Monday, August 29, 2011

The SBA and esurient


Hungry; greedy.
From Latin esurire (to be hungry), from edere (to eat).


Esurient buyers of commercial real estate will be disappointed if they think recessionary bargains still abound.

According to the Moody’s/Real Commercial Property Price Index, commercial real estate prices rose another 0.9 percent in June. This is the second month in a row that prices have gained. This index measures the change in actual transaction prices for commercial real estate based on the repeat-sales of the same assets at different points in time.

Most notably, prices of industrial buildings in the Western United States are only 5.5% below the peak which occurred in the fourth quarter of 2007. Industrial prices in the West have rebounded 29.5% since their post peak low in third quarter of 2009.

If you would like a copy of the Moody’s August 2011 special report on the Moody’s/Real Commercial Property Price Index, let me know.

SBA LIBOR Base Rate August 2011 = 3.19%
SBA Fixed Base Rate August 2011 = 5.41%

504 Debenture Rate for August
The debenture rate is 3.29% but note rate is 3.34% and effective yield is only 5.142%.
Note that the effective yield for debt refinance under the 504 program is slightly higher.
It is now 5.501%.


Esurience in the jobs market?

The number of people continuing to receive jobless benefits dropped by 80,000 in the week ended August 13th to 3.64 million. This is the fewest since September 2008. This continuing claims figure does not include the number of Americans receiving extended benefits under federal programs. Extended benefits and emergency payments recipients total another 3.64 million. The number recently decreased by about 20,400.

Add those two numbers together and you get just OVER 7 million people receiving some form of jobless benefit. The economy still has just UNDER 7 million fewer payroll jobs than at the beginning of the 2007 recession.

On the Friday before the long weekend celebrating LABOR will be the 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:

July 117,000
June 46,000
May 25,000
April 232,000
March 194,000
February 235,000
January 68,000
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.

Payroll increases of around 125,000 a month are needed to keep the unemployment rate steady, while about 200,000 a month would bring it down a percentage point over a year. Through the first six months of 2011, the economy has added 757,000 total non-farm jobs or just 126,000 per month.

Interest rates will continue to remain low for an extended period.



Monday is Labor Day.

For many people, this marks the end of summer.

In high society, Labor Day is considered the last day of the year when it is fashionable to wear white. The post–Labor Day moratorium on white clothing and accessories has long ranked among etiquette hard-liners' most sacred rules.

So then if white is out, what color works?

Success has a color, and the color is red. In fact, a recent study confirms previous reports that athletes wearing red uniforms win competitions more often than opponents dressed in other colors.

When opponents of a game are equally matched, the team dressed in red is more likely to win.

British anthropologists Russell Hill and Robert Barton of the University of Durham reached that conclusion by studying the outcomes of one-on-one boxing, tae kwon do, Greco-Roman-wresting, and freestyle-wrestling matches at the 2004 Summer Olympics in Athens, Greece. In each event Olympic staff randomly assigned red or blue clothing or body protection to competitors. When otherwise equally matched with their opponent in fitness and skill, athletes wearing red were more likely to win the bout. In equally matched bouts, the preponderance of red wins was great enough that it could not be attributed to chance, the anthropologists say.

The advantage of red may be intuitively known, judging from the prevalence of red uniforms in sports.

In 2002 the Angels changed from their dark blue and periwinkle to their current red. They ended up winning the World Series that year.

In 2006, the Diamondbacks ditched the purple, teal and copper for Sedona red. The Diamondbacks are now four games up in the NL West with 28 games left.

So it is the change to red that is helping the Diamondbacks? Arizona has rallied behind its starting pitching- mainly Ian Kennedy. Kennedy has been on a roll, allowing no more than three runs in his previous nine starts while moving toward the top of the NL Cy Young favorites list. And now the Diamondback’s pitching is about to get better once Trevor Bauer is called up from the minor leagues. Trevor was the best pitcher in all of college baseball this year for UCLA. In just 15 innings of pitching for the minor league AA Baybears he has struck out 23 batters. At UCLA he had 460 career strikeouts. His career strikeout total ranks second on the Pac-10 list behind Tim Lincecum, who had 491 strikeouts for Washington from 2004-06.

Trevor’s UCLA Bruins team color is a baby blue. It does not strike fear into opponents like red does. It may just lull them to sleep. But if opponents are caught flatfooted this year, the UCLA Bruin football pistol offense just might work. Their first game is this Saturday against Houston.

Color probably doesn’t really matter. Usually the esurient team wins.

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