The SBA and PROletariat

proletariat

pro·le·tar·i·at

The class of industrial wage earners who, possessing neither capital nor production means, must earn their living by selling their labor.

The poorest class of working people.

The propertyless class of ancient Rome, constituting the lowest class of citizens.

 

from Latin prōlētārius, belonging to the lowest class of Roman citizens Derived originally from the Latin PROLETARII, the name given in the census of Servius Tullius to those who were of value to the state only as baby makers (PROLES)

 

Proles came from Latin pro- + olēs (“growth”)

 

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TIP OF THE WEEK

 

Workers unite for small business.

 

Small businesses play a disproportionately large role in our labor markets: half the Americans that work for a private business work for a small one.

 

And with entrepreneurship surging since the pandemic, that role is poised to grow further.

 

Small businesses created over 70 percent of net new jobs since 2019. In the previous business cycle, small businesses created 64 percent of net new jobs.

 

An important component of this has been credit to small businesses with government guarantees.

 

Charge-off rates for the SBA’s flagship small business loan guarantee programs are at their lowest on record.

 

I am not making any of this up.   This just came out from the US Treasury analyzing Small Business and Entrepreneurship in the Post-COVID Expansion.

 

 

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Indices:

PRIME RATE= 8.00%

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SBA 504 Loan Debenture Rate for September

 

For 20 year debentures, the debenture rate is only 4.45% but note rate is 4.517% and the effective yield is 5.833%.

For 25 year debentures, the debenture rate is only 4.45% but note rate is 4.499% and the effective yield is 5.765%.

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AHEAD OF THE YIELD CURVE

 

The Federal Reserve was looking out for the proletariat.

 

The recent ½ percent drop in the fed funds rate was driven primarily by employment concerns.

 

In its statement after its last meeting on monetary policy, the Fed said "The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective."

 

This wording regarding employment is new and suggests that the decision for a larger cut was due to the FOMC wanting to signal that they want to avoid further cooling in the labor market.

 

No cooling was reflected in the job numbers for September as employment increased by 254,000.

 

The monthly average in payroll gains for the third quarter is 186,000, somewhat above the monthly average for the second quarter of 147,000, but slower than 267,000 in the first quarter.

 

After the employment numbers came out, the 30 year Treasury bond jumped up to 4.255%.

 

At last month’s auction of 30 year Treasury bonds, the high yield was awarded at 4.015 percent.

 

Keep your eyes and ears open for this week’s auction of 30 year Treasury bonds.

 

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- 4.015%

 

 

So what does all this mean?

 

I don’t know.

 

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

 

Just after Labor Day the inversion of the yield curve ended with two year treasury rates now below the 10 year yield.

 

The yield curve had been inverted for a staggering 783 consecutive days, the longest such period in U.S. history.

 

More procellous promulgations on the yield curve is profligate.

 

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OFF BASE

 

In George Orwell’s book 1984, Proles were the lowest class of people but made up about 85% of the population of Oceania.

 

While impoverished, powerless and a massive group of people the proles were free, unlike the rest of Oceania. They are not checked by the Party on what they do and think; therefore the proles are the only ones able to take Big Brother down.

 

Something to think about over the upcoming three day weekend.

 

Columbus Day is an official Federal holiday recognized by the Federal Reserve.

 

Originally celebrated on October 12th to celebrate Columbus’s arrival in the Americas on October 12th, 1492, the Uniform Monday Holiday Act moved permanently to a Monday Washington's Birthday, Memorial Day and Columbus Day as  federal holidays.

 

As a result, Columbus Day is always celebrated on the second Monday in October.