the HBCUs that serve mostly lower-income populations simply dont have as much money.
But, Gasman told me, the school could do a much better job of asking for donations. And homecoming celebrations, where alumni come in droves, arent distractions from that effort. Rather, with the right strategy, they could become the perfect place to get serious about drumming up support and close the gap.
Finally, when it comes to HBCUs or any other topic, making everything about black pathology is a really bad idea. A lot of fretting about homecoming as a waste or distraction falls into an all-too-common trap in which many people — African Americans included — default to a cultural-pathology-based explanation, assuming the worst priorities on the part of black people, in criticism that isnt applied to other groups.
So could Howard alums forgo a weekend trip to homecoming and donate the saved money to the school instead? Sure. But so could every American pass on travel to see family and friends, and write checks to their favorite causes instead — and we typically dont admonish one another for failing to do so.
Lamenting the bigger issue of African Americans sacrificing their priorities in this case misses this weekends actual big issue: that HBCUs like Howard urgently need to diversify their revenue streams in a changing economic and educational climate, and we have an opportunity to make homecoming celebrations a more significant part of that effort.
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The hedge fund SAC Capital Advisors is moving closer to a plea deal with prosecutors that would force it to wind down its business of managing money for outside investors, punctuating its decline from the envy of Wall Street to a firm caught in the government’s cross hairs.
An agreement to stop operating as an investment adviser is one feature of a larger agreement SAC is negotiating as it seeks to resolve insider trading charges, according to people briefed on the case. The plea deal, these people said, would also require SAC to plead guilty to criminal misconduct and pay more than $1 billion in penalties, a record for an insider trading prosecution.
The winding-down of the investment adviser business at the company, owned by the billionaire investor Steven A. Cohen, would be a symbolic move for the hedge fund, which has already returned billions of dollars to investors who fled as its legal problems escalated. It will probably continue to operate in a different form as a so-called family office, allowing Mr. Cohen to manage his personal fortune. Under the proposed terms of the tentative deal with the government, however, he will be prohibited from managing outside money for some period of time.
The people briefed on the matter, who spoke on the condition of anonymity, cautioned that the deal could still fall apart and an agreement was not imminent.
BEIJING (Reuters) – Chinas property sector borrowed more from banks in the third quarter than in the second, a Reuters calculation from central bank data showed, another sign of buoyancy in a red-hot housing market.
Chinese banks lent 600 billion yuan ($98.47 billion) to home buyers and property developers between July and September, higher than the second quarters 589.7 billion yuan and up 44 percent from a year ago.
Solid demand for property loans is in line with strong recovery momentum gripping Chinas housing market since the start of 2013. Data this week showed home prices rose by their most in nearly three years in September.
Exuberant home prices well beyond the reach of ordinary people suggest Chinas four-year campaign to calm its housing market has had limited and uneven success.
For the first nine months, total property loans issued hit 1.9 trillion yuan, up 917.6 billion yuan from a year ago, the central bank said on its website.
Outstanding mortgages by the end of September were up 21 percent from a year ago, at 9.47 trillion yuan, while outstanding loans to developers climbed 15 percent to 3.43 trillion over the same period.
New loans for public housing construction totaled 113.4 billion yuan in the first nine months of the year, to make up 28 percent of all loans to developers.
(Reporting By Xiaoyi Shao and Koh Gui Qing)
Federal jurors deliberated for about an hour and a half before acquitting an Arkansas lawyer on Wednesday of conspiracy to commit bank fraud.
David Fisher of Rogers, Ark., was found not guilty in the alleged conspiracy after testifying in his own defense, report 5 News Online, Arkansas Business and Northwest Arkansas Online. Prosecutors had claimed Fisher lied to First Federal Bank to help a developer obtain property loans in excess of the property value.
Fisher testified he only drew up the documents and didnt know anything about defrauding the bank, according to the story by Northwest Arkansas Online.
Another lawyer charged in the case, K. Vaughn Knight of Fayetteville, is scheduled to be tried in November.
ABAJournal.com: 3rd lawyer is federally indicted, accused of aiding developer in claimed real estate loan fraud
* Regulation needs to be fit for entire cycle – report
* Proposes changes to loan valuation model
* Seeks creation of property loan database
LONDON, Oct 22 (Reuters) – Lenders to Britains property
sector must change the way they value real estate to avoid a
repeat of the meltdown that helped to cause the financial
crisis, a report by banking and property experts said on
The report by the Real Estate Finance Group (REFG),
comprising senior bank and property figures from companies
including Wells Fargo, CBRE Group and Grosvenor
, says that reform is needed to curb overenthusiastic
lending at the top of the cycle and ensure that banks have
sufficient cash reserves to support post-crash recovery.
