cunctation
(kungk-TAY-shunn)
Delay;
procrastination; tardiness.
From Latin
cunctari (to hesitate, delay)
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TIP OF THE WEEK
TIP OF THE WEEK
Without any more
cunctation, the SBA has released its latest version of its Standard Operating
Procedure, which will be effective January 1st ,
2018.
Changes include a
reduction in the minimum required equity capital injection for a business
acquisition. At least 10% must be put into the project. A seller note can be
considered part of that injection but it must then go on full standby for the
life of the loan. The buyer must contribute AT LEAST
5%.
Franchise
eligibility has also changed with SBA now publishing a franchise directory.
Some third party
management agreements are now eligible as are consumer and marketing
cooperatives.
A borrower is
prohibited from leasing space to any business engaged in any activity that is
illegal under federal, state or local law.
New SBA submission
forms have also been released.
Let me know if you
would like a copy of the 409 page SOP 50 10 5(J).
If you are being
cunctative about reading it, feel free to ask me a question and I will make up
an answer.
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Indices:
PRIME
RATE= 4.25%
SBA
LIBOR Base Rate November =4.24%
SBA
Fixed Base Rate November 2017 = 6.46%
________________________________________
SBA
504 Loan Debenture Rate for October
The
debenture rate is only 2.85% but note rate is 2.89859% and the effective yield
is 4.635%.
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AHEAD OF THE YIELD CURVE
AHEAD OF THE YIELD CURVE
Is the Federal
Reserve being cunctative about raising interest
rates?
Most of the
post-WWII recessions were caused by the Fed tightening monetary policy to slow
inflation. Usually, when inflation starts to become a concern, the Fed tries to
engineer a "soft landing", and frequently the result is a recession. One of the
harsh lessons learned by the Federal Reserve was in the 1930’s when they
misapplied monetary policy enervating to the point of splenetic impecunious
presentiment.
Last week at their
meeting on monetary policy, the Federal Reserve Open Market Committee policy
statement changed from describing the economy from "rising moderately" to
"rising at a solid rate". Futures markets are setting expectations firmly
centered on a rate hike at the next meeting in
December.
On Friday, the
Bureau of Labor Statistics reported that jobs increased by 261,000 in October.
Previously it was reported that in September the economy had lost 33,000 jobs
but that has now been revised to show an increase of 18,000 jobs and August was
revised up from 169,000 new jobs to 208,000. With these revisions, employment
was 90,000 higher than previously reported.
Here is a summary
of net payroll employment and this week’s interesting little table of
data:
October
261,000
September
18,000
August
208,000
July
138,000
June 222,000
May
152,000
April
207,000
March
50,000
February
235,000
January
216,000
2016
2,160,000
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.
Also included in
the jobs report was a look at wages. Average hourly earnings for all employees
on private nonfarm payrolls, at $26.53, were little changed in October (-1
cent), after rising by 12 cents in September. Over the past 12 months, average
hourly earnings have increased by 63 cents, or 2.4 percent.
This lack of wage
growth is enervating the cerebration on
the Phillips Curve to the point it might be considered pabulum. The Phillips
curve, an economic concept named for the late economist A.W. Phillips, states
that as unemployment falls inflation will ultimately rise as workers see wage
increases. Fed officials have justified its
recent tightening stance on the Phillips curve.
Cunctation may
prevail with the Fed. Their statement also said that “economic conditions will
evolve in a manner that will warrant gradual increases in the federal funds
rate; the federal funds rate is likely to remain, for some time, below levels
that are expected to prevail in the longer run.”
Keep your eyes and
ears open for this Thursday’s $15 billion sale of 30 year Treasury bonds.
At last month’s
sale, the 2.870 percent high yield was 8 basis points higher than September’s
rate but well below the March auction's 3.170 percent, a two and half year peak.
The Treasury just cut its borrowing estimate by almost half this quarter. The
Treasury will issue $275 billion in net marketable debt from October through
December, assuming a cash balance of $205 billion at the end of the period,
according to a statement released Monday in Washington
The debt ceiling
suspension is due to expire on December 8th. Further cunctation is
expected.
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OFF BASE
OFF BASE
Cunctation
is the Italian way.
Drawing
on an intimate knowledge of their own history, they see an upside to letting
problems sort themselves out, piano piano—slowly. It’s even part of the national
curriculum. By age 11, almost all Italian schoolchildren learn the story of
Quintus Fabius Maximus Verrucosus, the Roman general who 2,200 years ago slowly
ground down Hannibal Italy
I may have to cunctate after
all.
