Headlines:

 

     "End of Story" for U.S.Capital

       ELA Code of Fair Business Practice

        Consumer Confidence Now 52.7%, Reports BIGresearch

         eLease on the Monitor Daily News

           Bob Rodi Small Broker Re-Visited

 

 

   Equipment Leasing Association April 26 San Francisco meeting Thursday

 

  ---Mention Leasing News and attend at MEMBER PRICE----

 

            also attendees will receive FREE giveaways including:

 

   +ELA Survey of Independent Leasing Companies - a $99 Value!

   + Equipment Leasing and Finance Foundation B2B Report - Net Readiness

          of the Equipment Leasing and Finance Industry - $250 Value!

   +Door Prizes and other Giveaways

 

  Weather is great, too!!! Spring in the City

 

___________________________________________________                      

    

 

    U.S. Capital, Santa Barbara, California  "End of Story"

 

Santa Barbara Sheriff Detective Vic Alvarez said it was "end of story."

 

U.S.Capital principal Ken Nelson turned 40 on Sunday, and committed suicide on Monday, leaving

a note that he could no longer handle the debts that his company and he incurred.

He had been living in hotels, Detective Alvarez reported, driving a 1999 Corvette that

was six month's behind in lease payments.

 

"He died with nothing," Alvarez said. " There were perhaps about another $80,000 in

advance rentals not returned.  He had no assets.  It's really a very sad situation.  He

had no friends, only some relatives to inform about his death."

 

He left a note that was addressed to relatives.

 

This company appeared on the Leasing News Bulletin Board last year as not paying

commissions or returning rental fees. JDR Capital, among other brokers and super brokers, were

having difficulties. There were alleged ties with United Capital

and UniCapital.  He was reportedly a former salesman at Multifund, San Jose, California.

 

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         Small Broker Re-Visited

 

 

  Bob Rodi's summary of the funding environment for the remainder

of the year...I believe that Bob is right on target with his predictions for the balance of

2001.  I expect the credit climate will remain a conservative one as the major funding sources

keep a wary eye on portfolio performance in the short term. The current reduction in funding

sources is reminiscent of the situation that existed in the early 90s.  Just as the stock

market has been subject to painful corrections, the leasing industry is now undergoing a

similar adjustment, with a renewed focus on credit quality and margins.  Based on my past

experience, I anticipate that funding options for brokers will increase once again as the level

of mergers and acquisitions activity subsides and new players inevitably enter the market.

Having spent the last year outside the leasing industry  working with several Internet

companies, I appreciate the opportunity that the leasingnews.org site provides to keep

up-to-date on the leasing world.

 

 Regards,

 Kathy McGurk

 Kmcgurk@aol.com

 

 

 

 

  ( Several readers may be new to Leasing News, as Bob Rodi has been predicting

   what is now happening exactly one year ago in Leasing News. Before we

   started these, Bob was talking about this way before anyone else. Why,

   he was part of Prodigy, the first active internet company over ten years

   ago. His partner left, was active in it, and retired as a multi-million

   when he saw the writing on the wall. Bob has been a broker/lessor for

   many years, was the first I know of to enroll in the Faire/Issac credit

   scoring, is a computer nut like I am, and as an ex-cop in Balitmore, he never

    forgot what it was like to work in the street. Several readers wrote in,

   "So What?" about his latest  predication for Christmas for the broker community.

   I asked him for a reaction: )

 

 

 

I have received a few comments from some people who, I assume, took offense

at my comments regarding small brokers, Superbrokers and the direction of

the dot com/high tech market. Please pass on to everyone that I wasn't just

predicting delinquent accounts in the dot com/high tech sector.  I had

already done that at the beginning of last summer, long before the high tech

scene was the disaster it is now.  I was merely pointing out that the dot

com demise and the accompanying default and high delinquency has a

"downstream" impact on our industry that is just starting to hit us.  This

is why my comments state that there is "no margin for error". 

 

Consider this. There is a liquidity "crisis" in the banking industry.  Just

look at the fallout in the Pacific Northwest in our industry from B of A

cutting off lines of credit to third parties.  I heard from one funding

source CEO that he was tired of reading business plans from brokers and

lessors who were cut off by B of A in that region.  Raising equity for a

leasing company was tough beginning two years ago, right now it's next to

impossible.  If this situation causes mainstream funding sources to "lower"

their risk profile, even a little, then the credits on the margins suffer.

