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  • Economic Recovery Definition: Is the Economy Really Getting Better?

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    What is the definition of an economic recovery? This is the hot finance topic of the week. As the White House unrolls a PR plan to try and demonstrate that the recession is over thanks to the administration’s efforts, the question of how to exactly define economic recovery is causing confusion. Let’s look at the facts and try to determine an economic recovery definition.

    President Obama has claimed that 650,000 jobs have been created or saved through his stimulus plan. The Dow increased by 200 in response to the good news. Plus, the economy grew last quarter for the first time in a year at a rate of 3.5%. Modest, but good. There is also the increase in home sales reported in September. And even Ford posted a profit of nearly $1 billion this year, which came as a surprise to the business community. But do these positive reports illustrate that our economy is set for permanent stability?

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    Home Sales Up
    Chart shows new home sales for the past 13 months, seasonally adjusted
    AP
    AP

    Home Sales Up

      Chart shows seasonally adjusted annual rate of pending U.S. home sales

      AP

      Chart shows seasonally adjusted annual rate of pending U.S. home sales

      AP

      In this Wednesday, Oct. 21, 2009 photo a sign for a home under contract is seen in Philadelphia. The volume of signed contracts to buy previously occupied homes rose for the eighth straight month in September as buyers scrambled to take advantage of a tax credit for first-time owners that expires at the end of this month.(AP Photo/Matt Rourke)

      AP

      In this Wednesday, Oct. 21, 2009 photo a sign for a home under contract is seen in Philadelphia. The volume of signed contracts to buy previously occupied homes rose for the eighth straight month in September as buyers scrambled to take advantage of a tax credit for first-time owners that expires at the end of this month.(AP Photo/Matt Rourke)

      AP

      Chart shows new home sales for the past 13 months, seasonally adjusted

      AP

      Shea Homes townhouses are seen at the Victoria Gardens development in Rancho Cucamonga, Calif., Tuesday, Oct. 27, 2009. The number of buyers snapping up new homes dipped unexpectedly last month as the effects of a temporary tax credit for first-time owners started to wear off. (AP Photo/Damian Dovarganes)

      AP

      Chart shows new home sales for the past 13 months, seasonally adjusted

      AP

      In this photo made Oct. 26, 2009, a new development of townhouses is seen in Wakefield, Mass. Sales of new homes dropped unexpectedly last month as the effects of a soon-to-expire tax credit for first-time owners started to wane.(AP Photo/Lisa Poole)

      AP

      In this photo made Oct. 26, 2009, a new development of townhouses is seen in Wakefield, Mass. Sales of new homes dropped unexpectedly last month as the effects of a soon-to-expire tax credit for first-time owners started to wane.(AP Photo/Lisa Poole)

      AP

      New home models are shown in Homestead, Fla., Tuesday, Oct. 27, 2009. Sales of new homes are expected to post their sixth consecutive monthly gain as builders reap the benefits of a tax credit for first-time owners that expires at the end of next month. (AP Photo/Alan Diaz)

      AP

    Some say no. Increases in car and home sales have been spurred by federally-backed incentives like the $8,000 first time homebuyer tax credit and the cash for clunkers program. These increases don’t stand on their own as signs of consumer strength. So what can we use to define economic recovery?

    Writers at the Wall Street Journal believe the jobless rate is a much more meaningful benchmark. But right now it is too soon to tell exactly where that rate is heading based on the statistics available now. So even the jobless rate cannot help us develop a reliable economic recovery definition until we have more information.

    Let’s try looking to the president for his definition. The POTUS has declared: “The benchmark I use to measure the strength of our economy is not just whether our GDP is growing, but whether we are creating jobs, whether families are having an easier time paying their bills, whether our businesses are hiring and doing well.” (CBS News)

    As unemployment remains high and it is still difficult for people to get loans, we are clearly far from a lasting economic recovery — by the definition of the president himself. But as we have faced the worst economic decline since the Great Depression, it is silly to expect our economy to fully recover after a few months of federal intervention. Obama’s stimulus plan may not have created a full economic recovery within months, but it has helped many families survive what could have been a much worse financial scenario. It has also supported state governments that provide social services like police and teachers to all.

    This type of relief may not fit an expert’s economic recovery definition, but it has helped society overall in the short term. For that alone the president can be commended.

     

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  • NBA, referees agree on 2-year contract (AP)

    The regular referees made the call. They're coming back to work. The referees union and the NBA agreed on a two-year contract Friday, ending a lockout of more than a month and saving the league from using replacements when the regular season starts. The officials voted to ratify the deal that was reached earlier this week.

