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Something to think about?

August 7, 2023

BY: Sammy Beethoven

I was asked to write a weekly column by the good people over at MINA Lenders the purpose of which was to give its readers a sense of what is going on in the Camden, NJ area as compared to the rest of the nation. It really not fair to compare Camden to any other area; it’s like fifty years behind the times and so much has changed in the world while Camden was left to its own means and went through years of deterioration; like nobody really cared.

I hope you will read what I have to say each week; I’m a professor by trade, teaching economics and finance. I also give people advice on how to invest their money. I am not always right, some say way to conservative, which has caused me to miss a few run, both up and down, but my clients always make money, even if it is less than wished if they had followed a more aggressive strategy. Right this moment my portfolio looks like 50% 3month to three-year T-bills, which have been averaging over 4.5% and 25% in an S & P 500 ETF, and 15% in a commodity ETF and 10% in a high yield ETF. Would I have been better investing it all in the S&P since the beginning of the year? You betcha, but had the market not performed as well as it has, I was far more protected than just having all my money in the market, and I have received over a 9% blended yield which is better than a punch in the nose.

I took a look at a recent set of statistics from Camden, the city, and was surprised to see its economic performance compared to the rest of the country. For this edition I just looked at the labor market, and was shocked to see how poorly Camden has performed. The unemployment rate at the beginning of the year in Camden was a whopping 27.8%, which is worse than the average nationwide during the great depression of 1929-33. But wait it gets worse, the preliminary numbers for June show the unemployment rate at 31.4%. As I’m sure you’ve the nation right now is near it lowest unemployment rate ever at around 3.5% and it’s been hovering around there for most of the year. The unemployment rate for blacks is a bit higher at 5.8%, but Hispanics had only a 4.4% rate. So why is the rate over 10x the national rate in Camden? There have been a dozen studies published over the last 25 years and 2 or 3 model plans developed for the city but is still remains at the bottom of the pile. Cooper Hospital and companies like Campbell Soup have poured millions and millions into the city but what return has the city gained?

My best guess is education, or should I say the lack of education. You can’t start a business if you don’t know how to write a business plan, and you can’t go to your local ABC Bank without detailed financial projections which include income statements, balance sheets, and cash flow projections. Most people would have as much success developing a decent balance sheet as I would building a nuclear reactor. The people need to be educated. I recently read one study on where the level of education is the highest and the three top ranked countries were: Israel, China, India. Maybe this is how you account for nearly 40% of America’s billionaires have some Jewish identity while making up only 2.2% of the population.

Something to think about?

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