Monday, October 3, 2016

The SBA and trichotillomania

A compulsion to pull out one's hair.

From Greek tricho- (hair) + tillein (to pluck, pull out) + -mania (excessive enthusiasm or craze).


SBA is not impecunious.

The SBA began its new fiscal year October 1st with a $27 billion authorization for the SBA 7(a) loan program.  This comes after another record year for SBA 7(a) loans with SBA 7(a) loan approvals hitting just over $23 billion.

The 2017 Budget continues upfront fee waivers on 7(a) loans up to $150 thousand and provides a 50 percent fee waiver on 7(a) loans up to $500 thousand to veteran-owned businesses.

That means there should be plenty of money for SBA borrowers to buy real estate, refinance real estate, buy businesses, start businesses, refinance business debt and obtain working capital.

Last week, the House on Wednesday approved a bill to fund the federal government through December 9, averting a costly shutdown two days ahead of the deadline.   The trichotillomania was enervated.

SBA LIBOR Base Rate September 2016 =3.52%
SBA Fixed Base Rate September 2016 = 4.85%
SBA 504 Loan Debenture Rate for September  
The debenture rate is only 2.03% but note rate is 2.066% and the effective yield is 4.082%.

You should not have any trichotillomania over interest rates.

At its last meeting on interest rates, the Federal Reserve kept its benchmark rate at a historically low 0.4%, where it has stood since officials raised it last December for the first time in nearly a decade.  In their statement, they said “Near-term risks to the economic outlook appear roughly balanced,” its first such positive assessment this year. A similar appraisal last year was followed by a rate increase at the next meeting.

After the meeting, short-term Treasury yields rose but long-term yields fell.  A so-called flattening yield curve—describing the shape of Treasury yields moving from short-term to long-term notes—tends to occur when fixed-income investors are betting that the Fed is about to hike rates, which can lead to selling of short-term notes, the most influenced by changes in the federal-funds rate, and purchasing of longer-dated Treasuries. 

Longer term Treasuries, such as the 30 year Treasury note, are the most sensitive to long-term growth and inflation expectations. 

Keep your eyes and ears open for next week’s auction of 30 year Treasury bonds.

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
2014- 3.97
2015- 2.91
2016- 2.32

What does all this mean?

I don’t know.

Last month’s auction of new 30-year Treasuries saw weak demand with the yield on the 30-year note advancing 7.3 basis points to 2.469%.  Since then the long bond’s yield has dropped to 2.32%

Impecunious concerns will motivate the Federal Reserve but they might festinate as they don’t want to be oppugned and enervate the economy.  There just might be a recrudescence hortatory with splenetic presentiment amongst ultracrepidarians after Friday’s report on jobs for the month of September.

Impecunious?  Festinate?  Oppugn?  Enervate?  Recrudescence?  Hortatory?  Splenetic?  Presentiment?  Ultracredpidarians?  If you are now feeling trichotillomanical, a three day weekend approaches!

Here are the officially recognized Federal Reserve holidays:
Columbus Day October 10
Veterans Day November 11
Thanksgiving Day November 24

Christmas Day December 26 

No comments:

Post a Comment