Monday, November 24, 2014

The SBA and supplicatory



Humbly pleading.

From Latin supplicare (to kneel).


Commercial real estate prices continued to surge in the third quarter.

According to CoStar, commercial property sales activity surged 23% over the last year.

Both industrial properties and hotels experienced healthy gains.

This month's CoStar Commercial Repeat Sale Indices (CCRSI) provide the market's first look at September 2014 commercial real estate pricing. Based on 1,214 repeat sales in September 2014 and more than 125,000 repeat sales since 1996, the CCRSI offers the broadest measure of commercial real estate repeat sales activity. 

If you would like a copy of this release from CoStar, send a supplicatory email.


SBA LIBOR Base Rate November 2014 = 3.16%
SBA Fixed Base Rate November 2014 = 5.28%
SBA 504 Loan Debenture Rate for November       

The debenture rate is only 2.80% but note rate is 2.84% and the effective yield is 4.879%.

Minutes of the Federal Reserve’s last meeting on monetary policy on October 28th and 29th said that they should be on the lookout for signs of a decline in expectations for inflation.

Over the last 12 months, the Consumer Price Index increased 1.7 percent according to the Bureau of Labor Statistics and has remained below the Fed’s 2 percent target for 29 consecutive months

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.  The Federal Reserve typically won’t initiate increases in interest rates until then.

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
2014- 78.8

Capacity utilization for the industrial sector decreased 0.3 percentage point in October to 78.9 percent, a rate that is 1.2 percentage points below its long-run (1972–2013) average. Capacity utilization at 78.9% is 1.2 percentage points below its average from 1972 to 2012 and below the pre-recession level of 80.8% in December 2007.

What does all this mean?

I don’t know.

Also reflected in the Fed minutes was the concern that inflation might persist below the Committee's objective for quite some time.

It would appear that interest rates will not be going up anytime soon.

While inflation may not be appearing on the Federal Reserve’s radar, it is hitting home.

Americans will be paying the second-highest costs on record for their Thanksgiving dinners.

Blame the sweet-potato casserole.  Higher prices for sweet potatoes, whipping cream, and pumpkin-pie mix are driving the gains. A feast for 10 will come in at $49.41 this year, a modest 37-cent increase from 2013, while just shy of the all-time high of $49.48 set in 2012, according to a price survey by the American Farm Bureau Federation that was started in 1986.  Prices for a 3-pound (1.4 kilogram) bag of sweet potatoes rose 6 percent to $3.56, and the cost of a half pint of whipping cream climbed 8.1 percent to $2. A 16-pound turkey will cost shoppers $21.65 this year, down from $21.76 in 2013.  Turkey prices fell because retailers offered discounts to lure customers, even though U.S. grocers are paying the highest prices ever at the wholesale level.

Americans eat about 46 million of the birds on Thanksgiving. 

The average weight of a turkey purchased at Thanksgiving is 15 pounds.  How many persons can a 15 pound turkey feed?  Allow 1 pound of uncooked turkey per person. So to answer your question - 15 people without leftovers.   

So if 46 million turkeys are served and 15 people can eat a single turkey that is 675 million people that can be fed.  That’s more than twice the population of the United States.

One in seven Americans – 46 million people – rely on food pantries and meal service programs to feed themselves and their families, according to a study by Feeding America, a network of 200 food banks

46 million turkeys will be eaten on Thanksgiving Day.  46 million people in American are going hungry every day.  Have a Happy Thanksgiving.

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