Saturday, February 25, 2012

The SBA and caitiff



noun: A cowardly and despicable person.
adjective: cowardly, despicable.

Via French from Latin captivus (captive), from capere (to seize).



Don’t be caitiff about commercial real estate.

The CoStar Commercial Repeat Sale Indices (CCRSI) National Composite index ended the fourth quarter of 2011 up 5.5% from its low point in March 2011. 

This month's CCRSI provides the market's first look at December 2011 commercial real estate pricing.   

The CoStar indices are constructed using a repeat sales methodology, widely considered the most accurate measure of price changes for real estate.  If you would like a copy of CoStar’s February 2012 report, let me know.



SBA LIBOR Base Rate February 2011 = 3.26%
SBA Fixed Base Rate February 2011 = 4.72%


504 Debenture Rate for February   

The debenture rate is 2.63% but note rate is 2.68% and effective yield is only 4.711%. 

The effective yield for the temporary debt refinancing available with a 504 loan is 4.91%.



On Wednesday, LEAP DAY, the Bureau of Economic Analysis will release their second or “preliminary” estimate for fourth quarter 2011 GDP.  Their first or “advance” estimate for fourth quarter GDP was an increase of an annual rate of 2.8%.  This was an improvement over the 1.8% third and “final” estimate for third quarter GDP.  

GDP for the third quarter was initially put at 2.5%, with subsequent downward revisions to 2.0% and finally 1.8%.

These revisions to the GDP numbers were caused primarily by inventory changes.

This is worth noting because more than the entire difference between the third quarter growth rate and the fourth quarter growth rate can be explained by the movement in inventories. Inventories subtracted 1.35 percentage points from growth in the third quarter, when they rose at just a $5.5 billion annual rate. Inventories then added 1.95 percentage points to growth in the fourth quarter when they rose at a strong $63.6 billion annual rate.

Unfortunately, this speedup in the rate of inventory accumulation will not continue. In future quarters inventories are likely to grow at a somewhat slower pace.

In the absence of this inventory growth we would have been looking at only a 0.9 percent growth rate in the fourth quarter. 

GDP is market value of all final goods and services produced within the USA where money is used in the transaction.  GDP counts monetary expenditures.  It is designed to count value added so that goods are not counted over and over as they move through the manufacture – wholesale – retail chain.

Consider that GDP includes the costs of suing your neighbor or McDonalds for hot coffee spilled in your lap, or even the replacement of your house if it burns down – yet little of these activities are real economic growth.  GDP does not include home costs (other than new home purchase prices), interest rates, or the money spent buying anything used.

It does not measure wealth, disposable income, or employment.  In short, GDP does not measure the change of the economic environment for you and me.

So what does that mean for job growth this year?

Keep your eyes and ears open for next Friday’s report on jobs for February.

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

January 243,000
December 203,000
November 157,000
October 112,000
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.

We added 157,000 jobs in November, 203,000 in December, and 243,000 in January.  Even with the awful summer of 2011, the economy added 1.95 million jobs in the last 12 months, the best figure in five years. 

This is a better pace of payroll job creation than in 2010, but the economy still has 6.0 million fewer payroll jobs than at the beginning of the 2007 recession. There are a total of 13.1 million Americans unemployed and 5.6 million have been unemployed for more than 6 months.

We still have a way to go before rates will start to really go up.



A caitiff is a contemptible or cowardly person. It’s archaic, so if you say it with a straight face you might even get away with the insult.   It started out, sometime before 1300, to mean a captive.  As captives were not in the best of circumstances, caitiff began to mean a wretched or miserable person. 

The leap day baby Frederic the pirate apprentice in Gilbert and Sullivan's 1879 comic opera The Pirates of Penzance was a caitiff in the original sense of the word.  His apprenticeship indenture stated that he remained legally and morally indentured to the pirates until his 21st birthday.   Frederic was born on February 29th, and so, technically, he only has a birthday each leap year, and so he must serve for another 63 years.

Leap Years are needed to keep our calendar in alignment with the Earth's revolutions around the sun.   Because seasons and astronomical events do not repeat in a whole number of days, a calendar that had the same number of days in each year would, over time, drift with respect to the event it was supposed to track like the winter solstice, vernal equinox, summer solstice and autumnal equinox.  By occasionally inserting an additional day or month into the year, the drift can be corrected.  If we didn't add a day on February 29th nearly every 4 years, we would lose almost six hours every year. After only 100 years, our calendar would be off by approximately 24 days!

Another famous leap day baby was Dickey Pearce.  Dickey played baseball back with the Brooklyn Atlantics in 1856.  Dickey is most famous for introducing his "tricky hit" to baseball, known today as the bunt.

Many people think baseball batters who bunt are caitiffs. 

One of the best bunters in all of baseball is Angel Erick Aybar. 

Last season against the Tigers and the best pitcher in all of baseball Justin Verlander,  Aybar stepped up to the plate.  It was the top of the eighth inning and Verlander had a no-hitter going through seven innings. With his team trailing 3-0,  Aybar dropped down a bunt.   Verlander fielded the bunt but rushed the throw which ended up in right field.  With Verlander rattled, the Angels would go on to score two runs that inning, making it close. 

Aybar attempted quite a few bunts last season.  He 42 attempts were second in the major leagues.  Joining him was Angel center fielder Peter Peter Bourjos who bunted 17 times in 29 attempts for a   .586 batting average.   Their new teammate, Albert Pujols, has attempted a sacrifice bunt just once, on June 16th, 2001.  He also has two career bunt hits, one in 2003 and another in 2004.

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