Your Money & Business; 0363

You're money in business is me. Knight MP seems to serve all of our diverse communities and is made possible by the generous support of our members. Thank you. The Maryland Transit Administration is free to support your money in business. The public transit choice for commuting smarter and greener we're going to work with Maryland for more information. MTA Maryland dot com. Good evening and welcome to your money and business I'm Jeff sulk and on tonight's program what's the outlook for small business loans in the New Year. Some answers in our Smith business close up. Plus a Maryland based business successfully cutting the rug for 80 years. But first this week a message of financial empowerment. Joining us now is Deborah Owens author of A Purse of Your Own. Debra thanks for being here. Well thanks for having me to start with the title What's it mean. A Purse of Your Own Well this book really is about well. The

other books that I have written have been more about personal finance and the how to. This really is what I try to convey to women is that wealth is an inside job. And so I'm really using the purse as a metaphor for wealth and encouraging women to fill up that purse. And some people you believe have counterfeit purses. What's that all about. Well what it's about is it's looking the part and you know driving the nice car wearing the designer clothes and yet having nothing of real value in those purses and the fact of the matter is that even though women are earning more than ever it's far too many of us. And. At the end of the rainbow for retirement if you will with very little in that purse. In fact 40 percent of women rely on Social Security for their sole source of income and with a check of about $800 that really doesn't go very far.

Well and with 10 percent unemployment so many people are so concerned about their personal financial future. What's an ideal person if you can start from scratch what should somebody have in there. Well an ideal person really I think one of the things I implore women to do in the first chapter of the book is to clean out the purse and what I mean by clean out the purse that's really take a financial of cow accounting of where they stand. You know one of the points I like to make is you cannot change what you do not acknowledge. And so many women are walking around with a lot of debt in that purse and so that's the first thing we want to do because debt is like having a hole in the purse you can keep putting money in it and yet it will drip out if the debt continues to accumulate in the form of interest. You know I guess women and men are different in a lot of respects and money maybe is one of them but. If a guy had the financial purse financial let's call it a while. That's a much better after great invention. Most guys aren't even going to look in there. You know what I mean. You just don't want to focus on

it if especially if you know that there's some counterfeit bills in there was absolutely but the fact of the matter is men and women are walking around with counterfeit purses and wallets. And the fact of the matter is also that it's so easy to get into debt. I mean we're all using debit cards now and we're using credit cards. And because of that it's very difficult to keep track of your money. And so another exercise that I suggest in the book is that you begin by keeping a money diary and that you know sort of like a food diary they tell you. Studies show that when you keep track of your food that you have a tendency to dieters lose more weight because they are conscious of it. The same thing holds true with money. And when you begin to track where your money's going two things happen. You begin to see how those kind of mindless things that you're spending your money on. And I believe we can show some other insight and that is perhaps where you're spending your money. Could be

a good investment opportunity if you find that that's one of the staple something that you always buy. Your goal with this book wasn't just to create another successful book. You're trying to create a movement here. You know it is a movement I mean the the book is a tool in a larger framework of what we call the power of the Purse campaign and the power of the Purse campaign the goal is to engage in like any quip. 1 million women to become financially empowered. And so the book is The equip part of it. Certainly the engaging is what we're doing here just making aware and creating awareness around the need for women to take control of their financial future. And one of the things I really want to invite our viewers to go to my website Deborah ones dot com and women can start what we call purse groups now purse groups are a hybrid hybrid of a

book club and investment club. What the person group is about is to encourage women to get five to 10 of their closest friends and take this path to financial empowerment together. And so in the last chapter of the book. I call it the power of the purses Sisterhood of the purse if you will. And I encourage women I give them the exact steps that they can take to form this club I encourage them to read a chapter a month and then the next month you come back and you fraternize with your women and you the other women and you hold each other accountable because one other thing happens when you in order to accomplish any challenging go you're much more successful if you have support and accountability to do women want to focus on this stuff. If you've got a room full of guys together probably not going to talk about the credit card statement that much but I wonder if women are a little bit different in that regard.

