Monday, November 28, 2011

The SBA and corrigible


Capable of being corrected.
From Latin corrigere (to correct).


SBA lending is definitely corrigible.

For 7(a) loans, the 90 percent guarantee and no guarantee fee are once again available. To qualify applicant must be involved in international trade and be located in an area adversely affected by NAFTA based upon job losses and unemployment rate.

A reimbursement of the 504 debenture fee is also available for those applicants located in areas adversely affected by NAFTA.


SBA LIBOR Base Rate November 2011 = 3.25%
SBA Fixed Base Rate November 2011 = 4.95%

504 Debenture Rate for November

The debenture rate is 2.76% but note rate is 2.807% and effective yield is only 4.94%.

For debt refinance with a 504 loan, the effective yield is 5.234%


Corrigible or incorrigible?

47 million people actually lost their jobs in the last twelve months.

That’s not a misprint. Job losses totaled 47 million people in the last twelve months. Fortunately 48.3 million people were also hired in the last twelve months. Doing the math, that means the economy created a net 1.3 million jobs.

Most people don’t understand how vast and complicated our economy is as it’s the net number that makes the headlines.

For example, September reflected “only” 158,000 new jobs. But in reality employers took on 4.25 million workers in September. Through the first ten months of 2011, the economy has added 1.256 million total non-farm jobs or just 125 thousand per month. This is a better pace of payroll job creation than last year, but the economy still has 6.47 million fewer payroll jobs than at the beginning of the 2007 recession.

Keep your eyes opened for Friday’s report on jobs.

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

October 80,000
September 158,000
August 104,000
July 127,000
June 20,000
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.

Don’t be misled by the headlines.

There were only 80,000 jobs added in October. 104,000 private sector jobs were added, and 24,000 government jobs lost. However the change in total employment was revised up for August and September. Gains in the prior two months were revised up by 102,000.

Must ado was made last week that the economy in the U.S. expanded less than previously estimated in the third quarter. Gross domestic product climbed at a 2 percent annual rate from July through September, down from a 2.5 percent prior estimate.

Inventories were a greater drag on the economy last quarter than first estimated. They were cut at an $8.5 billion annual rate, subtracting 1.6 percentage points from growth, compared with a 1.1 percent previous estimate. It was the first time stockpiles were trimmed since the last three months of 2009.

But that is actually good news! Fewer inventories put producers on track to ramp up output heading into the holiday season. Restocking should boost growth by another 0.8 percentage points in the fourth quarter

Be corrigible.


As if Black Friday wasn’t bad enough, today is Cyber Monday.

Millions of otherwise productive working Americans, fresh off a Thanksgiving weekend of window shopping, are returning to high-speed Internet connections at work Monday and buying what they liked. The term “Cyber Monday” was coined based on research showing that 78% of online retailers reported a significant increase in sales on the Monday after Thanksgiving in 2004. In 2006, online spending on Cyber Monday jumped 25% to $608 million, 21% to $733 million in 2007, and 15% to $846 million in 2008. In 2009, online spending increased 5 percent on Cyber Monday to $887 million and that more than half of dollars spent online at US Web sites originated from work computers (52.7 percent). Last year Cyber Monday topped the $1 billion mark.

The whole point of the season seems to have been missed.

In case you have not noticed, the days have been getting shorter and shorter. The sun will rise about a minute later tomorrow and set a minute earlier. In just 24 days, it will be the shortest day of the year, the winter solstice.

Centuries ago in some cultures, elaborate festivals were held on the winter solstice. Alarmed by the colder weather, shorter days with less and less sunlight, and long, dark nights, some were convinced that they had done some terrible wrong and as punishment, the sun was leaving the sky never to return. Large bonfires were lit with rituals held pleading to whatever god they believed in to make the sun return.

These solstice festivals evolved into Christmas as we now know it.

Jesus probably was not even born on December 25th. The reality is that it would have simply been far too cold for shepherds to be out with their sheep at night in Israel. Don’t forget that Mary and Joseph came to Bethlehem to register in a Roman census. Such censuses were not taken in winter, when temperatures often dropped below freezing and roads were in poor condition. Taking a census under such conditions would have been self-defeating.

Only 27 days until Christmas.

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