  • Dr. Boyce Money: Rapper Nas in Serious Tax Trouble

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    Hip Hop Wired is reporting that the rapper Nas is having some serious financial problems. In addition to owing his wife Kelis $44,000 per month in child support, it turns out that the artist also owes the federal government another $2.5 million in taxes. Here are quick thoughts about Nas, love and money:

    1) Nas has a complicated life. His decision to marry the “love of his life” is going to cost him for the rest of his life. The rapper’s tax situation could be due to irresponsibility (as appears to be the case with Method Man and Nicolas Cage), or it could simply be a matter of using write-offs that were not allowed by the IRS. We can’t assume that Nas’ tax trouble automatically makes him into a horrible citizen.

    2) He is not as rich as you think. I remember Will Smith once explaining how “a million dollars really isn’t that much money.” After Uncle Sam takes half, and the agents and attorneys get their cut, you are lucky to have $350,000 left over. Sure, that’s plenty of money, but it may not be very much money relative to the cost of living the celebrity lifestyle, and taking care of all the friends and relatives begging you for financial support. Success is a beautiful thing, but the problem is that success draws attention and financial vacuum cleaners who want to suck you dry. So, I am not sure why every artist loves to show the world how rich he is. I’d be quiet about my wealth.

    3) Please explain $44,000 per month in child support? Many men who make the kind of money that Nas allegedly makes (reported to be $250,000 per month) are considered to have infinite wealth. The truth, however, is that much of his income as an artist is volatile, uncertain, and likely to go down over time. The idea that he is being asked to pay so much in child support seems to neglect the fact that his resources do not go as far as Kelis and others might be inclined to think. The next time someone wonders why wealthy celebs don’t want to get married, they only need to look at the case of Nas and Kelis to find the answer. Love is supposed to be priceless, but child support courts seem to know exactly what that price should be.

    When it comes to Nas, Kelis and the IRS, the bottom line is this: Nas needs a financial intervention to help him to realistically manage his financial life. By analyzing his situation and others, we also can learn how our personal decisions in love and life can affect our financial situation. The truth is that who you choose to marry and how you manage your relationships plays a huge role in your financial stability. Finally, I am a fan of carefully constructed prenuptial agreements, so that wealth can be shared in such a way that marriage doesn’t become financially devastating. They say love and money shouldn’t mix, but relationship mistakes should not cost millions.

    Dr. Boyce Watkins is a Finance Professor at Syracuse University and author of the book, “Financial Lovemaking 101: Merging Assets with Your Partner in Ways that Feel Good.” To have Dr. Boyce commentary delivered to your email, please click here.

     

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  • HOT COPY: Toni Braxton Facing Foreclosure

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    Toni Braxton Facing Foreclosure

    In addition to battling health issues over the years, Toni Braxton has also been plagued with financial woes. Earlier this month, the Grammy Award winner was slapped with a counter suit by insurance firm Lloyd’s of London after she sued the company for refusing to pay her when she canceled a show in 2006 due to heart problems. To make matters worse, the ‘Another Sad Love Song’ singer has also defaulted on her mortgage payments and is facing possible foreclosure on a California residence. Head over to TMZ for more details.robin givens

     

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  • Regulators Issue Cease and Desist Order to Chicago Bank

    Chicago-based Highland Community Bank received a cease and desist order earlier this month from federal and state regulators that charges the company with engaging in unsafe and unsound banking practices. The order also suspends the bank’s authority to pay cash dividends or increase assets without regulator permission.

  • Lamar Odom and Khloe Kardashian Get Married: 5 Questions I’d Like to Ask

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    Today, we are going to use an interesting story in black celebrity news to teach a short lesson called “How NOT to make major life decisions.” Let’s start the conversation, shall we?

    NBA Star Lamar Odom has decided to marry Khloe Kardashian, whose sister Kim usually takes up all the family spotlight. The story goes that Khloe was hosting a “Welcome to LA Party” for new Laker, Ron Artest. Khloe allegedly ran the bill up to $3,000 and Lamar agreed to pay it. Could four weeks of love be built on a more stable foundation than money? The wedding ceremony was, in many ways, a fairytale: Celebrities everywhere, a triple arch of white roses, a serenade by the singer Babyface taking place at a private home in Beverly Hills. The Fresh Prince of Bel-Aire would be proud.

    But after the last piece of cake has been eaten and the wild honeymoon lovemaking is over, Lamar and Khloe then have to confront the reality of their choice. Based on what I’ve read, I’d be willing to bet a pair of Air Jordans that their marriage doesn’t last 3 years. I’d hate to rain on anyone’s romantic parade, but we’ve got to be honest when it comes to choices like this.

    Here are some questions I’d love to ask Lamar Odom and Khloe Kardashian:1) You’ve been dating for just a month? Are you serious? Love is a tricky thing. Most of us have been fooled by the first few weeks of a new relationship, thinking that Mr/Mrs. Right Now was Mr./Mrs. Now and Forever. There is scientific evidence that the chemical reactions in your brain during the lovemaking process are similar to mild injections of cocaine, which explains irrational behavior during the beginning and end of relationships. I don’t doubt that Lamar and Khloe are in love, but most of us know that the first month of a relationship makes it difficult to distinguish between being “in love” and being “in lust.” Why sign a legal contract until you’re completely sure?

