The SBA and degust

degust

di-GUHST

To taste or savor appreciatively.

From Latin degustare (to taste), from de- (completely) + gustare (to taste).

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TIP OF THE WEEK 

People are degusting.

The National Restaurant Association reported that for the fifth consecutive month, a majority of restaurant operators reported higher same-store sales. Fifty-four percent of restaurant operators reported a same-store sales gain between July 2013 and July 2014.  For the 11th consecutive month, a majority of restaurant operators said they are planning for capital expenditures in the months ahead. Fifty-four percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months.

According to the Small Business Administration, restaurants (limited service and full service) have accounted for more SBA 7(a) loans than any other business since 2001.  Almost ten percent of all SBA loans are to restaurants.

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Indices:

PRIME RATE= 3.25%

SBA LIBOR Base Rate September 2014 = 3.16%

SBA Fixed Base Rate September 2014 = 5.34%

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SBA 504 Loan Debenture Rate for August  

The debenture rate is only 2.88% but note rate is 2.92% and the effective yield is 4.96%.

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AHEAD OF THE YIELD CURVE 

Last month payroll growth slowed significantly after six months of strong gains.

Or did it?

U.S. employers added 142,000 jobs in August.  Before that employers had added 200,000-plus jobs for six straight months — the longest stretch since 1997.

Job gains for June and July were also revised down by a total 28,000. June's was revised to 267,000 from 298,000 and July's to 212,000 from 209,000.

Revisions to August’s job’s number might be even more significant, but perhaps in a positive direction.  

For example, in 2011, the Labor Department initially reported there were no job gains in August. That total was subsequently adjusted up to a 57,000 gain and then to a 104,000 gain on the second revision two months later.  Last year, August job gains were revised up from 169,000 in the first estimate to 193,000 and then to 238,000.

After the jobs report came out on Friday, the 30-year bond yield shed 1.5 basis points to 3.194%.  

Keep your eyes and ears open for this week’s auction of the 30 year Treasury bond.  Last month’s $16 billion sale of 30 year Treasury bonds sold at a yield of 3.224%.  January’s auction sold at a yield of 3.899%.

The Federal Reserve meets next week on monetary policy.

So where then are interest rates going?

Eurodollar futures settle at a three- month lending rate that has averaged about 22 basis points more than the Fed's target over the past 10 years.

Here is a summary of what the market expects for Eurodollar futures based upon the pit-traded prices at the Chicago Mercantile Exchange:

DEC14- 0.25

DEC15- 0.95

DEC16- 2.03

DEC17- 2.75

DEC18- 3.11

DEC19- 3.37

DEC20- 3.59

What does all this mean?

I don’t know.

Traders are betting the Federal Reserve won’t raise interest rates any time soon.

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OFF BASE

Degust the waning days of summer and the final games of the regular season for major league baseball.

It’s also one of your last chances to degust an unheralded baseball player.

The Oakland A’s, celebrated as being the most statistically forward thinking team in all of baseball, has traded for the greatest three true outcome player in the game.

Three True Outcomes?  What is that, it sounds kind of cool?

The Three True Outcomes are a walk, strikeout or home run. They are called this because the three supposedly are the only events that distilled the game down to its essence of a battle between pitcher and hitter.

Adam Dunn is the ultimate "Three True Outcomes" guy.  

Dunn has hit 95 homeruns  the last three seasons, more than almost everyone except three guys.  He hits a home run every 14.8 times he comes to the plate.  That’s second most of all active major league baseball players.  All time, he is ninth behind legends like Babe Ruth and Harmon Killebrew.

Adam Dunn also has more strikeouts than any other player currently playing.  As a matter of fact, he is 528 strikeouts ahead of the next closest guy still playing.  His 2,355 total strikeouts is third ALL TIME.

He has led both the National League and American League with the most walks in a season.  

Dunn hit a two-run homer on Monday with his very first swing as a member of the A's.  

Amazingly,  Dunn has yet to experience the playoffs, and his 1,976 games are the most by any active player without a postseason appearance.  He plans to retire at the end of this season.