Friday, June 28, 2013

SBA loans are good for the economy

SBA 7(a) loan approvals totaled $361,478,000 for the week ending June 21st.  

That’s two solid weeks of SBA 7(a) loan volume that puts us on pace to beat the 1st quarter of 2013.

This bodes well for economic growth moving forward.

Remember, SBA 7(a) loan volume is a leading economic indicator as the correlation coefficient between SBA 7(a) loan volume and GDP is a statistically significant 0.86.



Tuesday, June 25, 2013

SBA Loans Are Good for the Economy

SBA 7(a) loan approvals totaled $362,297,000 for the week ending June 14th.  

This is a nice little jump from the prior week when SBA approved $300,328,000 in SBA 7(a) loans.

SBA 7(a) loan volume is a leading economic indicator as the correlation coefficient between SBA 7(a) loan volume and GDP is a statistically significant 0.86.





Monday, June 17, 2013

The SBA and temerarious

temerarious

tem-uh-RAR-ee-uhs

Presumptuously or recklessly daring or bold.

From Latin temere (rashly).
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TIP OF THE WEEK 

The SBA might be getting a little temerarious.

A draft of its Standard Operating Procedures will be released soon. 

Significant changes to personal liquidity, affiliations and collateral requirements have already been announced.

This new SOP will take effect October 1, 2013.
_____________________________________

Indices:

PRIME RATE= 3.25%
SBA LIBOR Base Rate June 2013 = 3.19%
SBA Fixed Base Rate June 2013 = 4.96%
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Debenture Rate for June    

The debenture rate is 2.45% but note rate is 2.49% and effective yield is only 4.529%.

 ________________________________________________

AHEAD OF THE YIELD CURVE 
The Federal Reserve meets this week and they won’t be temerarious.

The unemployment rate is at 7.6% and inflation is falling.

Inflation is falling?   

Tuesday the consumer price index will be released for the month of May.  Last month, Consumer prices climbed 1.1 percent in the 12 months through April, according to a measure watched by the Fed that excludes food and fuel -- matching the smallest increase since records began in 1960. That’s down from 1.9 percent in the year ended April 2012.

On Friday it was reported that capacity utilization for total industry edged down 0.1 percentage point to 77.6 percent.  This is the second consecutive monthly decline.  The capacity utilization rate, which measures how much plants and factories are being used, is one of the Federal Reserve’s favorite gauges of the economy.  The Federal Reserve watches capacity utilization rates to see if production constraints are threatening to cause inflationary pressures. Bottlenecks or shortages often lead to inflationary pressures that would drive prices even higher.   Several analysts have pointed to a rate between 81% and 82% as a tipping point over which inflation is spurred.

Despite all this, last week’s Treasury auction of $13 billion in 30 year bonds went off at a yield of 3.355 percent, the highest since March 2012.    

What a difference a month makes.   At May’s sale of 30 year bonds, the yield was only 2.98%, the lowest yield since December.

30-year bonds are among the securities most sensitive to consumer prices because of their long maturity, as inflation would erode the return on the bonds’ fixed payments for their duration.

Over the past month, the yield curve has moved up, getting somewhat steeper in the process, as long rates moved more than short rates. 

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.

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

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
2012- 2.77
2013-  3.25

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. 

It will be interesting to hear what the Federal Open Market Committee has to say.

It would appear that interest rates are going to remain the same, go up, or go down.
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OFF BASE
Juan Pierre’s temerarious ways on the base paths are not hurting the Marlins.   They are hurting themselves. 

They are on pace for a 47-115 season, a level of losing topped only twice in the last 70 years.  With a little bit of luck, they just might beat the Mets’ record for futility of 120 losses.

Speaking of luck, almost half of their losses are by one or two runs in extra innings — none worse than a recent 11-inning game at the Philadelphia Phillies in which John Mayberry erased a Miami lead with a 10th-inning homer and then won it with a grand slam.

The Marlins manufactured the go-ahead run in the 10th inning on the speed of Juan Pierre, who drew a leadoff walk. Pierre fell behind two strikes in the count, but he capped the nine-pitch showdown with a walk. He advanced to second on a sacrifice bunt, and then stole third.  Juan then dashed home with the decisive run on a wild-pitch on a 2-2 slider that bounced away from the catcher.

The lead was short lived as Mayberry belted the game-tying home run in the 10th followed by his grand slam an inning later.

Juan is now 18th on the all-time stolen base list and 6th on the all-time caught stealing bases list.   He now has more stolen bases than anyone else playing baseball right now.

It might be a long summer for Juan and the Marlins. 


The first day of summer is Friday, June 21st.

Thursday, June 13, 2013

SBA 504 loan debenture rate for June

SBA 504 loan Debenture Rate for June 

The debenture rate is 2.45% but note rate is 2.49% and effective yield is only 4.529%.

