obdurate
(OB-doo-rit)
1. Stubborn: not easily moved.
2. Hard-hearted: resistant to emotions.
From Latin obdurare (to harden), from durus (hard).
_______________________________________
TIP OF THE WEEK
Don't go thinking the recovery in commercial real estate is being obdurate.
Last week the Moody’s/REAL Commercial Property Price Index dropped 4.2 percent from February and is now 47 percent below the peak of October 2007. The national index has fallen for four straight months as sales of distressed properties hurt real estate values.
The national index however hides what’s happening in some markets. According to Moody’s the property type with the largest increase in prices in the West was industrial, where prices rose 4.7% in the past quarter. Western industrial prices are only 7.3% below the peak which occurred in the fourth quarter of 2007.
Many industrial properties are owner-user making them perfect candidates for SBA financing.
_______________________________________
Indices:
PRIME RATE= 3.25%
SBA LIBOR Base Rate May 2011 = 3.21%
SBA Fixed Base Rate May 2011 = 5.96%
________________________________________________
504 Debenture Rate for May
The debenture rate is 3.79% but note rate is 3.85% and effective yield is only 5.639%.
________________________________________________
AHEAD OF THE YIELD CURVE
Job creation is the obdurate obstacle to economic recovery.
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:
April 244,000
March 221,000
February 235,000
January 68,000
2010
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)
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?
I don’t know.
So far the economy has added 854,000 private sector jobs this year, or 213,500 per month.
This is a much better pace of payroll job creation than last year, but the economy still has 6.955 million fewer payroll jobs than at the beginning of the 2007 recession. At this pace, it will take 3 years just to get back to the pre-recession level, or sometime in 2014!
That means interest rates, especially variable rates, will remain low for awhile.
______________________________________________
OFF BASE
Many people think today marks the beginning of summer but we’ve actually got 22 more days until the first day of summer.
For many baseball teams however, their summer is already over.
The average correlation between a team's win percentage on June 1 and its final winning percentage is 0.76. How high is a 0.76 correlation? Statisticians consider 0.7 a "significant" correlation and 0.8 a "strong" one. These are on a scale where 1.0 represents a direct statistical relationship and 0 represents no relation at all.
Right now, Armando Galarraga’s Diamondbacks are in first place. When Armando last pitched for the Diamondbacks, they were in last place. Against the Padres he only lasted five innings while allowing eight runs. The Diamondbacks then sent him down to the minor leagues and they have since won 14 out of their last 16 games. Sunday Armando made his pitching debut for the Reno Aces and allowed six hits and five walks in five innings. The only run he allowed was of course a home run.
Tuesday, May 31, 2011
Wednesday, May 25, 2011
SBA 7(a) Weekly Lending Update
SBA 7(a) loans approvals bumped up to $270,991,000 for the week ending May 20th. That brings the year to date total to $13,944,325,000.
There are 18 weeks left in the SBA's fiscal year and only $3,555,675,000 remaining for the SBA 7(a) program. That less than $200 million per week.
There are 18 weeks left in the SBA's fiscal year and only $3,555,675,000 remaining for the SBA 7(a) program. That less than $200 million per week.
Friday, May 20, 2011
SBA Turn Around Time
For those of you who think you should only work with a PLP lender, you are mistaken. We recently assisted a lender in submitting a deal to SBA through the Guaranty Loan Processing Center and obtained our approval in less than a week.
For start to finish it was actually four days.
For start to finish it was actually four days.
Thursday, May 19, 2011
The SBA and self-storage
SBA loans are well suited for self-storage facilities.
According to the Self Storage Association, there are 2.21 billion square feet of self-storage in this country. That means there are more than 7 square feet of storage per U.S. resident.
You might want to check out this article from Inc. magazine:
http://www.inc.com/best-industries-2010/self-storage-and-mini-storage-leasing-industry.html
According to the Self Storage Association, there are 2.21 billion square feet of self-storage in this country. That means there are more than 7 square feet of storage per U.S. resident.
You might want to check out this article from Inc. magazine:
http://www.inc.com/best-industries-2010/self-storage-and-mini-storage-leasing-industry.html
Wednesday, May 18, 2011
SBA 7(a) Weekly Lending Update
Another $250,053,000 in SBA 7(a) loans were approved for the week ending May 13th. That brings the year to date total to $13,673,334,000. $17,500,000,000 has been appropriated for the fiscal year which ends September 30th. That 19 weeks away which means the 7(a) program could run out of money before the year ends.
