The SBA and PROpulsive

propulsive

pro·pul·sive

having the quality of driving or pushing forward

 

Latin prōpulsus, past participle of prōpellere "to push or thrust forward, compel to go onward"

 

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TIP OF THE WEEK

 

There is a propulsive increase in the alternative size standard for SBA loan applicants.

 

Effective March 18, 2024, under the alternative size standard, a business, including any affiliates, will be considered small if its tangible net worth is not in excess of $20 million (up from $15 million), and its average net income after Federal income taxes (excluding any carry over losses) for the preceding two completed fiscal years is not in excess of $6.5 million (up from $5 million).

 

This is a 34.46 percent adjustment for inflation that has occurred since the establishment of the statutory alternative size standard in 2010.

 

Prodigious.

 

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Indices:

PRIME RATE= 8.50%

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SBA 504 Loan Debenture Rate for March

 

For 20 year debentures, the debenture rate is only 4.98% but note rate is 5.05255% and the effective yield is 6.365%.

For 25 year debentures, the debenture rate is only 4.97% but note rate is 5.022257% and the effective yield is 6.286%.

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AHEAD OF THE YIELD CURVE

 

Propulsive and propitious.

 

Jobless claims remain steady and low, indicative of strong demand for labor and posing no threat to restrictive monetary policy.

Initial claims fell 1,000 in the March 14 week to a lower-than-expected 209,000 that pulls the 4-week average slightly lower to 208,000, among the lowest readings so far this year.

 

Total nonfarm payroll employment rose by 275,000 in February.

 

The monthly average for nonfarm payrolls for the first quarter to-date is 252,000 compared to 212,000 for the fourth quarter 2023.

 

Here are the latest jobs numbers from the Bureau of Labor Statistics.

 

2023     2,700,000

2022      4,810,000

2021       7,270,000

2020    -9,370,000

2019     2,108,000

2018      2,679,000

2017      2,110,000

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.

 

One profligate propaedeutic has been that there is a trade-off between jobs and inflation.

 

On Thursday, the 30 year Treasury auction high yield was at at 4.331 percent versus 4.360 percent in February and 4.229 percent in January.

 

The Federal Reserve looks closely at both industrial production and capacity utilization for prospicient prognostications.

 

The Federal Reserve watches this report closely to see if production constraints are threatening to cause inflationary pressures.

 

Normally the Fed does not feel there are inflationary pressures until the capacity utilization rate is about 82%.

 

Capacity utilization was unchanged at 78.3 percent in February from January.

 

In February, manufacturing capacity rose to 77.0 percent from 76.4 percent in the prior month, mining to 93.8 percent after 91.7 percent, with utilities down to 67.8 percent after 73.5 percent.

 

Utilities output was lower due to milder weather conditions after colder weather in January. The index for electricity fell 6.5 percent in February with natural gas utilities down 13.0 percent.

 

The Federal Reserve’s next meeting on monetary policy is March 19th and 20th.

 

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OFF BASE

 

One of the most famous prognostications of all time was from the soothsayer in Shakespeare’s Julius Caesar in Act I, scene 2, line 103 when he said “Beware the ides of March.”

 

So what the heck is an ide?

 

The Ides Of March refers to how the Romans kept track of the days in a month, which is quite different from how we do it. While we count the days sequentially from the first day all the way to the last day, the Romans used a different system. They counted backward from three fixed points of the month. For instance, the Nones usually fell on the 7th, the Ides on the 15th and the Kalends was the beginning of the month.

 

It is now known as the day Caesar was assassinated.  After being warned, Caesar took the prophecy very lightly. In fact, as he passed the seer on his way to the Theater of Pompey where he ends being stabbed to death by Brutus and 60 other Senators,  Caesar commented that “The Ides of March have come.” To that, the seer is reported to have replied, “Aye, Caesar; but they have not gone.”