Wednesday, June 12, 2013

SBA loans are good for the economy

The first week of June got off to a good start as the SBA approved $300,328,00 in SBA 7(a) loans for the week ending June 7th.  

That's a slight bump over last week when $291,446,000 in SBA 7(a) loans were approved.  

SBA 7(a) loan volume is a leading economic indicator as the correlation coefficient between SBA 7(a) loan volume and GDP is a statistically significant 0.86.


Thursday, June 6, 2013

SBA 7(a) Rate Update

Indices:

PRIME RATE= 3.25%
SBA LIBOR Base Rate June 2013 = 3.19%
SBA Fixed Base Rate June 2013 = 4.96%

Lenders can charge up to 2.75% over these indices.

Wednesday, June 5, 2013

SBA loans are good for the economy

$291,446,000 in SBA 7(a) loans were approved for the week ending May 31st.

For the one month period ending May 31st, SBA 7(a) loan approvals totaled $1,484,588.

This compares favorably to the month of April, when $1,353,386,000 in SBA 7(a) loans were approved.

This puts us on pace to beat the 1st quarter of 2013 when SBA 7(a) loan approvals totaled $4,049,146,000.

SBA 7(a) loan volume is a leading economic indicator as the correlation coefficient between SBA 7(a) loan volume and GDP is a statistically significant 0.86.


Monday, June 3, 2013

The SBA and nihilarian

nihilarian

nih-i-LAR-ee-uhn 

One who does useless work.

From Latin nihil (nothing).

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TIP OF THE WEEK 

SBA lenders are not nihilarians.   

SBA 7(a) loans account for most long term loans made to small businesses.   
When comparing SBA term loans with bank CALL report term loans, SBA loans account for as much as 70% of all long term loans made to small businesses.  
The correlation of SBA 7(a) loan approvals with our nation's economic performance is strong.

Just for fun I calculated the correlation coefficient between SBA 7(a) loan volume and GDP for over six years using the Microsoft CORREL function. 

It came out to a statistically significant 0.86. 

SBA lending is now up over 20% from last year!
_____________________________________

Indices:

PRIME RATE= 3.25%
SBA LIBOR Base Rate May 2013 = 3.20%
SBA Fixed Base Rate May 2013 = 4.52%
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Debenture Rate for May   

The debenture rate is 2.07% but note rate is 2.107% and effective yield is only 4.15%.

 ________________________________________________

AHEAD OF THE YIELD CURVE 
I don’t think we can call the Federal Reserve a bunch of nihilarians.

Federal Reserve Bank of New York researchers forecast the U.S. unemployment rate will decline in the fourth quarter of 2014 to the central bank’s threshold for considering an increase in the benchmark interest rate.  The Federal Open Market Committee in December specified 6.5 percent as the level for the jobless rate that would prompt consideration of raising the Fed’s target rate, which has been near zero since December 2008.  Prior to specifying the unemployment threshold, the FOMC said the rate would be near zero through mid-2015.

According to the U.S. Bureau of Labor Statistics, the unemployment rate is at 7.5 percent.

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

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

April 165,000
March 88,000
February 332,000
January 148,000
2012
December 155,000
November 161,000
October 137,000
September 114,000
August 142,000
July 181,000
June 45,000
May 77,000
April 68,000
March 143,000
February 240,000
January 243,000
2011
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
2010
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)
2009
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)
2008
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.

The U.S. still employs more than 2.5 million fewer people than when the recession began. At 180,000 jobs a month, it will take until the middle of 2014 to close that gap.

Private employment is up 2.166 million over the last year, and up 813 thousand so far in 2013 (a 2.44 million annual pace).  U.S. employers have added an average of 195,750 jobs each month this year, compared with 180,333 during the last half of 2012, based on figures from the Labor Department.   This average is skewed somewhat by the spike in numbers for February.  

It would appear that interest rates are going to remain the same, go up, or go down.
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OFF BASE
Are base stealers the nihilarians of baseball?  Especially when they get caught?

Right now, Juan Pierre has been caught 200 times stealing bases.  That’s more than anyone else playing baseball right now.  It’s number six in all of baseball history.

Juan just passed Bert Campaneris on the all-time caught stealing base record.  

Campy is probably best remembered for his antics in the 1972 American League Championship Series.  In game 2, Campaneris already had three hits, two steals and two runs when in the 7th inning he faced pitcher Lerrin LaGrow.  LaGrow's first pitch hit Campaneris in the ankle. Campaneris staggered for a moment, glared at LaGrow and then flung his bat toward LaGrow. The bat spiraled at LaGrow five feet off the ground, but LaGrow ducked, and the bat narrowly missed LaGrow, landing a few feet behind the mound.
   

If you feel like a nihilarian, just remember what John Wooden once said, “Don’t mistake activity for achievement.”