Saturday, April 8, 2017

Slow Saturday Flashback: Bank $hot

It's up....

"Black-owned banks see surge in deposits" by Akilah Johnson Globe Staff  September 10, 2016

The rallying cry emerged after a summer that saw the nation, once again, engaged in discussions about race, policing, and inequality.

Instead of just taking to the streets after the deaths of black men at the hands of police and the subsequent murder of officers, protesters were urged — through hashtags like #bankblack and #blackdollarsmatter — to deposit $100 each into black-owned banks.

And for Boston-based OneUnited Bank, the nation’s largest black-owned bank, the impact of the “Bank Black” movement was almost immediate. The bank, which has struggled in recent years, added more than $10 million in deposits in less than a month, said Teri Williams, the bank’s president.

“The goal of the Bank Black movement is not just to get people to move their money but also to move their minds,” Williams said. “We’re one of the only communities that’s not circulating our dollars within our community. Just 2 percent of our dollars are spent in the black community.”

The bank started its own #bankblack challenge, holding events in Los Angeles and Miami, where it also has branches, and will hold an event at Jubilee Christian Church in Mattapan on Saturday.

Matthew K. Thompson, senior pastor at Jubilee, said he was unaware of the social media campaign that began in July, when he was celebrating his anniversary in Paris. But while he was in the City of Light, he said, he received a serendipitous message from God about the church becoming a steward of congregants’ fiscal as well as spiritual health. When Thompson returned home, he contacted OneUnited.

“I had read some things about them, some positive things and some negative things, but never had a personal, one-on-one, conversation with them,” Thompson said of the bank that loaned his father the money for Jubilee to purchase one of its first buildings.

Black-owned banks in Georgia and North Carolina are also seeing increased interest and activity as a result of the social media campaign that started in July, after the fatal shooting of two black men by police officers in Minnesota and Louisiana and the death of five Dallas police officers, allegedly killed in revenge by a black man. Black celebrities — such as Rapper Killer Mike and Solange Knowles (Beyonce’s sister) — urged people to express their frustration not by taking to the streets but by moving their money.

At Saturday’s #BankBlackBoston event, new accounts can be opened and there will be a talk on financial literacy. At OneUnited’s Miami event, 550 new accounts were opened, Williams said.

The windfall of new business marks a turnaround for an institution that drew widespread attention over the past few years after failing to repay a $12 million government loan it received after the recession and nearly shutting down a historic black Boston church after it failed to pay back a construction loan. 

Related: Foreclosure Was Church's Fault 

United we fall!

The profits of the Boston-based bank, which has about $630 million in assets, have tumbled over the years, with the bank making a profit of just $48,000 last year, according to the FDIC. And it has written just over half a dozen mortgage loans in the Boston area since 2014, while community banks of similar size in Massachusetts make that many loans in a month.

Black-owned banks across the country have struggled in recent years to keep pace with a changing world. Many only had one or two branches in urban areas with large black populations. As middle-class blacks began relocating to the suburbs, few black-owned banks followed.

The banks were also slow to adopt the technology that has become ubiquitous with banking today. And black-owned banks were hit particularly hard by the recession in 2008 and subsequent real estate crisis.

Over the years, the numbers have dwindled, going from 48 in 2001 to just 23 today, according to the Federal Reserve.

The Bank Black movement, however, is not new but one with a long history in the United States, according to James Jennings, professor emeritus of race, politics, and urban policy at Tufts University.

For decades, activists and civil rights leaders realized economics was destiny, arguing that without economic power, political and civil rights gains would be fleeting. Martin Luther King Jr., in his last speech in 1968, called for a “bank-in movement,” telling blacks in Memphis to “take your money out of the banks downtown and deposit your money in Tri-State Bank,” a black-owned bank.

That could be another reason they killed him; when you look back through history, you find that most of our murdered presidents stood against the banks.

Black-owned banks became cornerstones in African-American neighborhoods, lending money for homes, college funds, and businesses at a time when mainstream banks and the federal government often did not.

“Economic power and wealth infrastructure is something that is less easily taken away in the political arena than other things,” Jennings said. “Not that it’s a panacea, but being able to hire people, being able to make decisions about how a community is going to look based on the economic activities that are going on, that could be very, very powerful.”

William Michael Cunningham, a social investing adviser with Creative Investing Research, said that although the need for black-owned banks remains as real today as when they were established, many do not have the political capital to effect systemic change.

Since 2004, Cunningham said, investors have poured billions into banks. “And virtually none of that has been allocated to black-owned banks,” he said. “So as long as that’s the case . . . having an event on Saturday with a failing black-owned bank won’t make a long-term difference. It won’t make a long-term dent.”

Black buying power is about $1.1 trillion, according to Nielsen consumer reports.