The REFG was set up to propose a market structure and
regulatory regime to guard against the practices that left many
banks with portfolios of property loans that exceed the value of
the underlying real estate.
After years of excessive lending in the run up to 2008,
banks such as Royal Bank of Scotland and Lloyds
have been hit by tough capital requirements that have forced a
drastic reduction in their lending to the sector.
We need right touch regulation fit for all stages of the
cycle, rather than light touch as the market rises followed by
heavy handed after a crash, said Grosvenor Finance Director
Nick Scarles, who chairs the group.
The REFGs seven proposed reforms include a requirement for
loans to be linked to a propertys long-term loan-to-value ratio
rather than the ratio at the time of the loan. This would
compare the amount of the loan with the average value of the
property through the market cycle, ensuring that capital buffers
are built in automatically.
It also advocated the creation of a database of all UK
commercial property loans, the risk levels of which could be
analysed periodically by regulators and academics.
The report also proposed that key staff in lending teams
should be required to gain accredited qualifications.
The recommendations will be sent out for comment and a final
report will be published in early 2014.
South Arkansas bankruptcies through Tuesday, October 22, 2013:
Keena Vichelle Lowe, 114 S. Oakland, Magnolia; Chapter 7; bankruptcy filed October 18. Assets, $42,988.22. Liabilities, $112,338.
Joseph Lee McKnight, PO Box 410, Norphlet; Chapter 7; bankruptcy filed October 14.
Rickey B. Harper, 1404 N. Mosby, El Dorado; Chapter 13; bankruptcy filed October 16.
Steven Allan Paylor, PO Box 11183, El Dorado; Chapter 13; bankruptcy filed October 18.
Marvin West, 21 Christopher Place Apt. 4, Strong; Chapter 7; bankruptcy filed October 21.
Having received court judgements on non-repaid loans from Suntech Power Holdings, some of the small bondholders are seeking Chapter 7 bankruptcy proceedings against the company.
Chapter 7 bankruptcy is a winding-up procedure rather than a Chapter 11 bankruptcy, whereby companies attempt to restructure operations and continue operating.
Court filings, linked to by the Wall Street Journal show that a few bondholders, including Trondheim Capital are seeking payment of US$580,000 dollars after obtaining court orders confirming their legal rights to payment after Suntech previously defaulted on a US$541 million convertible note earlier this year.
Suntech has three weeks to respond to the claims.
Recently, this request from a reader popped into my in box: “Can you tell me the difference between Business Class and First Class? Please let me know all the differences you can. I am trying to book a flight for a special occasion next year, and I am trying to figure out what is best.”
I put off answering as long as possible since I could write a book on the topic, it’s so complicated. There’s no such thing as “pure” business class or “pure” first class anymore.
Which airlines? Which routes? Which planes? On some airlines, business class is better than first class on other airlines. Some routes (such as New York to LA) have fancier business and first (fully lie-flat beds on some planes) than others. And some airlines (notably, British Airways, Singapore, Etihad, and Emirates) keep on pushing the envelope, making their business and first class cabins a notch above all the rest, so it’s hard to keep up.
So how to tackle this reader’s question?
Luckily, I’ve been flying in business and first a lot this year, or at least taking a peek at some airlines’ new cabins on the ground, so I can speak from experience. Let’s start with fully-lie flat beds.
Many airlines still have “angled flat” beds in their premium cabins, in some or all of their planes. It’s not the same thing as fully lie flat. In an angled seat, you’ll end up sliding down the seat at some point, squished at the bottom, and it’s hard to sleep in the fetal position. Then there’s aisle-access for all seats. On some airlines, you have to climb over your seatmate if you don’t have an aisle seat. To find out who offers what kind of seat, head over to Seatguru.com where you’ll find seat maps for most all airlines and aircraft types. But some airlines fly many versions of the same plane, and not all versions are equal. So you have to enter your exact airline and flight number to find out which version you’ll be on, and realize that airlines can switch planes at the last minute, which can be a disappointment.
What’s the difference between business and first?
On some airlines (eg, Air Canada, Delta, Virgin Atlantic) it’s the same product. They’ve done away with first class on most international routes, and just call the product “BusinessFirst” or in the case of Virgin Atlantic, “Upper Class.” In many cases on these airlines, you’ll get a fully lie flat bed, often with full aisle access for all seats.
