Monday, March 10, 2014

The SBA and concinnity



A harmonious arrangement of various parts.

From Latin concinnare (to put in order) and concinnus (skillfully put together)



The concinnity of SBA lending continues as the Personal Resources Test has been eliminated.  

SBA applicants with excess personal resources had been required to utilize those assets first prior to SBA financial assistance.

A formal announcement from SBA is on the way.

SBA LIBOR Base Rate March 2014 = 3.16%
SBA Fixed Base Rate March 2014 = 5.31%
SBA 504 Debenture Rate for February 

The debenture rate is only 3.23% but note rate is 3.28% and the effective yield is 5.309%.

Much like Goldilock’s porridge being neither too hot nor too cold, the Federal Reserve seeks a comforting concinnity between inflation and unemployment.

It has said that it will keep its short-term interest rate near zero "well past" when unemployment reaches 6.5 percent, especially with inflation well below the Fed's 2% target.

The unemployment rate has bumped back up to 6.7 percent.  

But the job market actually rebounded from a two-month slump in February as employers added 175,000 jobs.  Employment gains for December and January were revised up by a total 25,000. December's were revised to 84,000 from 75,000 and January's to 129,000 from 113,000.

Despite the solid payroll advances, the unemployment rate ticked up.  The main reason for the increase in the unemployment rate was a surge in the labor force — the number of people working or looking for work.  The labor force jumped by more than half a million people in February.  After seeing many months of people giving up looking for work, it could be an indication that more people are coming off the sidelines and back into the labor force.  Employment is now 0.5% below the pre-recession peak (666 thousand fewer total jobs). Private employment is now just 129 thousand below the previous peak in January of 2008.

The Federal Open Market Committee meets March 18-19.  Keep your eyes and ears open to the 6.5% unemployment rate threshold in its March statement as it is not a sufficient or particularly informative measure of labor market slack and therefore not the best guidepost for monetary policy.

Also keep your eyes and ears open for this week’s sale of 30 year Treasury bonds.

Last month the Treasury Department sold $16 billion of 30-year bonds at a high yield of 3.690%.  January’s auction of $13 billion of 30 year Treasury bonds sold at a yield of 3.899% compared to December’s 3.90%.   In November the 30 year Treasury bonds drew a yield of 3.81% while in October it was 3.758%.

Here is what the 30 year Treasury bond has been doing and this week’s interesting little table:
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

The 30 year Treasury bond is currently at 3.72 percent.

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.   The rule of thumb is that an inverted yield curve (short rates above long rates) indicates a recession in about a year while a flat curve indicates weak growth and a steep curve indicates strong growth.

According to the Federal Reserve Bank of Cleveland the steeper slope had a negligible impact on projected future growth. Projecting forward using past values of the treasury yield spread and GDP growth suggests that real GDP will grow at about a 1.3 percentage rate over the next year.   According to the Bureau of Economic Analysis, GDP for all of 2013 expanded at a 1.9 percentage rate.
Our seasonal concinnity is always disrupted by daylight saving time.   
This barbaric torture began with the Germans during World War I to alleviate hardships from wartime coal shortages and air raid blackouts.  The United States adopted it in 1918 as a result of our joining in on the war.  Daylight saving time was repealed in the United States after the war ended in 1919.  During World War II, Congress enacted the War Time Act with year round daylight saving time.  This remained in effect until after the end of the war when daylight saving time was once again repealed. 
With the escalation of the war in Vietnam, politicians naturally thought we needed to once again have daylight saving time.  The U.S. federal Uniform Time Act became law on April 13, 1966 and it mandated that daylight saving time begin nationwide on the last Sunday in April and end on the last Sunday in October, effective in 1967.
In 1987, the Federal Fire Prevention and Control Act of 1986 moved the beginning of daylight saving time to the first Sunday in April.  Its primary support came from both of the Senators from Idaho based on the premise that during daylight saving time fast-food restaurants sell more French fries, which are made from Idaho potatoes.  Not enough French fries were being eaten so in 2007, daylight saving time was extended another four to five weeks, from the second Sunday of March to the first Sunday of November.
Since daylight saving time moves sunrise one hour later by the clock, late sunrise times become a problem when daylight saving time is observed either too far before the vernal equinox or too far after the autumnal equinox.

The vernal equinox, the first day of Spring, is not until March 20th.


  1. Quick Unsecured Loans for Pensioners for Pensioners helps one to draw money in spite of being an unemployed and having no source of income with them to get rid of the situation of the emergency @ Unsecured Business Loans for Pensioners

    Unsecured Loans for Pensioners @

    Bad Credit Unsecured Loans for Pensioners @

  2. Commercial real estate loan is made especially for buying a commercial property at lower interest rate. Even if you are labeled as bad credit the loan is equally availed in a hurdle free manner. Larger repayment duration and greater amount are other attractions of the loan. Read the site- Apartment Building Loans for key features of the loan.