Monday, January 9, 2017

The SBA and repletion

The condition of being completely filled or satisfied.
Via French, from Latin replere, from re- (back, again) + plere (to fill), from plenus (full).


SBA wants repletion with its Standard Operating Procedures, SOP 50-10-5(I) that became effective January 2, 2017.

Not included however in the new SOP just released is even newer guidance on processing affirmative responses for “an Associate of Poor Character”.  That guidance is reflected in a recent procedural notice that came out two weeks BEFORE tehe effective date of the new SOP.  Got that?

Guidance on SBA 504 debt refinance is also not found in the new SOP.  It is instead reflected in a policy notice from last November allowing for the Financing of “Business Operating Expenses” up to an 85% LTV.

Otherwise, SBA expects that the SOP should be arrant and not frustraneous. 

SBA LIBOR Base Rate December 2016 =3.63%
SBA Fixed Base Rate December 2016 = 5.71%

SBA 504 Loan Debenture Rate for January
The debenture rate is only 2.80% but note rate is 2.847% and the effective yield is 4.585%.

The bond market felt no repletion to start the New Year.  A splentic presentiment over a recrudescence of interest rates created a little trichotilloania.

On Thursday, the yield for the 30-year Treasury bond dropped eight basis points down to 2.965%, its largest drop since July 5.  Data pointed to lackluster private-sector jobs growth a day ahead of the government’s official December employment report.

When the jobs report came out, Treasury yields rose, reversing the earlier drop, after official data showed average hourly earnings for American workers accelerated sharply last month.  Fixed-income investors focused on hourly earnings, which accelerated more swiftly than economists’ had anticipated. Wages increased by 0.4% last month, raising the yearly rate to 2.9%.

Rising wages are seen as a harbinger of inflation because companies typically raise the price of their goods to offset the increase.

Here is a summary of net payroll employment and this week’s interesting little table of data:
December                                                                                          156,000
November                                                                                         204,000
October                                                         135,000
September                                                   208,000
August                                                          167,000
July                                      252,000
June                                     292,000
May                                       11,000
April                                     123,000
March                                   186,000
February                             244,000
January                               172,000
2015     2,740,000
2014     3,116,000
2013     2,074,000
2012     2,193,000
2011      2,103,000
2010     1,022,000
2009     -5,052,000
2008     -3,617,000
2007    1,115,000
2006     2,071,000
2005     2,484,000
2004     2,019,000

What does all this mean?

I don’t know.

The latest payrolls tally brought the advance for 2016 to 2.16 million, after a gain of about 2.7 million in 2015. The streak of gains above 2 million is the longest since 1999.

The 30-year T-bond yield rose 4.3 basis points to end the day at 3.01%.

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

The 30 year Treasury bond is very sensitive to inflationary expectations.  Last month’s auction had the highest awarded yield of the year and was 25 basis points above the November auction rate and nearly 1.00 percentage point above the July yearly auction low of 2.172 percent.

If time off for the holidays created a sense of repletion, you can look forward to a three day weekend.

According to the Federal Reserve, here are our holidays for 2017:
Birthday of Martin Luther King, Jr. January 16
Washington's Birthday February 20
Memorial Day May 29
Independence Day July 4
Labor Day September 4
Columbus Day October 9
Veterans Day November 11
Thanksgiving Day November 23
Christmas Day December 25

Happy New Year

No comments:

Post a Comment