So do the lessor/brokers who package and sell those credits because the

sources that buy them dry up temporarily.

 

Let's take any major funding source who has several divisions and a diverse

set of financial services products.  Third Party business is undoubtedly a

very small part of that.  In a fast paced market, that business represents

enough incremental profit to keep the funding source interested, even though

it may create lower a ROE and represent a higher risk to the overall

portfolio.  In a slower, tighter market, one where costs and risk are being

managed much more tightly, those transactions are cut from the mix because

of the cost of booking and managing them.  This is where the term "high

maintenance" business comes from. In case anyone hasn't noticed financial

services companies are cutting back on "high maintenance" business or

raising the price on that business to "force" it to justify its existence.

A lot of the companies on Kit's list did the high maintenance deals and

didn't price them right.  This is done to get market share, increase sales

for captives, etc. It affects us because, as an example, Sun Microsystems

Leasing is really GE Capital Vendor Services.  They share a building with

Colonial GE. Although Colonial had no part in the Sun program I can almost

guarantee that any problems with the Sun portfolio will affect them

indirectly.  This will be true with any company because management will

shift burdens to more profitable divisions to maximize shareholder value.

If they don't their shares get sold off and the stock price drops.

Management will only tolerate that so long or they'll be replaced.

 

I know this sounds like big picture stuff and small brokers wonder how this

even matters to them.  Those of us that were around in the late 80's and

early 90's will remember the bank owned leasing companies that tanked

because of the real estate debacle.  The bank exposure was enough to have

them catch a cold but the far weaker leasing subsidiaries got pneumonia and

died.  As I recall, they took some third party companies with them.

 

The same thing is going to happen to anybody that had heavy exposure to dot

coms and high tech companies.  The sad thing is that even if you didn't do

this business and you were dealing with a funding source, bank, Superbroker,

etc. who did then your business will be affected by the delinquency and bad

debt in that segment.

 

If you couple the problems in the high tech sector with the general

liquidity crisis you get a pretty bad scenario for anybody that made their

living on the fringes of our industry. It's not a great scenario if you do

mainstream A/B business either, but it's manageable and may even represent a

growth opportunity.  I'm not trying to insult anyone, I'm just trying to

give them a heads up.  It's  just my opinion and you know what everyone says

about opinions. 

 

Bob Rodi

drlease@leasenow.com

www.leasenow.com

1-800-321-LEAS (5327) x101

___________________________________________

 Equipment Leasing Association---Fog City

San Francisco, CA - Thursday, April 26, 2001  Tomorrow

Renaissance Parc 54 (55 Cyril Magnin Street)

 

*Sponsored by GnazzoThill, San Francisco, CA*

 

Join us for a Packed Luncheon Program on these Informative Topics:

 

Complete Electronic Lease Transaction

Charles J. Nabit, Southport Financial, Baltimore, MD

Matthew Shieman, Matsco Financial Corporation, Emeryville, CA

 

See what technologies are involved in an electronic lease transaction - see how it actually

happens! Finally the talk becomes reality! find out who was involved in the first electronic

lease transaction and more...

 

How to Put Together and Store an Electronic Lease

that your Lender will be Willing to Accept as

Collateral Ruth A. Strauss, GnazzoThill, San Francisco, CA

 

What will your lender look for? How do you and should you put together and store an electronic

lease that your lender will be willing to accept as collateral? This presentation will cover the

influence of Revised Article 9 on the perfection of security interests in chattel paper,

proposals for corrective amendments to address uncertainties, and security measures that you

should take in the interim.

 

Legal Update on Digital Signatures

Mark Schreiber, Cooper White & Cooper, San Francisco, CA

 

Need to know the latest on digital signatures? An important legal update on this great step

forward in e-business

 

Schedule: Registration 11:30 a.m.

Luncheon & Presentation: 12 Noon - 2:30 p.m.

 

Registration Fees: ELA Members $65. Non-Members $100

 

However, anyone responding from Kit Menkins Leasing News will automatically receive the member

price! Just note it on your registration form!

