Monday, December 2, 2013

The SBA and wassail

(WOS-uhl, wo-SAYL) 
To toast.
To go from house to house singing carols at Christmas.
  1. A toast to someone's health.
  2. A festivity with much drinking.
  3. A drink for toasting, especially spiced ale.
  4. The singing of Christmas carols going from house to house.

From Old Norse ves heill (be well).


The time to wassail is upon us.  

The 328 revisions to SBA’s Standard Operating Procedures will be in effect in just a few hebdomads (Bonus word!  A hebdomad (HEB-duh-mad) is a group of seven, or a period of seven days; a week.   It’s from the Latin hebdomas, from Greek hepta (seven)).   If you are too busy wassailing and don’t have a handle on all these pending changes to SBA lending, we’ve got it covered:

The FDIC just released its Quarterly Banking Profile for the third quarter.

For the first time in 17 quarters — since the second quarter of 2009 — earnings registered a year-over-year decline.

Lenders however doing SBA loans are enjoying substantial premiums from the sale of guaranteed portions that can be recognized as immediate fee income.

Let me know if you would like a copy of the latest FDIC Quarterly Banking Profile.

SBA LIBOR Base Rate November 2013 = 3.17%
SBA Fixed Base Rate November 2013 = 5.31%

SBA 504 Loan Debenture Rate for November 

The debenture rate is only 3.38% but note rate is 3.44% and the effective yield is 5.459%

The Federal Reserve keeps telling us that the economy “has been expanding at a MODERATE pace.” 

That’s an improvement from the MODEST pace they mentioned last July.  I’m still not sure what the difference is between moderate and modest.  Minutes however from their last meeting on monetary policy gave us a hint on what modest is.    They said that “Consumer price inflation continued to be MODEST.”  So what is MODEST consumer price inflation?

Last month, the BLS reported that the seasonally adjusted CPI for all urban consumers fell 0.1% (-0.7% annualized rate) in October. The CPI less food and energy increased 0.1% (1.5% annualized rate) on a seasonally adjusted basis.   These measures indicate inflation remains well below the Fed's target (2%).

That means the focus of the Federal Reserve will continue to be jobs.

Keep your eyes and ears open on this week’s jobs report.  

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

October 204,000
September 163,000
August 238,000
July 104,000
June 172,000
May 176,000
April 165,000
March 88,000
February 332,000
January 148,000
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
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.

At the current pace of job growth, it would take more than six years to get back to pre-recession employment levels.  The Federal Reserve’s Federal Open Market Committee meets in two weeks on monetary policy and they have made it clear that they won’t even consider raising interest rates until unemployment improves.   The monthly job gains reported by the Labor Department have steadily slowed this year, averaging 207,000 in the first quarter, 182,000 in the second quarter and 168,000 in the third quarter.  

It would appear that interest rates won’t be going up anytime soon.  Now that’s something to wassail about.

The drink of wassail, a hot mulled cider, was traditionally drunk as an integral part of wassailing; an ancient southern English drinking ritual intended to ensure a good cider apple harvest the following year.  The tradition of wassailing now falls into two distinct categories: The House-Visiting wassail and the Orchard-Visiting wassail.   The Orchard-Visiting wassail refers to the ancient custom of visiting orchards in cider-producing regions of England and singing to the trees to promote a good harvest for the coming year.  The House-Visiting wassail is the practice of people going door-to-door singing Christmas carols.

Wassailing even shows up in Hamlet Act 1, Scene 4:

"The king doth wake to-night, and takes his rouse,  
Keeps wassel."  

Hamlet is observing that his uncle is giving himself up to jollity.   We should all give ourselves up to jollity this time of year.  

Keep on wassailing.   

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