Well no I mean I don't think women are any different but I think if you create an environment I mean no one talks about money for goodness sake. That's why everybody's in debt. Go figure. And so what we're doing with these purse groups is creating an environment through which you feel safe talking about money. So it's bigger than the credit cards. It's really getting underneath what is driving you but I think more importantly it's to help women to really identify what it is they want to accomplish financially and then get about the business of achieving financial independence. And in half a minute you want people to start focusing on. Making money per se and more on building wealth. Yes because there is a difference between wealth and income. Income you earn it and you can spend it. Wealth is something that you add to what I call adding value so. Good point thanks for making that point. Well thanks for putting it in the book so I could make it. I have a book signing coming up at

the Pratt next week at the Pratt free library downtown. That's Tuesday evening February the 2nd at 6:30 p.m. and will also have that power the persimmon are as well as a book signing so I want to invite the viewers to come out and join us. Deborah Owens Congratulations on the book thank you for being with us. Thank you Jeff. And now that tonight's made in Maryland report they have one of the largest oriental rug show rooms on the East Coast. But there's 80 year old company does more than just floor coverings. Here's a lot of office. If you've ever travelled on York Road in Taos and you can't help but notice this huge 34000 square foot building with a sign outside that says Alex Cooper auctioneer's Well there's a whole lot more than auctioneering going on for example. Right now we're located in their show room with all these beautiful rugs but they also do real estate and they sell some antique items.

Joining me now to talk a little bit more about this phenomenal company is John Levinson is the vice president how are you doing today. I'm doing well. I almost don't know where to start because your company was started actually by your grandfather back in what the one thousand twenty thousand nine hundred twenty four to be exact. How did that all get started what was he doing originally. The Originally he was in the real estate business and he was in the auction business and then he evolved into selling antiques and fine arts and then finally became even an oriental rug business who were quite diverse at Alex. Talk about the real estate in a second but since we're located in your show room right now talk to me about where your rugs come from and the variety of rugs that you have here because there's some beautiful pieces. We have rugs from all over the world the Mideast the Far East the Near East in the Balkans and not only new rugs we had old rugs and keep the 200 year old rugs and even older and for example I want to we're standing on right now which I feel bad standing on our right. Over 100 years old this one tell me about this piece is a 19th century seraphic carpet was made approximately 1875 in excellent condition. It's a great

example of its type it's very like colors. Most arrivals come in more jewel tones and warm colors this was an ivory background very unusual and in excellent condition and the one that I referenced earlier when I was walking up this is another piece from another time. That's actually during the same period this is made in the Caucasus believe it or not southern Russia. It's called a share of on Caucasian roads resemble American Indian designs a very primitive geometric and people say it's an Indian rug because usually Caucasian rugs. Right and so how is the one business going for you these days because it is a higher end item and with these tough economic times I'm just wondering if people are still buying and purchasing five in 10 $15000. Yes they are. Yes and the irony is the better one is the higher end ones the more collectible ones to sell. I think the commercial and the lesser priced ones have taken a hit like the rest of the economy has taken a hit. All right but the more expensive ones seem to be doing very well. Talk to me about the real estate side of your business because that's from what I understand how it all really got started with your grandfather back in the 20s real estate is the

big bulk of your business right. Correct. We are very much in the real estate business. We do of course owner sales we sell residential property commercial property. We also do industrial property at auction and we do a large foreclosure business and represent attorneys lenders servicers all over the country. And what do you say with the foreclosure business because you and I were talking earlier about how it's it's pretty bad out there we know that. But you know Rob you live in it. It's rough on the residential side. It's unbelievable you see what's going on with all the subprime lending that went on people being foreclosed on. And also with people on unemployment who are being foreclosed on. But I think you're going to see a real change in the commercial market right now. There started to be a real pull for the commercial markets getting very rough out there. Yeah. And you were saying how do you compete in terms of the other real estate agencies that are out here not necessarily if you're just in a different market or is it you know we have our own niche. We sell homes like realtors do. We sell commercial property like commercial realtors do. We also represent the lenders and in selling

and giving clear title with foreclosures and short sales. Okay I say. So the other aspect of your business has to do with another a whole section of this building that has to do with. And you do a lot of antique sales misstate we sell it states and fine arts and that's a very large part of our business. And how does that all work they're contacting you with donations from their state you actively seek it out. We actively seek it out certainly but we are likely to go to people in Baltimore. If you had a great piece of art or something unusual and if you don't know what you are you should talk to somebody who doesn't know what you own because a lot of times people just are knowledgeable in what they have. We have over 50 employees of Alex Cooper's experts in all fields whether it be paintings silver jewelry rugs porcelains you know just of all walks of the antique business and they're very knowledgeable about those items the history the costs about if you're looking for that kind of stuff what about also antique sales from what I understand you have every few weeks you do a big thing we open to the public. Yes every five