Monday, May 16, 2011
The SBA and macerate
macerate
(MAS-uh-rayt)
1. To soften by soaking or steeping in a liquid.
2. To separate into parts by soaking.
3. To weaken or to become thin; to emaciate.
From Latin macerare (to make soft, weaken).
_____________________________________________________
TIP OF THE WEEK
Community banking has been macerated. Economic and market shifts have also macerated commercial real estate. The boom of the last decade is gone.
Un-macerated are SBA loans.
The May issue of the CB Journal takes a look at community banking, real estate, and how SBA loans have changed in a big way.
For a copy of this month’s issue, go here: http://cb-resource.com/CBJournal/04CBJournal_May11.pdf
_______________________________________
Indices:
PRIME RATE= 3.25%
SBA LIBOR Base Rate May 2011 = 3.21%
SBA Fixed Base Rate May 2011 = 5.96%
________________________________________________
504 Debenture Rate for May
The debenture rate is 3.79% but note rate is 3.85% and effective yield is only 5.639%.
________________________________________________
AHEAD OF THE YIELD CURVE
The government had to borrow another $72 billion last week to keep paying for all the wonderful things they are doing to us.
Included in all that borrowing was $16 billion in 30 year bonds that sold at a yield of 4.35 percent. The yield touched 4.25 percent on May 5, the lowest level since December 7, after rising to 4.79 percent on Feb. 9. Last month’s auction drew a yield of 4.531 percent.
This dip in the yield curve coincides with a dip in the Ceridian-UCLA Pulse of Commerce Index. This index is based on real-time diesel fuel consumption data for over the road trucking and serves as an indicator of the state and possible future direction of the U.S. economy. By tracking the volume and location of fuel being purchased, the index closely monitors the over the road movement of raw materials, goods-in-process and finished goods to U.S. factories, retailers and consumers. It fell 0.5 percent in April.
The Ceridian-UCLA Pulse of Commerce Index tends to lead industrial production which in turn dictates capacity utilization rates.
The capacity utilization rate, which measures how much plants and factories are being used, has been steadily climbing since reaching a historic low in August of 2009 of only 68.2%.
Keep your eye on Tuesday's release from the Federal Reserve on Industrial Production and Capacity Utilization.
Here is what capacity utilization rates have done:
1997- 83.6
1998- 83.0
1999- 82.4
2000- 82.6
2001- 77.4
2002- 75.6
2003- 74.6
2004- 79.2
2005- 80.7
2006- 82.4
2007- 81.5
2008- 79.9
2009- 69.9
2010- 74.8
2011- 77.4
What does all this mean?
I don't know.
Last month, the rate of capacity utilization for total industry rose 0.5 percentage point to 77.4 percent, a rate 3.0 percentage points below its average from 1972 to 2010. In December it was at 76.3 percent.
One of the Federal Reserve’s favorite gauges of the economy is the capacity utilization rate. The Federal Reserve watches capacity utilization rates to see if production constraints are threatening to cause inflationary pressures. Bottlenecks or shortages often lead to inflationary pressures that would drive prices even higher. Several analysts have pointed to a rate between 81% and 82% as a tipping point over which inflation is spurred.
Capacity utilization at 77.4% is still far below normal - and well below the pre-recession levels of 81.2% in November 2007.
That means we still have a long way to go before interest rates really start to go up.
______________________________________________
OFF BASE
In case you haven’t heard, the world is supposed to end this Saturday.
May 21st is being heralded as Judgment Day--the time when the earth will be destroyed due to mankind's sins. The guy making this prediction had previously said that the world would end on September 6, 1994. The world did not end on that day evidently due to a mathematical error.
May 21st is also the birthday of Monty Stratton. He would have been 99 years old. Stratton pitched for the Chicago White Sox in late 1930’s and was recognized as one of the top pitchers in the American League. However, a freak hunting accident caused Monty’s right leg to be amputated. Throughout the early- and mid-1940s, Stratton attempted to come back from his injury, pitching in the minors while hopping around on a crude wooden leg. His return to baseball encountered difficulties because other teams persistently bunted balls out of his reach, but Stratton finally was able to make a successful comeback, winning 18 games with the Class-C Sherman Twins of the East Texas League. His comeback attempt was the subject of the 1949 film The Stratton Story which starred Jimmy Stewart.
