The SBA and fugacious

fugacious
(fyoo-GAY-shuhs)
Lasting a very short time.
From Latin fugere (to flee) which also gave us other words such as fugitive
_____________________________________________________
TIP OF THE WEEK

On February 17th , 2009, SBA’s secondary market program for First Lien Position 504 Loans (“Program”) was established by statute in Section 503 of the American Recovery and Reinvestment Act of 2009 (the “Recovery Act” or the “Act”).

On November 5th , 2009 SBA published the guide for the Secondary Market First Lien Position 504 Loan Pool Guarantee Program.

On May 13th , 2010, the SBA announced the start of the Secondary Market First Lien Position 504 Loan Pool Guarantee Program.

On July 15th, 2010, the first loan pools are expected to be ready for sale.

On February 16th, 2011 the Secondary Market First Lien Position 504 Loan Pool Guarantee Program terminates.

If that sounds fugacious, keep in mind that there are only 10 working days left until Recovery Act SBA loan provisions providing an increased guarantee and fee reductions expire.
_________________________________________
Indices:

PRIME RATE: 3.25%

SBA LIBOR Base Rate May 2010 = 3.28%

SBA Fixed Base Rate May 2010 = 6.48%
________________________________________________
504 Debenture Rate for May

The debenture rate is 4.11% but note rate is 4.17% and effective yield is only 5.52%.
________________________________________________
AHEAD OF THE YIELD CURVE

Did you notice that the SBA LIBOR base rate jumped up this month?

Historically, LIBOR rates have consistently been about three percentage points less than the Prime Rate.

In November of 2008, the SBA LIBOR base rate was provided as the secondary market for 7(a) guaranteed portions died when LIBOR and PRIME rates actually converged.

Now LIBOR is once again acting up.

30 day LIBOR is at .34 percent while 90 day LIBOR is at .45 percent. This is at the highest level since last August. The rate was as high as 482 basis points in 2008 during the global credit crisis.

The fear and paranoia extend to the long end of the yield curve.

Last week a $16 billion sale of 30-year bonds drew a yield of 4.49 percent. The yield has dropped from 4.77 percent at the last sale of the securities on April 8.

The bond’s average yield was 4.49 percent from Dec. 31, 2007, through Sept. 12, 2008, just before the collapse of Lehman Brothers.

It is now at 4.32 percent.

Here is what the 30 year bond has been doing:
2001- 5.49
2002- 5.43
2003- ND
2004- ND
2005- ND
2006- 4.91
2007- 4.84
2008- 4.18
2009- 3.89
2010- 4.61

What a minute, why no numbers for 2003, 2004, and 2005?

One month after the 9/11 attacks, the Treasury 30 year bond is discontinued. When the Treasury mothballed the 30-year bond in 2001, experts speculated it was trying to drive down long-term interest rates, which had remained stubbornly high while the Federal Reserve was slashing short-term interest rates to revive the economy. When the Treasury discontinued the 30-year bond in 2001, its yield fell 35 basis points in one day. Why? A shrinking supply of the 30-year Treasury bond caused increased demand to drive rates down.

What does all this mean?

I don’t know. It would appear that the savings from low variable rates of interest should continue for an "extended" period.
_________________________________________________
OFF BASE

The fugacity of one’s life can be predicted based upon a smile.

When researchers Ernest Abel and Michael Kruger from Wayne State University examined the 1952 Baseball Register photos of 230 Major League Baseball players who started playing before 1950, they found the span of their smile accurately predicted their life span. The players were rated as to "no smile" if they stared blankly at the camera, "partial smile" if the muscles around their mouths were only slightly raised and "full smile" if they had a wide grin with both cheeks raised.

The researchers found that the wide-grinning players were half as likely to die in any year compared to non-smilers. As of June, 2009, the players who were deadpan for the cameras lived an average of 72.9 years, those with slight smiles died at age 75 and those with the most beaming smiles lived the longest — 79.9 years. Of the 230 players, 46 players were still alive. The scientists also did a follow-up study to see whether attractiveness correlated with longevity and found that good looks did not add significantly to life span. In any case, far fewer individuals had full smiles — 23 — than partial (64) or no smiles (63).

So smile, you'll live longer.