Monday, February 28, 2011

The SBA and meticulous

Extremely careful, precise, or thorough.
From Latin meticulosus (fearful), from metus (fear). Originally the term meant one who was fearful and eventually it acquired a positive sense.
Be meticulous about 504 debt refinance.

Starting TODAY, SBA is accepting applications to refinance mortgage debt with a 504 loan.
The debt to be refinanced must be coming due before December 31, 2012.
Borrowers can refinance up to 90 percent of the current appraised property value or 100 percent of the outstanding mortgage, whichever is lower.
Loan proceeds may NOT be used for any other business expenses such as working capital.
There will also be an ongoing guarantee fee of 1.043% on the total unpaid balance of the debenture that increases the effective yield to the borrower.

If a borrower is unable to refinance their mortgage debt with a SBA 504 loan, a SBA 7(a) loan may be a viable option.
SBA LIBOR Base Rate February 2011 = 3.26%
SBA Fixed Base Rate February 2011 = 6.16%
504 Debenture Rate for February
The debenture rate is 4.22% but note rate is 4.285% and effective yield is only 6.071%.
How meticulous are bond investors?

The yield curve has dipped down a little bit.
The 30 year Treasury bond is down to 4.50% which is the lowest it has been in a month.
Many attribute the drop in longer term rates to the unrest in Libya driving investors to the safety of our government debt and concerns that surging oil prices may stall the economy.
Lost in the headlines was the news that the capacity utilization rate dipped last month. Job growth also stalled in January.

Keep your eye on Friday’s payroll report from the Department of Labor.
Here is a summary of net monthly payroll employment and this week’s interesting little table of data:
January 36,000
December 121,000
November 93,000
October 210,000
September (41,000)
August (1,000)
July (66,000)
June (175,000)
May 431,000
April 218,000
March 230,000
February (36,000)
January (26,000)
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)
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?

I don’t know.
For all of 2010, about 1.1 million jobs were created, the most since 2006.
That’s a start, but we’ve got a long ways to go.
There are still over 7 million fewer jobs in the U.S. compared to the peak of employment in 2007.
If the U.S. economy adds 200,000 jobs per month, it will take 3 years to get back to the previous peak. And that doesn't include jobs needed to offset population growth (about 125,000 jobs per month).

The Federal Open Market Committee meets again March 15th. How meticulous will they be?
Did you enjoy last Monday’s holiday?
Our next three day weekend is not until Memorial Day. That’s 92 days away.
If you check out the calendar it turns out that this is the longest streak of the year we have to go without a break from the five day grind.

Was it this long lull that inspired Ferris Bueller to take his famous day off?
Meticulous observation of “Ferris Bueller’s Day Off” reveals that his day off was actually June 5th, 1985.
How does one figure that out?

On Ferris's agenda that afternoon was, naturally, a trip to Wrigley Field.
On the screen we see Chicago first-baseman #10 holding on an Atlanta Braves player wearing #18. The announcer pipes in: "Runner on first base, nobody out. That's the first hit they've had since the fifth inning, and only the fourth hit in the game."
Chicago pitcher #46 throws the pitch to a left-handed Atlanta hitter with a two-digit number ending in "5" and what appears to be a long last name. The batter swings at the pitch and hits a long fly ball to left. "That's a drive! Left field... twisting... and into foul territory."
The Chicago leftfielder races for the ball but it screams foul, into Ferris' hand.
The movie "Ferris Bueller's Day Off" was released on June 11, 1986. The ballgame then must have been filmed either real early in the 1986 season or sometime during 1985. Looking at all the box scores from those seasons, we see that there was no game in 1986 in which Lee Smith (#46) faced the Braves at Wrigley Field. There were four such games in '85, though Smith left the Braves hitless in one of those. Of the remaining three games, it isn't hard to find the game we're looking for.
The foul ball that Ferris caught was hit by Atlanta rightfielder Claudell Washington (#15) in the top of the 11th inning. The game was tied at two and backup second-baseman Paul Zuvella (#18) was being held on first by Leon Durham (#10) after a leadoff single (the fourth hit of the game, and Atlanta's first hit since the fifth). Washington would end his at-bat with a flyball to leftfielder Davey Lopes. The next batter, Rafael Ramirez, would wind up hitting a two-run home run and the Braves would go on to win 4-2.

Only 30 days until Opening Day. Maybe that should be a holiday.

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