Where business and first still co-exist, the main differences are bigger seats, better food and wine, more flight attendants per passenger (and thus more attentive service), better airport lounges, and, perhaps most important of all, more privacy. Many first class seats on international routes sit all by themselves–no seat mates at all. But the price differences between business and first can be enormous, and for some people it’s just not worth the extra spend.
Domestic US first class not so hot
But so far we’ve been discussing mostly international travel. On domestic routes within the US, first or business class can be a bit of a disappointment. The food isn’t anything special, the seats are in a 2-by-2 configuration but don’t always have tons of legroom (especially, I’ve noticed, on US Airways), and you still have to climb over your neighbor if you’re in a window seat. And you don’t automatically get lounge access unless you’re flying on a premium route like New York JFK to LA or San Francisco, as you might on an international flight, although you do get priority boarding, TSA lines, and check in.
So who should she fly?
So who has the very best business and first class products? On international routes, my vote goes to British Airways (especially in their new A380 planes) since all business and first long haul cabins have fully lie flat beds (in fact, BA invented the concept); Singapore (which recently announced a complete overhaul of both products, not that they actually needed a complete overhaul but what the heck); Etihad (which has aisle access and lie flat seats fleet wide and many unusual perks like an onboard chef to cater to your every culinary whim, within reason); Emirates (which, like Singapore, has very private “suites” in first class and, somewhat gimmicky, on board showers); and, on routes served by their new Boeing 777-300ER planes, with their fabulous inflight-entertainment selections and international WiFi, American Airlines (but only on those aircraft, so choose carefully). Eventually, all airlines will probably have lie-flat beds (Lufthansa is working on it, for example), but until they do I’d choose with care.
For domestic service, I love United’s newly-refurbished business class 757-200 cabins on the New York/San Francisco and LA routes (for some reason, the lie-flat seats are insanely comfortable, even if you’re not lying flat), and I’m looking forward to American’s new A321 planes on the same routes. But otherwise, I would hesitate paying cash for business or first domestically. Whenever possible, your best buy is to purchase the cheapest possible upgradeable coach fare and fork over 15,000 frequent flyer miles each way to fly up front.
George Hobica is a syndicated travel journalist and founder of the low-airfare listing site Airfarewatchdog.com.
I was just watching a news program where a reporter asked a woman on the street, Who do you think is to blame for the government shutdown?
Congress,” she said. “Its just everybody blaming everyone else and nothing gets done.
Indeed, our political leaders have exhibited appallingly dysfunctional behavior in recent years. But the irony is, by asking and answering that question, the media and the woman were also playing the blame game. It’s become so pervasive, so automatic, I don’t think anyone even notices they’re doing it anymore.
The following day a business news station had the CFO of one of America’s largest and most prominent companies on. About a minute into the interview, the show’s host cut the guy off in mid-sentence to go live to an all-too-familiar fear-mongering and finger-pointing rant by one of our top political leaders on the floor of the senate.
Look, we all behave badly from time-to-time. You and I are no exception. But I’ve spent more than three decades in business meetings, press interviews, hallway discussions, and boardrooms with thousands of other executives. And I’m here to tell you that, in the business world, those who play the blame game don’t survive.
Don’t get me wrong. Quite a few do manage to get to the VP or even the CEO level, at least for a time. It does happen. But they all eventually flame out, and some self-destruct in pretty spectacular fashion, I might add.
Granted, not every business leader who understands what personal accountability means is a rip-roaring success. But if you don’t get the connection between getting paid the big bucks and the buck stopping with you, then the odds of winning big are stacked against you because you’re simply not qualified for that kind of responsibility.
Now, I will make a distinction between what we say in private versus what we say in public. There are times for executives to have open and brutally frank discussions about what’s going wrong and how to fix it. Sometimes we have to call each other on the carpet and slug it out. But we’re usually savvy enough to keep it within the four walls of the office. Airing your dirty laundry never turns out well.
That’s why I’m always surprised and disgusted to see business leaders make one excuse after another, apparently without realizing how much it diminishes their credibility and their company’s brand. During his brief tenure as CEO of HP, Leo Apotheker blamed everything and everyone from earthquakes and tsunamis to competitors and predecessors for his strategic missteps and his company’s poor performance.
I have no idea what the culture was like at SAP, where Apotheker earned his executive stripes, but that sort of thing simply isn’t tolerated at well-run companies that breed great leaders. Which is probably why Apotheker was ousted from the software giant before being inexplicably hired by HP’s board.
Over the years, I’ve personally known a number of executives who attempted to build their careers and gain political clout by diminishing their peers. None of them amounted to much.