to six weeks we do have an antique option and we also are online live which is on the label and we can have an option and let me tell you collectors and dealers do not miss a trick we had in our last option we had betters from Eastern Europe we had from Italy from Germany from Beverly Hills. So they don't have to be in the audience. They're getting from all over the world online phasing stuff that you've got going on. Since 1940 you claim it has a name you can trust what is it about your company that makes it so special because it is a highly recognizable name. Well you know where a local company and we were taught something we were very young. Integrity. The whole thing is entirely be honest be straightforward and wear a name you can trust people. We know a lot of people in town and they know us and they can trust us. You got that right and so even though you don't have the cooper last name that was your grandfather and that's all that matters. John it was a pleasure speaking with you thank you so very much. And if you'd like to find out more information about Alex Cooper just log on to our website at NPT dot org and click on your money and business. All right Jeff that will wrap it up here from Tulsa. Now back to you in the studio.

State officials trying to jump start the creation of more affordable housing Joining us now Jamie Smith Hopkins of the Baltimore Sun. Jamie thanks for being here. Thank you. So how does the state go about creating more affordable houses. Well something they've just recently announced they say they're going to just being a federal program to essentially to to lend money to affordable housing developers to make it easier for them to build in the area. And that's not a new idea. You know it's something they've done for quite awhile but you know it's the markets for everything have been tough especially lending and so this is a case where Maryland is essentially going to team up with the Treasury Department to be able to make low interest loans available to these developers. Many parts of the state affordable housing is a big challenge. Yeah especially for the rentals which is what they're trying to do in this case. So how does that process tend to work.

It developer is the intermediary there and tries to do something right it could be a for profit developer it could be a nonprofit developer and there are many of both in Maryland and so they will usually what they say is they have to piece many things together to make a work they'll get a loan that hopefully doesn't have a high interest rates. They'll try to participate in federal tax credits maybe get some grants and funding from other government agencies or from non-profits and it's like a patchwork quilt. They say to try to make it work the same time there are government programs trying to stabilize communities that have been affected by foreclosures and I believe there's a deadline coming up. Yeah that a year and a half ago Congress said we want to spend almost 4 billion trying to stabilize neighborhoods that have been hard hit by foreclosures and they were saying you know communities you can decide you want to buy them up and rehab them do you want to tear them down. You know you decide what's what's best in a community. Well it's taken a really long time for the money to actually get to the point where it could be spent in communities and that's you know everything from the fact

that everybody had to apply for it and say what they're going to do with it and then when they got the money and they were you know they were having to put together some sort of plan to make it work so. If it hasn't actually got to the point in Baltimore where you can see any results but they are they have now selected non-profits to do the acquiring and rehabbing. That's where we are and some of these properties are owned by banks at this point. That's that's in this case that's what they're going to be going after as private property they've been taken back by the banks and need work now. But that if they rehab them could be then sold to somebody who's looking to live there. You do wonder though if you were a resident of that community and were trying to sell a house perhaps to that person who might move in if you would see this is as competition for for that potential buyer or at the same you know the other idea then is that it's stabilizing the neighborhood preventing something from happening that might drag on everybody it's interesting give and take I mean on the one hand write anything any other home for sale you know especially a potentially nicely rehab one could be competition.

If you're trying to sell the same street but on the other hand it's probably better than having a home that's in disrepair and nobody's doing anything with it. Maybe it's the pipes broken it flooded into your house I mean that there are problems that can happen when you are close by a foreclosure that's just sitting so so this program has gotten off to a bit of a slow start. What was the explanation for it. Sort of like well that's the way government works. It's last I checked about a quarter of the money has been obligated meaning that not that it's actually been spent but that they know exactly what they intend to do with it. We're getting close right. Our Jamie Smith Hopkins of the Baltimore Sun thank you for being here. Thank you. And YOUR MONEY OF BUSINESS continues right after. This. Thanks. This fall on PBS director Ken

Burns. Was. Coming. Did this painting inspire women to take to the streets demanding the right to vote. Did a 3D screen help President Kennedy stop a nuclear war. What force broke racial barriers to unite the man in this photograph. These mysteries were sent in by viewers across America what the history detectives to investigate your story. We're taking submissions now at PBS dot org. Is this the year that American banks get back on their feet.

