prosateur
pro-zuh-TUHR
A writer of prose.
From French prosateur (a prose writer), from Italian
prosatore, from Latin prosator, from prosa (straightforward).
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TIP OF THE WEEK
Prolix prosateurs procrastinate over promulgations in a
new version of the SBA Standard Operating Procedures.
The comment period for two pending Proposed Rules have
ended.
SBA will then revise the SOP to incorporate any changes
to program requirements made by the Final Rules.
The prosaic propaedeutic on these Final Rules pertain to
Small Business Lending Companies, the SBA loan authorization, affiliation and
lending criteria.
In the meantime, a Fiscal Year 2023 funding bill has been
approved by Congress which includes $35 billion in authorization for 7(a)
lending.
This should be more than enough to meet anticipated
demand even with the significantly reduced guarantee fees for 7(a) loans.
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Indices:
PRIME RATE= 7.50%
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SBA 504 Loan Debenture Rate for December
For 20 year debentures, the debenture rate is only 4.56%
but note rate is 4.63% and the effective yield is 6.037%.
For 25 year debentures, the debenture rate is only 4.714%
but note rate is 4.769% and the effective yield is 6.114%.
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AHEAD OF THE YIELD CURVE
Inflation has stepped down.
That was the pronunciamento from the prosateurs for the
Federal Reserve’s Fed Open Market Committee's last meeting on monetary policy.
Not once, but twice they used the phrase "stepped
down" in the minutes from the December 2022 meeting.
In the staff review of the economic situation they stated
" Consumer price inflation—as measured by the 12-month percent change in
the price index for personal consumption expenditures (PCE)—STEPPED DOWN in
October but continued to be elevated."
They then later stated that " In November, the
12-month change in the CPI STEPPED DOWN to 7.1 percent and core CPI inflation
dropped to 6.0 per-cent."
So what does stepped down mean?
Keep in mind that the CPI is based on prices of food,
clothing, shelter, fuels, transportation, doctors’ and dentists’ services,
drugs, and other goods and services that people buy for day-to-day living.
The index measures price change from a designed reference
date. The reference base is 1982-84 and equals 100.
Here is what the index has done over the last two years:
2021-01-01 262.200
2021-02-01 263.346
2021-03-01 265.028
2021-04-01 266.727
2021-05-01 268.599
2021-06-01 270.955
2021-07-01 272.184
2021-08-01 273.092
2021-09-01 274.214
2021-10-01 276.590
2021-11-01 278.524
2021-12-01 280.126
2022-01-01 281.933
2022-02-01 284.182
2022-03-01 287.708
2022-04-01 288.663
2022-05-01 291.474
2022-06-01 295.328
2022-07-01 295.271
2022-08-01 295.620
2022-09-01 296.761
2022-10-01 298.062
2022-11-01 298.349
What does all this mean?
I don't know.
It appears that price increases have gone procumbent over
the last few months.
Back in February and March of 2021 the monthly difference
in prices was about 0.65% (265.028 compared to 263.346) or roughly 7.8%
annualized.
Now it is only about 0.1% (298.349 compared to 298.062).
Keep your eyes and ears open for this week's report on the
CPI.
On the same day, there will also be an $18 billion
auction of 30 year Treasury bonds.
At last month's auction of 30 year treasury bonds, rates
actually dropped by roughly 1/2 percent.
The high yield of 3.513 percent compares with 4.080
percent in November's auction.
The drop in yield reflects the month-long easing of
inflation risk.
The final report on jobs for 2022 reflected an increase
of 223,000 in December.
With 4.50 million jobs added, 2022 was the 2nd best year
for job growth in US history behind only 2021 with 6.74 million.
The Federal Reserve next meets January 31-February 1.
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OFF BASE
A three day weekend approaches.
The Federal Reserve has proscribed banks from being open
on the following days:
Birthday of Martin Luther King, Jr. January 16
Washington's Birthday February 20
Memorial Day May 29
Juneteenth
June 19
Independence Day July 4
Labor Day September 4
Columbus Day October 9
Veterans Day November 11
Thanksgiving Day November 23
Christmas Day December 25
