The SBA and surcease

surcease
(suhr-SEES)
noun: Stoppage, especially a temporary one.
verb tr., intr.: To bring or come to an end.
From Middle English sursesen/surcesen, via French from Latin supersedere (to refrain from), from super- + sedere (to sit).
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TIP OF THE WEEK

Is it a surcease in falling commercial real estate values?


The Moody’s/REAL All Property Type Aggregate Index measured a 1.7% price increase in
April. Since the low in prices recorded in October of 2009, prices have rebounded 4.7%.
The peak of the index occurred in October 2007 and prices are currently
41.1% below the peak.

If you would like a copy of this report, let me know.

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SBA Loan Recovery ACT provisions have come to a surcease thanks to our politicians.

Legislation failed by a 57-41 vote. That means no increased guarantee or fee waiver.
Democrats needed 60 votes to overcome the GOP fillibuster of the bill.
The bill will now be pulled, according to Democratic leadership aides.
This leaves many groups in flux, including the jobless who have lost their safety net.

Despite the expiration of these Recovery ACT provisions SBA loans still provide an attractive financing option and are available.
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Indices:
PRIME RATE= 3.25%
SBA LIBOR Base Rate June 2010 = 3.35%
SBA Fixed Base Rate June 2010 = 6.24%
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504 Debenture Rate for June
The debenture rate is 3.88% but note rate is 3.94% and effective yield is only 5.29%.
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AHEAD OF THE YIELD CURVE
SBA Loan Recovery ACT provisions are not the only government stimuli with surcease.

Purchases of new homes in the U.S. fell in May to a record low as a tax credit expired, showing the market remains dependent on government support. Sales collapsed a record 33 percent to an annual pace of 300,000 last month from April, the fewest in data going back to 1963. New-home sales are considered a timelier barometer of the market than purchases of previously owned homes, which account for about 90 percent of the housing market. New home sales are counted when the contract is signed. A report last week showed sales of previously owned homes unexpectedly fell in May, adding to concern the retrenchment following the end of the tax incentive will be deeper than anticipated. Existing house purchases, calculated when a contract closes, dropped to a 5.66 million annual rate, the National Association of Realtors said.

Will this extend to the labor market? Payrolls rose by 431,000 in May, including a 411,000 jump in government hiring of temporary workers for the 2010 census. Those workers were temporary are now being let go.



Keep your eye on Friday’s payroll report from the Department of Labor.


Here is a summary of payroll employment and this week’s interesting little table of data:

June 431,000
April 218,000
March 230,000
February (36,000)
January (26,000)
2009
December (150,000)
November (11,000)
October (111,000)
September (215,000)
August (201,000)
July (304,000)
June (443,000)
May (322,000)
April (504,000)
March (699,000)
February (651,000)
January (655,000)
2008
December (681,000)
November (597,000)
October (423,000)
September (403,000)
August (127,000)
July (67,000)
June (100,000)
May (47,000)
April (67,000)
March (88,000)
February- (83,000)
January- (76,000)


What does all this mean?


The Federal Reserve met last week and as expected they said that they would keep interest rates low are for an “extended period”. What was new and significant in their statement was that they also said “financial conditions have become less supportive of economic growth”.

They had previously been saying “financial market conditions remain supportive of economic growth.”