So where do leaders learn that sort of behavior? It comes from experience, both growing up and at work.
When I was a young engineer at Texas Instruments a hundred years ago, I had a run-in with a fellow employee. Both of us went crying to management, pointing fingers at each other, and our boss simply said, “Work it out yourselves or I’ll fire you both” and that was that. Lesson learned.
Thinking back on it, I should have known better. When I was six or seven, I remember coming home angry and upset about a fight with one of my good friends. My mom said I should apologize. I said, “But mom, he started it.”
She said, “Maybe he did. Maybe he thinks you did. It doesn’t really matter. If you want to stay friends, somebody has to be the bigger person and say ‘I’m sorry.’ Maybe that should be you.”
So that’s what I did. My friend was relieved and everything went back to normal. Lesson learned. So why did I need to relearn it 15 years later in my first professional job out of school?
The truth is that people with the most leadership potential are always testing their environment, pushing the envelope, searching for ways to get attention, make friends, beat competitors, gain influence, grow the business – whatever their goals happen to be at the time. We do it throughout our lives.
And while the lessons we learn when we’re young and impressionable have great power, we’re always testing them because you never know; things change. Regimes change. Rules change. And power and affluence change people who make the rules. That’s why organizations, companies, governments, even entire cultures, can change so rapidly – more rapidly than you might expect.
That’s why I’m concerned about our most visible leaders making excuses and shirking responsibility. I’m concerned that it’s being viewed and replicated across our media-centric and internet-addicted culture. And I’m concerned that it’s resonating with powerful cultural trends, namely political correctness, entitlement, and the coddling of our children and ourselves.
That’s why it’s so important that we – as parents, leaders, and individuals – hold ourselves accountable and quit playing the blame game. And when I say quit, I mean cold turkey. If I see it on air, I’m changing the channel. If I read it online, I’m done with the writer and whoever tweeted or posted it. If I see a CEO do it, I’m not buying her company’s products. That’s my stand to uphold and stop the erosion of one of our culture’s most precious traits. Hope you join me.
Steve Tobak is a Silicon Valley-based strategy consultant and former senior executive of the technology industry.
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18/10/2013 – 18:09:32Back to Ireland Home
The trial of former solicitor Thomas Byrne has heard evidence that he stole over EUR10m from EBS Building Society by fraudulently applying for property loans.
Mr Byrne (aged 47) of Walkinstown Road, Crumlin is accused of theft and fraud offences totalling EUR51.8m.
The charges allege he transferred clients’ homes into his name and then used them as collateral for property loans.
He has pleaded not guilty at Dublin Circuit Criminal Court to 51 counts of theft, forgery, using forged documents and deception between 2004 and 2007.
The jury heard that when an individual applies for a property loan they must use “unencumbered” collateral.
This means the security can’t have been used as loan collateral with any other financial institution.
Many of the charges against Mr Byrne allege he used houses as collateral with multiple banks to receive millions of euro in additional loans.
It is also alleged that some of the properties Byrne used as collateral were not registered under his name, meaning the banks had no security if he failed to meet repayments.
The court heard that Byrne applied for and received seven loans from EBS ranging in value from EUR706,000 to EUR3m.
Conor Daly, who was head of commercial risk at EBS Building Society and is now with AIB, said Mr Byrne claimed to be the owner of 32 properties which were used as collateral for the loans. His portfolio included properties in Dublin, Kildare, The UK, France and Spain.
A document listing his assets also stated that Mr Byrne was earning around EUR25,000 a month by renting some of the properties.
Mr Daly told prosecuting counsel Remy Farrell SC the loans, worth a total of EUR10,056,000, were to be repaid over a 20-year period. For the first five years interest only repayments were required.
The witness said Mr Byrne continued payments on the loans until October 2007. The trial has previously heard from counsel that this is when “the music stopped playing” for the accused and the Law Society took over his practice.
Mr Daly said that it later emerged that Mr Byrne was not the registered owner of many of the properties and therefore the mortgages were not registered. The witness confirmed that this meant EBS had no security if the accused defaulted on repayments.
Mr Daly said it was also discovered that some properties had already been used as collateral with other lending institutions including Anglo Irish Bank.
This meant EBS did not have the required “first legal charge” on the properties. If they were sold EBS would not be the first to be repaid.
Defence counsel Damien Colgan SC asked Mr Daly if EBS imposed a limit on how much an individual could borrow.
The witness replied that there was no set limit and that it was based on several factors such as the person’s cash flow and the amount of security they possessed.
The trial continues on Monday before Judge Patrick McCartan and a jury of seven men and five women.