Monday, September 23, 2013

The SBA and plurisignification

The use of a word to convey multiple meanings at the same time.
From Latin pluri- (plus) + significare (to signify), from signum (sign).

The Standard Operating Procedures for SBA loans seems to be full of plurisignifications.

If and when SOP 50-10-5(F) is released, things will be fine.


SBA LIBOR Base Rate September 2013 = 3.18%
SBA Fixed Base Rate September 2013 = 5.62%

SBA 504 loan Debenture Rate for September 

The debenture rate is only 3.62% but note rate is 3.678% and the effective yield is a whopping  5.698%.


Is the use of the word moderate an example of plurisignification?

Two months ago at its July meeting on monetary policy, the Federal Reserve said the economy “expanded at a MODEST pace” while back in June it had said that the economy “has been expanding at a MODERATE pace.” 

Last week the Federal Reserve said that we are now back to a MODERATE pace.   Yes, “economic activity has been expanding at a moderate pace!”

What changed?

One of the Fed’s favorite gauges of the economy is the capacity utilization rate which measures how much plants and factories are being used.  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.

Last week the Fed reported that capacity utilization for total industry increased 0.2 percentage point in August to 77.8 percent. 

This is the first increase in capacity utilization in SIX months!  It is now only 0.6 percentage point above its level of a year earlier.

Here is what capacity utilization rates have done:

1997- 83.6
1998- 83.0
1999- 82.4
2000- 82.6
2001- 77.4
2002- 75.6
2003- 74.6
2004- 79.2
2005- 80.7
2006- 82.4
2007- 81.5
2008- 79.9
2009- 66.9
2010- 74.8
2011- 76.7
2012- 79.0
2013- 77.8

What does all this mean?

I don’t know.

While capacity utilization has barely moved up in the last year, it is up 10.9 percentage points from the record low set in June 2009.  It is still 2.4 percentage points below its long-run (1972-2012) average.

After the Fed moved its assessment of the economy’s growth back to “moderate,” from the “modest” language it used in July, Treasury bonds rallied the most in almost two years. 

30 year Treasury bond yields fell eight basis points to 3.75 percent.  This comes on the heels of the 30 year bond auction that drew a bid-to-cover ratio, which gauges demand by comparing total bids with the amount of debt offered, of 2.4, versus 2.11 at the August sale.   The 30 year Treasury yield had climbed to 3.94 percent on August 22, the highest since August 2011.

It would appear that the Federal Reserve thinks that interest rates are fine right now.

The word fine is an excellent example of plurisignification.

This is the word women use at the end of any argument when they feel they are right but can't stand to hear you argue any longer.

It means that you should shut up.

Also NEVER use "fine" to describe how she looks. 

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