Sunday, February 5, 2012

The SBA and ululate


UHL-uh-layt, or YOOL-uh-layt

To howl or wail.

From Latin ululare (to howl or shriek) 



Restaurateurs must be happily ululating.

The National Restaurant Association just reported that their Restaurant Performance Index rose to highest level in nearly six years in December.  Building on a solid November performance that saw the strongest same-store sales results in more than four years, restaurant operators reported even better numbers in December.  In addition to positive sales and traffic levels, capital spending activity among restaurant operators continues to trend upward.

Loans to restaurants, both full service and limited service, are the single biggest industry category of SBA borrower.



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


504 Debenture Rate for January 

The debenture rate is 2.76% but note rate is 2.81% and effective yield is only 4.839%. 



Joyful ululation echoed on Friday when the Department of Labor reported that 243,000 jobs were added to start the year off.   
We added 157,000 jobs in November, 203,000 in December, and now 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. 

The Federal Reserve Open Market Committee had just said that they planned to maintain “exceptionally low levels for the federal funds rate at least through late 2014.”

 The federal funds rate dictates short term rates, but what about longer term rates?

After the jobs report on Friday, a drop of more than three points in the price of 30 year bonds pushed yields up as much as 16 basis points to 3.16 percent. 

The 30-year Treasury bond yield finished 2011 at 2.89 percent.   

Keep your eyes on Thursday’s $16 billion auction of 30 year Treasury bonds.

Here is what the 30 year bond has been doing:

2001- 5.49
2002- 5.43
2003- ND
2004- ND
2005- ND
2006- 4.91
2007- 4.84
2008- 4.18
2009- 3.89
2010- 4.61
2011- 2.89

Wait a minute, why no numbers for 2003, 2004, and 2005?

One month after the 9/11 attacks, the Treasury 30 year bond is discontinued. When the Treasury mothballed the 30-year bond in 2001, experts speculated it was trying to drive down long-term interest rates, which had remained stubbornly high while the Federal Reserve was slashing short-term interest rates to revive the economy. When the Treasury discontinued the 30-year bond in 2001, its yield fell 35 basis points in one day. Why? A shrinking supply of the 30-year Treasury bond caused increased demand to drive rates down.

What does all this mean?

I don’t know.

The slope of the yield curve—the difference between the yields on short- and long-term maturity bonds—has achieved some notoriety as a simple forecaster of economic growth.

A flat curve indicates weak growth, and conversely, a steep curve indicates strong growth.

The yield curve is getting a little steeper.

Now that’s something to ululate about.



Ululating about having to work on Super Bowl Monday?

You are not alone as a survey conducted by Harris Interactive for the Workforce Institute at Kronos indicated that 1.5 million people could call in sick and an additional 4.4 million could be late to work the day after the Super Bowl.  According to the latest Bureau of Labor Statistics numbers that just came out on Friday, there are about 141 million employed people in the United States. So, to put those national loss productivity numbers in perspective, just over 4 percent of the American work force won’t be very productive as they are going to either be missing work or dragging through the day.

Hang in there.  Our next holiday is in only two weeks as we observe Washington’s Birthday. 

By the way, officially it is Washington’s Birthday and NOT “President’s Day.” 

In 1968, Congress passed the Uniform Monday Holidays Act, which moved the official observance of Washington's Birthday from February 22nd to the third Monday in February.  An early draft of the Uniform Monday Holiday Act would have renamed the holiday to "Presidents' Day" to honor the birthdays of both Washington and Lincoln, since Lincoln’s is February 12th.  This proposal however failed in committee and the bill as voted on and signed into law on June 28th 1968, kept the name Washington's Birthday.

Not only is Lincoln not getting his due, but Ronald Reagan is also being shortchanged.  His birthday is February 6th. 

Obviously the only equitable way to remedy this grievous oversight is to give each of these great Presidents their own birthday holidays.   Keeping in the spirit of the Uniform Monday Holidays Act, we could celebrate Reagan’s on the first Monday in February, Lincoln’s on the second Monday in February, and George still gets the third Monday.

Now before some prig goes off on exclaiming that would be allowing too much time off for frivolity amongst the hoi polloi, this trifecta of Presidential birthday holidays would be our last hurrah until the brink of summer. 

According to the Federal Reserve, the next federally recognized holiday is not until Memorial Day.  That’s not until the end of May.  Three whole months away; one forth of the year. 

Fortunately Opening Day for baseball is only 57 days from now and pitchers and catchers report for spring training next week.

Now there is something to joyfully ululate about.

1 comment:

  1. Borrow Money No Credit Checks are sort of unsecured loans. These loans are very much easy to derive and can be acquired by applicants with good credit as well as bad credit.