Sunday, September 23, 2012

The SBA and overslaugh



1. To pass over someone in favor of another, as in a promotion.
2. To bar or to hinder.

From Dutch overslaan (to pass over, omit), from over + slaan (to strike).



The SBA has not been overslaughed.

Congress increased the federal subsidy for Small Business Administration loans in the bill that funds the government for the next six months, a rare case of an agency getting more money than it had this year.

The SBA fared better than most agencies, because Congress increased the subsidy it needs to guarantee loans to small businesses from $210 million this year to $333 million next year.

That means the SBA should be able to back up to $16 billion in loans next year with SBA 7(a) loans.

SBA 7(a) loans can be used for real estate purchase, real estate debt refinance, business debt refinance, business acquisition, working capital, and equipment purchase.



SBA LIBOR Base Rate September 2012 = 3.23%
SBA Fixed Base Rate September 2012 = 4.47%

Debenture Rate for September

The debenture rate is 2.20% but note rate is 2.23936% and effective yield is only 4.279%.



No overslaugh from the Federal Reserve.

At the last Federal Open Market Committee meeting, the Federal Reserve committed to maintaining a highly accommodative monetary policy.

The Federal Reserve also updated its projections of future growth of Gross Domestic Product.

Some people are high-fiving each other now that the Fed is predicting growth of 1.70 to 2.0% this year, and 2.5 to 3.0% next year, which is up from the 1.7% growth recorded in 2011.

This is not something to cheer about.

How bad are we doing? If our economy's projected growth rate doubles to 4% it would still be 30% behind its growth rate from before the recession and half of what it was back in the '80s.

The U.S. economy has never been so sluggish this long into a recovery. The Great Recession officially ended in June 2009.

Keep your eyes and ears open for next week’s final estimate for second quarter GDP.  It was previously estimated at 1.7 percent for the second quarter while the first quarter came in at 2.0 percent.

Here is what GDP has been doing and this week’s interesting little table of data:

2nd quarter 2012:          1.7%
1st quarter 2012:            2.0%
4th quarter 2011:            3.0%
3rd quarter 2011:           1.80%
2nd quarter 2011:           1.30%
1st quarter 2011:             0.4%
4th quarter 2010:           3.1%
3rd quarter 2010:           2.6%
2nd quarter 2010:          1.7%
1st quarter 2010:            3.7%
4th quarter 2009:           5.6%
3rd quarter 2009:          2.2%
2nd quarter 2009:          (0.7)%
1st quarter 2009:            (6.4)%

What does this mean?

I don’t know.

Enhancements to the SBA 7(a) loan program in 2009 caused the volume of SBA 7(a) loans to increase significantly.

With increases in SBA 7(a) loan approvals, the economy soon recovered

The prescience nature of SBA 7(a) loan volume with respect to the gross domestic product leads one to the inevitable conclusion that SBA 7(a) loans contribute positively to gross domestic product.

Just for fun I calculated the correlation coefficient between SBA 7(a) loan volume and GDP for six years using the Microsoft CORREL function.  It came out to a statistically significant 0.86.

It’s our patriotic duty to not overslaugh SBA loans.



The relentless march of the seasons can not be overslaughed.  Summer has ended. 

And now Adam Dunn may be overslaughed by Miguel Cabrera.

As the season comes to end, Dunn has a chance to do what no hitter has done in 85 years.    The last player to lead all of baseball with the most home runs, the most walks and the most strikeouts was Babe Ruth in 1927.

Dunn easily leads with the most strikeouts and walks this season.  He is three home runs off the leader’s pace.

Leading the pack right now for the most home runs in baseball is Miguel Cabrera of the Detroit Tigers.  Cabrera also leads the American League with the highest batting average and most runs batted in.    Should he end up leading the league in home runs, batting average, and runs batted in, he will earn batting’s Triple Crown.

  The last Triple Crown winner was Carl Yastrzemski of the Boston Red Sox in 1967. 

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