Pitching on two perfectly good legs still is Arizona Diamondback Armando Galarraga. Armando gave up another home run last Wednesday against the Giants and now has allowed 12 home runs over only 37 2/3 innings. At this rate Armando has an excellent shot of setting a new record for home runs allowed by a pitcher in a single season. He pitches again tonight against the Padres.
(MAS-uh-rayt)
1. To soften by soaking or steeping in a liquid.
2. To separate into parts by soaking.
3. To weaken or to become thin; to emaciate.
From Latin macerare (to make soft, weaken).
_____________________________________________________
TIP OF THE WEEK
Community banking has been macerated. Economic and market shifts have also macerated commercial real estate. The boom of the last decade is gone.
Un-macerated are SBA loans.
The May issue of the CB Journal takes a look at community banking, real estate, and how SBA loans have changed in a big way.
For a copy of this month’s issue, go here: http://cb-resource.com/CBJournal/04CBJournal_May11.pdf
_______________________________________
Indices:
PRIME RATE= 3.25%
SBA LIBOR Base Rate May 2011 = 3.21%
SBA Fixed Base Rate May 2011 = 5.96%
________________________________________________
504 Debenture Rate for May
The debenture rate is 3.79% but note rate is 3.85% and effective yield is only 5.639%.
________________________________________________
AHEAD OF THE YIELD CURVE
The government had to borrow another $72 billion last week to keep paying for all the wonderful things they are doing to us.
Included in all that borrowing was $16 billion in 30 year bonds that sold at a yield of 4.35 percent. The yield touched 4.25 percent on May 5, the lowest level since December 7, after rising to 4.79 percent on Feb. 9. Last month’s auction drew a yield of 4.531 percent.
This dip in the yield curve coincides with a dip in the Ceridian-UCLA Pulse of Commerce Index. This index is based on real-time diesel fuel consumption data for over the road trucking and serves as an indicator of the state and possible future direction of the U.S. economy. By tracking the volume and location of fuel being purchased, the index closely monitors the over the road movement of raw materials, goods-in-process and finished goods to U.S. factories, retailers and consumers. It fell 0.5 percent in April.
The Ceridian-UCLA Pulse of Commerce Index tends to lead industrial production which in turn dictates capacity utilization rates.
The capacity utilization rate, which measures how much plants and factories are being used, has been steadily climbing since reaching a historic low in August of 2009 of only 68.2%.
Keep your eye on Tuesday's release from the Federal Reserve on Industrial Production and Capacity Utilization.
Here is what capacity utilization rates have done:
1997- 83.6
1998- 83.0
1999- 82.4
2000- 82.6
2001- 77.4
2002- 75.6
2003- 74.6
2004- 79.2
2005- 80.7
2006- 82.4
2007- 81.5
2008- 79.9
2009- 69.9
2010- 74.8
2011- 77.4
What does all this mean?
I don't know.
Last month, the rate of capacity utilization for total industry rose 0.5 percentage point to 77.4 percent, a rate 3.0 percentage points below its average from 1972 to 2010. In December it was at 76.3 percent.
One of the Federal Reserve’s favorite gauges of the economy is the capacity utilization rate. The Federal Reserve watches capacity utilization rates to see if production constraints are threatening to cause inflationary pressures. Bottlenecks or shortages often lead to inflationary pressures that would drive prices even higher. Several analysts have pointed to a rate between 81% and 82% as a tipping point over which inflation is spurred.
Capacity utilization at 77.4% is still far below normal - and well below the pre-recession levels of 81.2% in November 2007.
That means we still have a long way to go before interest rates really start to go up.
______________________________________________
OFF BASE
In case you haven’t heard, the world is supposed to end this Saturday.
May 21st is being heralded as Judgment Day--the time when the earth will be destroyed due to mankind's sins. The guy making this prediction had previously said that the world would end on September 6, 1994. The world did not end on that day evidently due to a mathematical error.
May 21st is also the birthday of Monty Stratton. He would have been 99 years old. Stratton pitched for the Chicago White Sox in late 1930’s and was recognized as one of the top pitchers in the American League. However, a freak hunting accident caused Monty’s right leg to be amputated. Throughout the early- and mid-1940s, Stratton attempted to come back from his injury, pitching in the minors while hopping around on a crude wooden leg. His return to baseball encountered difficulties because other teams persistently bunted balls out of his reach, but Stratton finally was able to make a successful comeback, winning 18 games with the Class-C Sherman Twins of the East Texas League. His comeback attempt was the subject of the 1949 film The Stratton Story which starred Jimmy Stewart.