Joining us for this week's Smith business close up is Clifford Ross the managing director of the Center for Financial policy and corporate governance. Doctor Rossi thanks very much for being with us. Thank you. Let's start with the status report. How healthy are America's banks right now and and also while we're at it why should individual be concerned about that. Well we currently look at the numbers the forecasts are that we have about another two or three hundred institutions yet to fail over the course of the next year or more. So we're not out of the woods by any by any measure in terms of getting the banking industry back to health. And that's largely because they they are still standing a large loan losses particularly for residential mortgages. But also the next leg drop on their balance sheets happens to be commercial real estate loans which are lagging the residential sector by a bit but are causing great pain as well in terms of loan losses so we expect there to be a fair amount of. Difficulty for the next 12 to 18 months around performance of these

institutions as a result of those two asset types. What do you expect for the pace of bank failures. We've been seeing a handful every week it seems. Will they continue to be relatively small or midsize institutions or anything bigger on the horizon. I think they will be confined largely to the smaller size institutions institutions certainly less than a billion dollars in assets. Although we may see one or more few Maybe that are larger than a billion dollars but in terms of all the headline news around some of the largest institutions I think were relatively out of the woods on that. But you will see a number of smaller institutions fail over the course of the next year or more. All right so if the industry is is constrained by those pressures what does it mean for. Individuals looking to get various kinds of loans or companies that are looking to finance their operations who are expansions.

Unfortunately I think it's going to be tough times for the for the next 12 to 24 months on that dimension the Fed comes out with a periodic survey of underwriting standards and banks are consistently tightening their standards more than what they were just the last year or more so from that standpoint I would expect on the consumer lending side borrowers are going to have a tough time securing the kind of credit that they need. I also think that small to medium sized businesses are going to find it problematic for them to get the kind of financing that they're looking for. For example just last year the four largest institutions. Basically declined to lend by as much as 100 billion dollars to small businesses. That's 100 billion dollars that just isn't there to finance the small to medium sized businesses and despite all the protestations from the Obama administration I think it's going to be very difficult unless you are an institution that has a large cast position and has a very good very strong balance sheet to be

able to weather the storm. Let's talk about the regulatory storm that's on the horizon for at least the the big financial institution in the previous career you were a chief risk officer at unit of Citi. The Obama administration is really cracking down or talking about it on the kinds of risks that banks can take. That's right and it's a comprehensive overhaul of the Senate and the House have their own versions of this banking reform plan and it covers all dimensions of safety and soundness as well as consumer protection. For example they're talking about creating a brand new Consumer Financial Protection Agency as well as the Obama administration last week just coming out and announcing some some reforms relating to too big to fail institutions around the size of the institutions limiting that to no more than than 10 percent of total deposits of the total institution. And then that these institutions can no longer trade in such areas as proprietary

trading or hedge funds. And you know the bottom line on this for the consumer again for the taxpayer for that matter is that we do need comprehensive regulatory overhaul for the financial services industry. Some of it is sorely needed from what we just went through in the crisis. Some of it I think maybe overreaches and several dimensions and can in the end I think particularly with things like this consumer financial protection agency we need to be a little careful that we also don't pass along higher costs to our customers as a result of this as well as confine the kind of products that they otherwise would have available to them at these times. All right Dr. Cliff are also you joining us from the Smith School of Business. Thank you for your time. Thank you. And that's our program tune in every Thursday at this week for at this time for your money and business tomorrow the latest news in Maryland politics on state circle. And remember you can get updates on all of our programs and upcoming guests by visiting our website at NPT dot org. Now for all

of us here at NPT I'm Jeff softened. Thanks for watching and have a good. Your money in business is a production of Maryland Public Television in association with the University of Maryland's Robert H Smith School of Business and the Baltimore Sun. The Maryland Transit Administration is free to support your money in business in the public transit choice for commuting smarter and greener. We're going to work with Maryland for more information. MTA Maryland dot com. This program was made by NPT to serve all of our diverse communities

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