Proclivity
proh-kliv-i-tee
an inclination or predisposition toward something
especially : a strong inherent inclination toward something objectionable
From Latin prōclīvitās tendency, literally, a steep
descent, steepness, equivalent to prōclīv(is) sloping forward, steep (prō-pro-1
+ clīv(us) slope + -is adj. suffix
_____________________________________________
TIP OF THE WEEK
SBA has a proclivity to change things up.
SBA SOP 50-10-7 was effective August 1st, 2023.
A technical update has not yet been released clarifying
some issues that arose in the initial version of the SOP.
For example, the new SOP did not include language that
allows a maximum maturity of 25 years when the loan is for mixed purposes and
51% or more of the proceeds is used for real estate.
The State Small Business Credit Initiative (SSBCI) and
State Small Business Loan Guarantee Program has a propensity to keep it
simple. Amortization is not based upon
use of proceeds but instead on the cash flow of the borrower.
_________________________________________
Indices:
PRIME RATE= 8.50%
________________________________________
SBA 504 Loan Debenture Rate for August
For 20 year debentures, the debenture rate is only 5.13%
but note rate is 5.2039% and the effective yield is 6.609%.
For 25 year debentures, the debenture rate is only 5.15%
but note rate is 5.20364% and the effective yield is 6.554%.
_______________________________________________
AHEAD OF THE YIELD CURVE
What’s the difference between proclivity and propensity?
More importantly, what’s the difference between modest
and moderate?
The Federal Reserve at their last meeting on monetary
policy changed their assessment of the economy from modest to moderate.
Otherwise, the Fed’s statement on monetary policy was
virtually unchanged outside of the language regarding the rate move.
The change was “Recent indicators suggest that economic
activity has been expanding at a moderate pace.” Previously everything was at a modest pace.
“Moderate” is a bit stronger growth than “modest” in the
Federal Reserve's idiosyncratic lexicon.
Does that mean the Federal Reserve will continue to raise
rates at their next meeting in late September?
Fed Fund futures can be prospicient.
Fed Fund futures are a direct reflection of collective
marketplace insight regarding the future course of the Federal Reserve’s
monetary policy.
Here is a summary of what the market expects for Fed
Funds futures based upon the pit-traded prices at the Chicago Mercantile
Exchange:
DEC23- 5.41
DEC24- 4.25
What does all this mean?
I don’t know.
Results were good for last week’s 30-year bond auction as
the market continues to show a hearty appetite for Treasury paper in the face
of much bigger offerings.
The auction was upsized to $23 billion from $18 billion
in the last two months. The offering size remains below its record high of $27
billion in August 2021, exactly two years ago, when rates were half their
current level.
The high yield was awarded at 4.189 percent, up from
3.910 percent in July.
Keep your eyes and ears open for Wednesday’s release of
the minutes from the Federal Reserve’s last meeting on monetary policy.
The propounding profundity over promulgating moderate or
modest could be procacious prolix.
__________________________________________
OFF BASE
What’s the difference between propensity and proclivity?
Propensity is an inclination to behave in a particular
way. It is from Latin pro- (toward) +
pendere (to weigh).
Proclivity is derived from a Latin word “pro” and
“clivus.” While “pro” means “forward,” “clivus” means “slope.”
Thus the term has derived its meaning as “having an
inclination” or “leaning DOWN towards” something.
Proclivity is used more when describing a negative
inclination while “propensity” is used equally for a negative or positive
inclination.