Pitching on two perfectly good legs still is Arizona Diamondback Armando Galarraga. Armando gave up another home run last Wednesday against the Giants and now has allowed 12 home runs over only 37 2/3 innings. At this rate Armando has an excellent shot of setting a new record for home runs allowed by a pitcher in a single season. He pitches again tonight against the Padres.
Wednesday, May 11, 2011
SBA 7(a) Weekly Lending Update
SBA loan activity jumped up a little bit. Another $260,154,000 in SBA 7(a) loans were approved for the week ending May 6th.
That leaves only $4,076,719,000 left in the program until the fiscal year ends on September 30th. That's 20 weeks away meaning loan approvals would have to average $203,836,000 per week to last.
That leaves only $4,076,719,000 left in the program until the fiscal year ends on September 30th. That's 20 weeks away meaning loan approvals would have to average $203,836,000 per week to last.
Monday, May 9, 2011
SBA 7(a) Rate Update
Indices:
PRIME RATE= 3.25%
SBA LIBOR Base Rate May 2011 = 3.21%
SBA Fixed Base Rate May 2011 = 5.96%
Lenders can charge up to 2.75% over these indices
PRIME RATE= 3.25%
SBA LIBOR Base Rate May 2011 = 3.21%
SBA Fixed Base Rate May 2011 = 5.96%
Lenders can charge up to 2.75% over these indices
Wednesday, May 4, 2011
SBA 7(a) Weekly Lending Update
Is the SBA 7(a) loan program going to run out of money?
Another $234,146,000 in SBA 7(a) loans were approved during the week ending April 29th. That brings the year to date total to $13,163,127,000. A total of $17,500,000,000 in SBA 7(a) loans are authorized for the fiscal year which ends September 30th.
That leaves us with $4,336,873,000 remaining. With 21 weeks left in the fiscal year loan approvals need to average $206,517,760 per week or the SBA runs out of money.
Another $234,146,000 in SBA 7(a) loans were approved during the week ending April 29th. That brings the year to date total to $13,163,127,000. A total of $17,500,000,000 in SBA 7(a) loans are authorized for the fiscal year which ends September 30th.
That leaves us with $4,336,873,000 remaining. With 21 weeks left in the fiscal year loan approvals need to average $206,517,760 per week or the SBA runs out of money.
Monday, May 2, 2011
The SBA and sisyphean
Sisyphean
(sis-ee-FEE-uhn)
Endlessly laborious and fruitless.
Sisyphus, a king in Greek mythology was cursed to push a huge boulder to the top of a hill, only to watch it roll back down and to repeat this forever.
____________________________________________
TIP OF THE WEEK
The sisyphean struggle with commercial real estate presents opportunities for both buyers and lenders.
Moody's reported last week that the Moody’s/REAL All Property Type Aggregate Index declined 3.3% in February and 4.9 percent from a year earlier. According to Moody's, CRE prices are down 4.9% from a year ago and down about 44.7% from the peak in 2007. Prices are just above the post-bubble low last August - and about at the levels of 2002.
If you would like a copy of Moody’s April 2011 report, let me know.
Either a SBA 504 loan or 7(a) loan can be used for the purchase or refinance of owner-user commercial real estate.
_________________________________
Indices:
PRIME RATE= 3.25%
SBA LIBOR Base Rate April 2011 = 3.24%
SBA Fixed Base Rate April 2011 = 6.24%
___________________________________
504 Debenture Rate for April
The debenture rate is 4.05% but note rate is 4.11% and effective yield is only 5.90%.
______________________________________
AHEAD OF THE YIELD CURVE
Economic recovery plods along with a Sisyphean pace.
Our economy grew slower in the first quarter as government spending declined by the most since 1983. Gross domestic product rose at a 1.8 percent annual rate from January through March after a 3.1 percent pace in the last three months of 2010, the Commerce Department reported last week.
Has the rock rolled back down the hill with employment?
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:
March 216,000
February 194,000
January 68,000
2010
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)
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?
I don’t know.
