pro-ROHG
verb tr.:
1. To discontinue a session of something, for example, a parliament.
2. To defer or to postpone.
from Latin prorogare (to prolong or defer), from pro- (before) + rogare (to ask).
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TIP OF THE WEEK
The official term for shutting down Parliament is "proroguing".
MPs do not vote to prorogue - it's a power that rests with the Queen, done on the advice of the prime minister.
Parliament will be suspended just days after MPs return to work in September, after the Queen agreed to a request from Prime Minister Boris Johnson.
It means MPs will have less time to pass laws that could stop the UK leaving the European Union without a deal on 31 October.
That current exit date is written into law, so if nothing changes the UK will leave automatically - whether or not a deal has been reached.
No prorogation with the US Congress.
With both the House and Senate out of town for the August recess, lawmakers will face a chaotic September. They’ll have three weeks to prevent a second shutdown in a year that is set to start October 1st without congressional action.
The House and Senate still must pass 12 FY 2020 spending bills by September 30, 2019 or agree to a Continuing Resolution (CR) to keep the government operating beyond the end of FY 2019.
SBA programs remain in limbo and could shut down.
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Indices:
PRIME RATE= 5.25%
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SBA 504 Loan Debenture Rate for August
For 20 year debentures, the debenture rate is only 2.15% but note rate is 2.188% and the effective yield is 3.531%.
For 25 year debentures, the debenture rate is only 2.31% but note rate is 2.241% and the effective yield is 3.62%.
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AHEAD OF THE YIELD CURVE
Can the recession be prorogued?
The splenetic presentiment with an inverted curve continued as the Labor Department reported that the U.S. created a lackluster 130,000 new jobs in August, adding to evidence that hiring has slowed sharply in 2019.
That payroll total was inflated by the federal government’s addition of 25,000 temporary workers for the 2020 census. Without those gains, the August number would have been even weaker.
One of the things dragging down the job numbers was with manufacturers. Manufacturers added just 3,000 jobs in a sign the trade war and slowing global economy continue to take a toll.
The larger question is whether the contraction in manufacturing will lead to a steep downturn in the broader economy. That could happen if businesses stop hiring and begin to shed workers.
Keep your eyes and ears open for next week’s report on industrial production and capacity utilization.
One of the Fed’s favorite leading indicators on the economy is capacity utilization which measures the amount of a plant that is in use at factories, mines and utilities. Several analysts have pointed to a rate between 81% and 82% as a tipping point over which inflation is spurred. The Fed last month reported that capacity in use slipped 0.3 percentage point in July to 77.5 percent.
Here is what capacity utilization rates have done:
2007- 81.5
2008- 79.9
2009- 66.9
2010- 74.8
2011- 76.7
2012- 79.0
2013- 77.8
2014- 78.8
2015- 76.5
2016- 75.4
2017- 76.2
2018- 78.5
2019- 77.5
What does this mean?
I don’t know.
The factory sector is in a technical recession, with output suffering small declines for the past two quarters. The July data do not point to any quick recovery. Renewed trade tension with China is not expected to help. For now, the consumer is the engine of U.S. economic growth.
Last week, the 10-year Treasury added 7.4 basis points, while the 2-year Treasury climbed 3.6 basis points, and the long-dated 30-year bond gained 8.7 basis points. As a result, the inversion of the yield curve between the 2 year Treasury and the 10 year Treasury unwound after inversion for the last week of August. The 3 month yield and the 10 year yield, at about 1.961% and 1.561% respectively remain upside down. The Federal Reserve Bank of Cleveland uses past values of the slope of the yield curve and GDP growth to provide predictions of future GDP growth and the probability that the economy will fall into a recession over the next year. They recently pegged the probability of a recession at 44.1 percent, the highest probability since 2008.
The report on industrial production and capacity utilization comes out on September 17th and the Federal Reserve Open Market Committee meets on September 17th and 18th.
None of this can be prorogued.
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OFF BASE
You can not prorogue the calendar but summer has not ended.
The official end of summer is not until September 22nd. The autumnal equinox is the next day.
After the autumnal equinox, nights begins to grow longer than the days. This ends with the December solstice, when days start to grow longer and nights shorter.
Don’t look too closely at the calendar however as this Friday is a Friday the 13th.
There is a word for the fear of Friday the 13th. It is friggatriskaidekaphobia. The Frigga is for Friday, the triskai is for 3, the deka means 10, so triskaideca means 13, and phobia is the fear.
If friggatriskaidekaphobia is too hard to pronounce you can always use Paraskevidekatriaphobia, which is an extension of Triskaidekaphobia. It originates from Paraskevi, (Greek for Friday).
If you wanted to say thank god its Friday in Greek it would be dóxa to Theó Eínai Paraskeví.
If you wanted to say thank god its Friday in Spanish it would be Gracias a Dios es Viernes while in German it would be Gott sei Dank ist es Freitag and Italian it’s grazie a Dio è venerdì.
The word Friday comes from the Old English Frīġedæġ, meaning the "day of Frige", a result of an old convention associating the Germanic goddess Frigg with the Roman goddess Venus, with whom the day is associated in many different cultures.
The Greek word for Friday is Paraskevi and is derived from a word meaning "to prepare". As Lord Baden Powell once told me, “be prepared.”
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