congeries
kon-JEER-eez,
KON-juh-reez
A collection of
miscellaneous things.
From Latin
congeries (heap), from congerere (to heap up), from con- (with) + gerere (to
carry).
_______________________________________________
TIP OF THE WEEK
Please note our
new mailing address
Stultz Financial,
Inc.
1200 Quail Street
Suite 165
Newport
Beach CA 92660
_____________________________________
Indices:
PRIME
RATE= 3.25%
SBA
LIBOR Base Rate August 2014 = 3.16%
SBA
Fixed Base Rate August 2014 = 5.38%
________________________________________
SBA
504 Loan Debenture Rate for August
The
debenture rate is only 2.88% but note rate is 2.92% and the effective yield is
4.96%.
________________________________________________
AHEAD
OF THE YIELD CURVE
Do you remember
what the Federal Reserve said about interest rates last time they
met?
Did you even
understand what they said?
Stay tuned for
this Wednesday’s release of minutes from the Federal Reserve’s last meeting on
monetary policy.
Analysts parse
each word looking for clues to policy. There is actually a statistical method
known as Latent Semantic Analysis (LSA) to extract meaning from the FOMC
minutes. LSA is an algorithm that identifies common themes across a collection
of texts and then characterizes the documents by the relative prevalence of each
theme. The first step of LSA is to represent a document as a term-frequency
vector, i.e. a list of the words in the document with their relative
frequencies. Latent Semantic Analysis can often extract a complex, multifaceted
signal from the minutes and as a result Treasury yield changes around the time
of the minutes release depend on the specific themes expressed, the level of
monetary policy uncertainty, and the economic
outlook.
The bond market
keeps things simple. Last week’s $16 billion sale of 30 year Treasury bonds
sold at a yield of 3.224, the lowest auction yield since May
2013.
The
long bond yield has dropped more than 50 basis points since the start of the
year. July’s auction sold at a yield of 3.369%. April’s $13 billion auction of
30 year Treasury bonds sold at a yield of 3.525%. In March the auction drew
a yield of 3.630%
compared to February’s yield of 3.69%. January’s auction sold at a yield of
3.899% compared to December’s 3.90%.
Here is what the
30 year Treasury bond has been doing and this week’s interesting little
table:
2001-
5.49
2002-
5.43
2003-
ND
2004-
ND
2005-
ND
2006-
4.91
2007-
4.84
2008-
4.18
2009-
3.89
2010-
4.61
2011-
2.89
2012-
2.77
2013-
3.25
Wait a minute, why
no numbers for 2003, 2004, and 2005?
One month after
the 9/11 attacks, the Treasury 30 year bond is discontinued. When the Treasury
mothballed the 30-year bond in 2001, experts speculated it was trying to drive
down long-term interest rates, which had remained stubbornly high while the
Federal Reserve was slashing short-term interest rates to revive the economy.
When the Treasury discontinued the 30-year bond in 2001, its yield fell 35 basis
points in one day. Why? A shrinking supply of the 30-year Treasury bond caused
increased demand to drive rates down.
The 30 year
Treasury bond is currently at 3.14
percent.
What does all this
mean?
I don’t
know.
Traders
are betting the Federal Reserve won’t raise interest rates any time
soon.
__________________________________________
OFF
BASE
Latent
Semantic Analysis can be used to study a problem that has plagued philosophy and
science since Plato 24 centuries ago.
(If
you are wondering what Latent Semantic Analysis is, you obviously skipped the
congeries of information in the above section. Shame on you).
One
of the deepest, most persistent mysteries of cognition is how people acquire as
much knowledge as they do on the basis of as little information as they get.
Sometimes called "Plato's problem'' or ' 'the poverty of the stimulus,'' the
question is how observing a relatively small set of events results in beliefs
that are usually correct or behaviors that are usually adaptive in a large,
potentially infinite variety of situations. Plato's solution, of course, was
that people must come equipped with most of their knowledge and need only hints
and contemplation to complete it. Latent Semantic Analysis proved that through
the analysis of children’s vocabularies.
In
other words, we all deep down know what’s right and
wrong.
For
example, we all know you can’t steal first base, right? That’s just wrong. As
a matter of fact it is rule 7.08i in the rules of baseball. You Can't Steal
First Base
The
word "travesty" appears only once in the rule book and it has nothing to do with
cheating. The offense in question is one that defies logic: stealing first base
from second.
On
Aug. 4, 1911, Washington Senators infielder Germany Schaefer stole second in an
attempt to draw a throw from the catcher that would allow a teammate to score
from third. When that failed, according to the Society for American Baseball
Research, he went in reverse and stole first, just to elicit a
throw.
Schaefer,
whose legendary antics made him part-ballplayer, part-vaudeville act, wasn't the
only player to attempt to steal first, but he was the last. At some point
thereafter, MLB introduced Rule 7.08i, which deems a runner out if he "runs the
bases in reverse order for the purpose of confusing the defense or making a
travesty of the game."
The
rule has upheld the integrity of baseball ever
since.
Keep
in mind that the root of congeries is heap and this email is definitely a heap
of something.