After meeting for two days, the Federal Reserve last week left its benchmark interest rate in a range of zero to 0.25 percent, where it’s been since December 2008, and retained a pledge in place since March 2009 to keep it “exceptionally low” for an “extended period.”
That’s because as they said “the unemployment rate remains elevated”
The likelihood policy makers will raise the target rate for the federal funds rate at their March 2012 meeting decreased to 44 percent, from 61 percent a month ago, Fed funds futures showed.
______________________________________
OFF BASE
Sisyphus probably needed a hug every time the rock rolled back down the hill.
According to the Hugs for Health Foundation, everybody needs a hug. They believe hugging nurtures the human spirit and is healthy for both the hugger and hugged.
This week is the Hugs for Health Foundation’s National Hug Holiday Week.
Better than a hug is a prayer.
Thursday is the National Day of Prayer.
Needing both a hug and a prayer is probably pitcher Armando Galarraga of the Diamondbacks. Friday he pitched seven innings and gave up only six hits. Three of those hits were home runs however and the Diamondbacks lost 4 -2. Galarraga has now allowed 11 homers in 28 innings. At this rate, Armando has an excellent shot of breaking Jose Lima’s record for allowing 48 home runs in the National League in a season. This is also Jose’s first year of eligibility for entering into the Baseball Hall of Fame. He doesn’t have a prayer.
Life is short, pray hard.
(sis-ee-FEE-uhn)
Endlessly laborious and fruitless.
Sisyphus, a king in Greek mythology was cursed to push a huge boulder to the top of a hill, only to watch it roll back down and to repeat this forever.
____________________________________________
TIP OF THE WEEK
The sisyphean struggle with commercial real estate presents opportunities for both buyers and lenders.
Moody's reported last week that the Moody’s/REAL All Property Type Aggregate Index declined 3.3% in February and 4.9 percent from a year earlier. According to Moody's, CRE prices are down 4.9% from a year ago and down about 44.7% from the peak in 2007. Prices are just above the post-bubble low last August - and about at the levels of 2002.
If you would like a copy of Moody’s April 2011 report, let me know.
Either a SBA 504 loan or 7(a) loan can be used for the purchase or refinance of owner-user commercial real estate.
_________________________________
Indices:
PRIME RATE= 3.25%
SBA LIBOR Base Rate April 2011 = 3.24%
SBA Fixed Base Rate April 2011 = 6.24%
___________________________________
504 Debenture Rate for April
The debenture rate is 4.05% but note rate is 4.11% and effective yield is only 5.90%.
______________________________________
AHEAD OF THE YIELD CURVE
Economic recovery plods along with a Sisyphean pace.
Our economy grew slower in the first quarter as government spending declined by the most since 1983. Gross domestic product rose at a 1.8 percent annual rate from January through March after a 3.1 percent pace in the last three months of 2010, the Commerce Department reported last week.
Has the rock rolled back down the hill with employment?
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:
March 216,000
February 194,000
January 68,000
2010
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)
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?
I don’t know.
After meeting for two days, the Federal Reserve last week left its benchmark interest rate in a range of zero to 0.25 percent, where it’s been since December 2008, and retained a pledge in place since March 2009 to keep it “exceptionally low” for an “extended period.”
That’s because as they said “the unemployment rate remains elevated”
The likelihood policy makers will raise the target rate for the federal funds rate at their March 2012 meeting decreased to 44 percent, from 61 percent a month ago, Fed funds futures showed.
______________________________________
OFF BASE
Sisyphus probably needed a hug every time the rock rolled back down the hill.
According to the Hugs for Health Foundation, everybody needs a hug. They believe hugging nurtures the human spirit and is healthy for both the hugger and hugged.
This week is the Hugs for Health Foundation’s National Hug Holiday Week.
Better than a hug is a prayer.
Thursday is the National Day of Prayer.
Needing both a hug and a prayer is probably pitcher Armando Galarraga of the Diamondbacks. Friday he pitched seven innings and gave up only six hits. Three of those hits were home runs however and the Diamondbacks lost 4 -2. Galarraga has now allowed 11 homers in 28 innings. At this rate, Armando has an excellent shot of breaking Jose Lima’s record for allowing 48 home runs in the National League in a season. This is also Jose’s first year of eligibility for entering into the Baseball Hall of Fame. He doesn’t have a prayer.
Life is short, pray hard.
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