Monday, September 26, 2011

The SBA and vade mecum

vade mecum

VAY/VAH-dee MEE/MAY-kuhm

A book for ready reference, such as a manual or guidebook.

From Latin vade mecum (go with me), from vadere (to go) + me (me) + cum (with).


The vade mecum for SBA loans is the SOP- Standard Operating Procedures.

SBA has once again re-written its SOP. These changes in the rules will be effective on October 1st.

One of the changes is that SBA lenders selling OREO are no longer limited to the liquidation value or their cost in the property.

Both SBA 504 and 7(a) loans offer high loan to value financing for owner-user real estate.
SBA LIBOR Base Rate September 2011 = 3.22%
SBA Fixed Base Rate September 2011 = 4.99%

504 Debenture Rate for September

The debenture rate is 2.85% but note rate is 2.89% and effective yield is only 4.709%.


The Federal Reserve doesn’t really have a vade mecum. Or does it?

With short term interest rates as low as they can go, the Federal Open Market Committee announced last week that it wanted to push down longer term rates by buying more longer term Treasuries.

The Fed would mimic a policy in 1961 known as “Operation Twist” for its goal of bending the yield curve.

While Fed staff called it Operation Nudge, it became known as Operation Twist, after Chubby Checker’s hit, The Twist.

The bond market began dancing almost immediately after the Fed announcement as the 30 year Treasury bond dropped 45 basis points last week, the most since the midst of the global financial crisis in December 2008.

The Fed also left unchanged its pledge to keep the benchmark interest rate near zero through at least mid-2013. The central bank has kept the target federal funds rate for overnight interbank loans in a range of zero to 0.25 percent since December 2008.

So what happens after 2013?

Eurodollar futures settle at a three- month lending rate that has averaged about 22 basis points more than the Fed's target over the past 10 years. Here is a summary of what the market expects for Eurodollar futures based upon the pit-traded prices at the Chicago Mercantile Exchange:

DEC11- 0.55
DEC12- 0.53
DEC13- 0.79
DEC14- 1.50
DEC15- 2.17
DEC16- 2.64
DEC17- 2.94
DEC18- 3.10

What does all this mean?

I don’t know.

It would appear that interest rates will remain low for an extended period.


The vade mecum for anyone who likes baseball is

If you check it out, you will discover that only two players--Jose Bautista and Curtis Granderson--will hit 40 home runs this season. Three other players--Albert Pujols, Matt Kemp and Mark Teixeira--are close with a handful of games to play.

Way back when, it used to be impressive get 40 homers in a season. But then things got crazy and 40-home run hitters became commonplace.

Now, it's back to the future time. For the third time in the last four years, we're going to have only two guys break the 40-homer barrier.

Many people might think it’s because steroids are out of baseball.

It’s actually because Jose Lima died. In 2000, Lima gave up a National League record 48 home runs.

Now Cincinnati Reds pitcher Bronson Arroyo is challenging Lima Time.

Arroyo has served up 44 dingers this season.

Bronson’s 2.18 homers per nine innings is the second-highest mark ever among pitchers who qualified for the ERA title, according to Baseball Reference. Only the late Jose Lima (2.20 per nine in 2000) got taken deep more often.

Jose’s birthday by the way is this Friday, September 30th. He would have been 38 years old.

No comments:

Post a Comment