The SBA and PROnation

pronation

pro-NAY-shuhn

1. Rotation of the forearm so that the palm faces downward or backward.

2. Rotation of the foot such that the weight is borne on its inner edge.

3. The resulting position when the arm or foot is rotated in such a manner.

 

From Latin pronare (to turn or lean forward).  A counterpart is supination in which the palm is facing upward or the weight is borne on the outer edge of the foot.

 

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TIP OF THE WEEK

 

The pronation of one’s hands reveals much.

 

Hands open and your palms at a 45-degree angle: Communicates that you are being honest and open.

Hands open with palms down: Communicates that you are certain about what you are talking about.

Palms facing each other with your fingers together: Communicates that you have expertise about what you are talking about.

 

The SBA has thrown up its hands dealing with bad people.

 

SBA has published Procedural Notice 5000-857477 implementing the recent Criminal Justice Rule.

The restrictions on businesses with an Associate who is on probation or on parole have been removed.

Applicants currently incarcerated, under indictment for a felony or any crime involving or relating to financial misconduct or a false statement are still ineligible.

 

Let me know if you need a copy of this new procedural notice.

 

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Indices:

PRIME RATE= 8.50%

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SBA 504 Loan Debenture Rate for June

 

For 20 year debentures, the debenture rate is only 5.06% but note rate is 5.13% and the effective yield is 6.445%.

For 25 year debentures, the debenture rate is only 5.04% but note rate is 5.09287% and the effective yield is 6.354%.

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AHEAD OF THE YIELD CURVE

 

Pronation is the rotation of your hand towards your thumb.

 

Kind of like when Ceaser gives a thumbs down to a gladiator.

 

The Federal Reserve gave a thumbs down to interest rates coming down anytime soon at its last meeting.

 

Its statement on monetary policy issued June 12 is virtually unchanged from the one published May 1.

 

The assessment of inflation has been upgraded to “modest further progress" from “a lack of further progress" in the prior version.

 

The language related to the change in the balance sheet reduction program has been removed.    The Fed has reduced its reinvestments in US Treasuries by $35 billion a month.    This 1/3 of a trillion dollar reduction did not seem to impact the Treasury bond market.

 

At last week’s auction of $25 billion in 30 year Treasury bonds, the high yield was awarded at 4.403 percent versus 4.635 percent a month ago. The auction high yield was awarded 1.5 basis points below where the when-issued long bond was trading at auction time, indicating very strong demand,

 

Here is what the 30 year Treasury bond has been doing and this week’s interesting little table of data:

 

2014- 3.97

2015- 2.91

2016- 2.32

2017- 3.16

2018- 3.13

2019- 2.594

2020- 1.216

2021- 1.88

2022- 2.375

2023- 3.741

2024- 4.350%

 

 

So what does all this mean?

 

I don’t know.

 

On Friday the 30 year yield closed at 4.350%.

 

Why is the 30 year yield dropping?

 

The long end of the yield curve prognosticates inflationary expectations and ultimately market rate expectations.

 

Keep your eyes and ears open for this week’s report on capacity utilization.

 

Last month capacity utilization had declined to 78.4 percent in April.

 

The decline was offset by a rise in utilities output.

 

Utilities' output rose 2.8 percent higher in April from March. There was a 3.1 percent rise in electric output and 1.1 percent in natural gas. Unusually warm weather in April boosted demand for cooling.

 

 

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OFF BASE

 

There is a thing called premature pronation.    Don’t blush, it is a baseball pitching phrase.

 

Premature Pronation is the pronation of the pitching forearm well before the Release Point

 

It is the twist you see in the wrists of many baseball pitchers who Point the Ball at Second Base or Center Field as part of their throwing motion.

 

This pronation occurs to get the fingers behind the ball so that they can impart the force generated by the body into the ball. It is a natural action in the follow-through.

 

It is also called the Tommy John Twist.     It is named for Dodger pitcher Tommy John who snapped the ligament in his elbow.

 

Tommy John surgery is a surgical graft procedure where the ulnar collateral ligament in the medial elbow is replaced with either a tendon from elsewhere in the patient's body, or with one from a deceased donor.

 

Wednesday June 19th is a bank holiday- Juneteenth.      There is also a full slate of baseball games all that day.