    2) What’s up with the prenup? You DO have a prenup don’t you? I can define the word “prenup” with the following sentence: Four years, $32 million dollars. Yes, that’s the size of Lamar’s latest contract with the Lakers, and the reason I hope this 29-year old has protected his assets. Sure, Khloe’s family isn’t struggling either, but I presume that Lamar has taken the time to protect his wealth. If he hasn’t, then he deserves whatever happens as a consequence.

    3) Baby rumors anyone? After hearing that Khloe might be pregnant, some of this started to make sense. I presume that the baby belongs to Lamar, since Khloe doesn’t exactly look like she’s been carrying anybody’s baby for longer than a month. Lamar also has some baby mama drama of his own, with the children he created in a prior marriage. If you ever want a recipe for massive financial strain, try getting married too quickly and having a bunch of children in the process. It takes a few minutes to make a baby, but the child support can last a lifetime. We might be tempted to think that Lamar’s massive wealth makes child support a breeze, but the problem is that the more you earn, the more they make you pay. There’s nothing more difficult than being an ex-NBA player still paying NBA-level child support.

    4) What about your other kids Mr. Odom? When asked about the wedding, Liza Morales, Lamar’s ex-wife, sounded as if she were trying to survive a terrorist attack or a death in the family. According to TMZ, Odom’s ex-wife had this to say:

    “Yes, the circumstances over the last few weeks have been upsetting but none of my actions publicly or from the privacy of my home could be classified as a meltdown. I have maintained a brave face for my children who are my main concern and I remain strong for them.” She went on to say she has “the support of my family and friends and Lamar’s family have been nothing but supportive of me and the kids during this difficult time. I wish Lamar nothing but happiness we all deserve to be happy.”

    What’s also interesting is that Lamar’s other kids didn’t come to the wedding. I wonder if Khloe can smell the ensuing drama?

    OK, now that we’ve used Lamar and Khloe’s situation as our case study on how NOT to make major life choices, let’s find our true teachable moments (you know I don’t just do celebrity stuff unless there is a lesson in there somewhere):

    The bottom line is this: Marriage is a serious decision, not something that should leave you focused on the elegance of the ceremony or the romance of being able to pick out bridal gowns. Some of us get so excited about the idea of having marital legitimacy that we forget the fundamental truth that LOVING together means LIVING together. If you haven’t known someone long enough to be sure you can live with them, then you probably don’t know if you can ever truly love them.

    Secondly, we must be aware of the drug of lust, in which the chemical highs of sex can lead us to make damaging life choices. Many a celebrity has been left financially devastated by poor relationship choices in their 20s and 30s. Finally, if people have lives as complicated as Khloe and Lamar, at least a year of study is necessary to figure out if they can cope with all the complex externalities of each other’s personal lives: baby mama drama, professional issues, addictions, financial habits, etc. If you marry someone after a month and find out later that they have serious problems you can’t deal with, you only have yourself to blame.

    This is not just a lesson for Khloe and Lamar, but a lesson for all of us. If you claim that you never made mistakes when you were young and in love, then you are probably just a big ol liar.

    Dr. Boyce Watkins is a Finance Professor at Syracuse University and author of “Financial Lovemaking 101: Merging Assets with Your Partner in Ways that Feel Good.” To have Dr. Boyce commentary delivered to your email, please click here.

     

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  • Bills fire off. coordinator Schonert (AP)

    FILE - In this Sept. 3, 2008, file photo, Buffalo Bills offensive coordinator Turk Schonert talks to a player during NFL football practice at Ralph Wilson Stadium in Orchard Park, N.Y. Schonert was fired on Friday, Sept. 4, 2009, after the offense's dismal performance in the preseason.

    Buffalo Bills coach Dick Jauron is committed to sticking with the no-huddle attack entering the regular season — just not with the offensive coordinator who spent the year installing it. Unhappy with his offense's dismal performance this past month, Jauron fired Turk Schonert on Friday, a day after the Bills closed the preseason with a 17-6 loss to Detroit.

  • Vick eligible to play in third game (AP)

    Philadelphia Eagles quarterback Michael Vick(notes) is seen during afternoon practice at NFL football training camp in Philadelphia, Monday, Aug. 31, 2009.

    Michael Vick got the green light for full reinstatement in the NFL on Thursday when commissioner Roger Goodell said the disgraced quarterback could play later this month instead of waiting until October. Vick, recently signed by the Philadelphia Eagles, will now be able to play in the Sept. 27 game at home against the Kansas City Chiefs.

  • Bengals finally ink top pick Andre Smith (AP)

    Offensive tackle Andre Smith signed a contract Sunday with the Cincinnati Bengals, ending an impasse that dragged on a month into the preseason. The Bengals originally planned to have Smith start at right tackle, but he has missed all three preseason games. He was in Cincinnati and agreed to the deal shortly before the start of a late afternoon practice.