In the Greater Boston area, the total median assets — home, car, retirement fund, life insurance — for a black family is $700; while the total median assets for a white family is about $256,000, said a 2015 study by the Federal Reserve Bank of Boston.

“The question becomes: How do you harness and channel the spending of that $1.1 trillion so you’re actually benefiting from it?” said Darnell Williams, head of the Urban League of Eastern Massachusetts, whose mortgage is with OneUnited. There is a multiplier effect that comes when money circulates through a community by helping to create jobs and establish wealth, he said. “As long as the product is available, why wouldn’t you want to support your own?”


.... and good!

"Stocks in sell-off after Boston Fed chief’s remarks on rates" by Deirdre Fernandes Globe Staff  September 09, 2016

Federal Reserve Bank of Boston President Eric Rosengren’s more robust call to raise interest rates — warning that inaction could overheat the economy — pushed stocks to their lowest point in two months on Friday.

The Dow Jones Industrial Average closed down nearly 400 points, giving up most of the gains of the summer after Britain’s vote to exit the European Union. In a day of steady downhill trading, the Dow closed at 18,085, losing 2.13 percent.

Rosengren has publicly worried that leaving rates this low for so long risks creating a bubble, particularly in the commercial real-estate market. 

Already has/is.

Still, some economists were skeptical that the Fed will raise rates for the first time since last December at the Sept. 20-21 meeting. “The recent data performance has not supported the September move,” said Sam Bullard, a senior economist with Wells Fargo Securities. While US employers are adding jobs at a steady clip, wage increases have lagged.

Central bankers also seem to disagree about the timing for a benchmark rate increase, said Nariman Behravesh, chief economist at IHS Inc., a forecasting firm in Lexington. “The committee is very divided, there’s no clear consensus,” he said.

On Friday, Federal Reserve Governor Daniel Tarullo, also a voting member of the rate-setting committee, said during a television interview that he would like to see a sustained increase in inflation before a rate increase, although he didn’t rule out one this year.

Central bankers have also been wary of raising rates so close to a presidential election for fear of being perceived as influencing the results, Behravesh said.

Still, Rosengren’s speech illustrated that Fed members seem to be inching toward a rate increase.

Despite global economic turbulence, the US economy has proven resilient, Rosengren said. He expects US economic growth to pick up in the second half of 2016, and the labor market to tighten further.

Those are the lies they keep telling us, yeah.

Keeping rates too low may also fuel a commercial real-estate boom as investors from around the world chase higher returns by putting their money into apartments and office buildings, Rosengren warned.



"Foreign buyers at Millennium Tower show that Boston is on a world stage" by Tim Logan Globe Staff  August 30, 2016

For proof that Boston has become a luxury housing mecca for wealthy people from around the world, look no farther than Downtown Crossing.

Now go put $100 dollars in.... never mind.

At the high-end Millennium Tower, buyers have come from Greece, Hong Kong, and the Middle East, scooping up condos two or three apiece. There’s a real estate executive in San Francisco who markets luxury US properties in Asia, and claims on her website that she’s sold 7 percent of the tower — roughly 30 units.

And then there’s the recent immigrant from China, Bingyi Chen, who lives in a modest townhouse in Concord and has bought at least 16 condos on behalf of investors in his native country, according to property records and his real estate agent. He paid $15.6 million in total. All cash.

Most of those 16 units are directly above each other in a narrow strip running up to the 30th floor of the 60-story building. They are listed for rent, starting at $4,100 a month, with the proceeds heading back to investors in China.

“It’s all about the investment opportunity,” said Charles Wang Pan, a real estate agent who represents Chen and his wife. “This is a job for them.”

It’s also an example of the global housing market in action.

With its crop of luxury condominium buildings sprouting out of the ground, Boston is an increasingly popular destination for international real estate investors looking to park their cash in an uncertain global economy. The city is a bit cheaper than New York or San Francisco, but boasts a stable economy, world-class universities, and a growing list of international flights.

“Boston’s a very attractive investment market,” Wang said. “The long game is lucrative.”

That’s creating a market for condo developers to sell their high-end units essentially around the world.

Millennium Partners, which built the tower along with luxury condos in New York and San Francisco, maintains offices in several major Asian cities. For its project here, it launched a website in Mandarin.

To be sure, downtown professionals and empty-nesters from the suburbs are also big buyers of luxury real estate.

Isn't that phrase used to concede the truth of something that conflicts with another point that one wishes to make? 

Back where I come from we called that spewing bullsh.... 

“We get a lot of inquiries. We’ll look at each one individually, sometimes it depends on the timing,” said Richard Baumert, Millennium’s top sales executive who expects the number of international buyers to climb as more luxury towers open in Boston.

“We’ve only seen the tip of the iceberg,” Baumert said. “This city is on a world stage right now. People want to be here.”

Foreign buyers spent $102.6 billion on residential properties in the United States in 2015, according to the National Association of Realtors, up more than 50 percent since 2010. And while purchases by buyers from Canada and the United Kingdom have fallen in that time, they have surged from China, nearly tripling to $27.3 billion last year, the real estate group reported in June.

Specialists expect those figures to only increase as the swelling ranks of wealthy Chinese look for ways to diversify their holdings outside of China and gain a foothold here — either for themselves or for their children who are studying in the states. A study by Rosen Consulting Group, a real estate economics firm in Berkeley, Calif., predicted Chinese buyers could spend $50 billion on US homes by 2025.

No need for any wars then, right? Right? RIGHT?

“A lot of that is for investment purposes,” said Arthur Margon, who coauthored the study. “It’s investing for income, and investing in what appears, to Chinese eyes, to be a more stable environment.”

That intense interest, however, is forcing some luxury developers to strike a delicate balance, said Sue Hawkes, who runs The Collaborative Cos., a marketing firm that works with high-end complexes in Boston.

Investors — especially those who buy in bulk — can take many units off a developer’s hands, fast. That’s cash in the bank. But they’re more likely to rent the units, or even leave them empty. Many developers prefer the stability of owner-occupants, Hawkes said, who make units more attractive for resale than if the building were full of renters. For now, she said, many developers of new condo projects here are trying to limit the number of units they sell to investors.

“It’s a little bit like holding back a tidal wave at this point,” Hawkes said. “There’s a much bigger market out there than anybody has tested.”

Some buildings set a cap on investor purchases. Pierce Boston, a 30-story tower under construction near Fenway Park, will limit investors to 25 percent of the building’s 109 condos, said Leslie Cohen, chief operating officer at developer Samuels & Associates. And no bulk purchases are allowed.

Cohen acknowledged that strategy could potentially slow sales, and might dampen pricing a bit — units in the Pierce start at around $1 million. But Cohen said Samuels believes a building with a lot of owner-occupants is more valuable in the long run.

“A buyer is a buyer. But we don’t entertain people who are inconsistent with what we’re trying to do,” said Cohen, whose firm has developed nine buildings within a few blocks along Boylston Street and Brookline Avenue. “Our goal is activating the entire neighborhood.”

Baumert, the Millennium sales executive, said his company designed the luxury tower to encourage a sense of community among its owners, building an elaborate two-story club and scheduling social events.

“For the lifestyle we’re trying to create to work in the way we hope, it requires there to be local residents,” he said. “That’s an important priority for us.”

Still, Michael Krupa said local developers would be foolish to ignore the global buyers who want a piece of Boston. Krupa is president of Gemdale USA, the New York-based arm of a major Chinese home builder investing in a condo and office tower proposed at South Station.

“There’s a buyer base from around the world that wants to be in Boston,” he said. “It’s a city with extraordinary fundamentals right now.”

Indeed, Gemdale, which sold 45,000 homes in China last year, plans to tap its network of buyers in Asia to help sell condos at South Station. But he, too, acknowledges that too many investor-owners can make for a building where it feels as if no one’s at home.

“You don’t want to have safe-deposit-box condo units that are sitting empty. They don’t add to the vibrancy of the community,” he said. “You want to have a good cross-section.”

Chen, the buyer of the Millennium Tower units, and his wife have bought other condos in Boston in bulk before. In 2013, a shell company linked to Chen and his wife, according to property and corporate records, spent $2.9 million to buy six units at a condo project in East Cambridge. Later that year, they paid $11.3 million for 12 condos at Millennium Place in Downtown Crossing.

Combining that with three other condos scattered around town and their new units at Millennium Tower, the couple has spent at least $31.5 million in Boston over three years.

Through a translator, Chen and his wife declined to comment, citing language barriers and a desire for privacy. But the Chens allowed Wang to discuss their purchases, which were made through two shell companies he manages.

What kind of companies? Sounds illegal to me.

Wang said his client worked in commercial real estate in China and taps a network of investors and clients there to bundle money and buy condos here. He described Chen more as a portfolio manager than a real estate mogul.

The Chens moved to Boston several years ago, Wang said, and live here with their small child on an EB-5 visa, which grants a green card in exchange for a $500,000 investment in a company that creates 10 jobs.

Wang himself is based in New York and said 90 percent of his clients are Chinese, mostly investors. Many are aiming to move money to safer havens in the United States, and like to buy new condos as investment properties, for family studying here, or to eventually move here themselves. It’s a highly specialized line of work that the graduate of Boston College, who speaks three languages, tried out as a young agent in Boston, and now makes the bulk of his business....