 

All Metro attendees will receive FREE giveaways including:

*ELA Survey of Independent Leasing Companies - a $99 Value!

* Equipment Leasing and Finance Foundation B2B Report - Net Readiness of the

Equipment Leasing and Finance Industry - $250 Value!

*Door Prizes and other Giveaways

For further information on this and other ELA Metros go to the ELA web site at

http://www.elaonline.com/events/2001/metros/index.cfm. To register, print the Registration Form

and fax to ELA Meetings at (703) 527-2649. Questions? Call Jeanne Lund at (703) 516-8366.

 

Katie Plona

Director of Membership Equipment Leasing Association

kplona@elamail.com

 

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 Far Be if for Leasing News to Quote the Daily Monitor, but this banner ad has been appearing

for at least a month:

 

eLEASE, INC.

eLease created the capital equipment leasing industry's first automated leasing platform for

developing and delivering lease process automation (LPA) solutions.

Utilizing the eLease Platform™, eLease delivers web-enabled leasing solutions that add leasing

functionality to any Website, lease sales force automation solutions, configurable workflow

solutions for back office lease processing and a B2B marketplace for acquiring capital

equipment

leases and lease lines.

Add leasing functionality to your web site, visit us at www.elease.com

877-408-9090

http://www.elease.com

 

Now, if you call, you will find the number is disconnected, as the company went out

of business when Primestreet pulled their plug.

 

 

eLease first made the Leasing News Lis thttp://www.leasingnews.org/list.htm in

 June of last year:

 

"eLease ( 2/2001 )employees Let Go, Prime Street is "History." (12/2000) purchase by

Primestreet (June/July/2000)senior management changes )"

 

We also confirmed it with a leader in the leasing and internet leasing field:

 

"elease's name (URL) went to Insight in exchange for compensation on elease's lease line.

WiredCapital bought the source code of the existing elease product and hired over three

remaining tech employees of elease. Everything became a fire sale once PrimeStreet hit the

toilet...Definitely elease is no longer an entity"

 

 Kathleen Wiest

 KWiest@WiredCapital.com

 

But I don't think Sue Angelucci is worried about this.  The Monitor Web Site gets

75,000 hits a day, and their daily newsletter reaches 5,000, she tells me.  We

even advertise their ourselves.

 

Molloy Asociates, publishes the Monitor, and is primarily a personnnel specialist in

the leasing industry "With a data base of almost 20,000 leasing professionals nationwide, we’re

able to focus our efforts quickly and efficiently. And, when you add the Career Showcase in both

the Monitor and our new MonitorDaily web site, your job opportunity can be posted as soon as it

becomes available."

 

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Fed Sparks Confidence -- Consumers Feel Better About the Economy

 

    COLUMBUS, Ohio----April 25, 2001--Alan Greenspan's lowering of interest rates has started to

revive consumer confidence according to just released findings from BIGresearch surveys before

and after the announced rate cuts.

 

    Consumers say that their feelings about the chance for a strong economy in 2001 are higher

than prior to the Fed's dropping interest rates by 1/2% on April 18, 2001.

 

    In a study conducted by BIGresearch between April 4-13, 2001, 3400 consumers exhibited the

following response to a question on confidence in the economy:

 

    "Which of the following best describes your feelings about

    chances for a strong economy in 2001?"

 

    Very confident 5.0%

    Confident 39.1%

    Little confidence 47.0%

    No confidence 8.9%

 

    After the April 18th announcement, the responses from consumers

    surveyed from April 20-23, was:

 

    Very confident 5.5%

    Confident 47.2%

    Little confidence 39.3%

    No confidence 8.0%

 

    There was an overall increase in confident/very confident feelings for a strong economy to

52.7% post Fed announcement compared to 44.1% pre announcement -- a solid 8.6% increase in

confidence. However, consumer confidence is still not where it was when BIGresearch asked the

same question during the week of January 17-23. At that time BIGresearch reported that consumer

confidence was at a level of 59.9% (confident/very confident).

    "Consumer confidence certainly is a real measure of trust and hope in our leaders. But

consumer confidence is also highly influenced by TV media exposure," said Joe Pilotta, Ph.D.,

Vice President of BIGresearch. "It will be important to see if the level of confidence will

continue to increase over the next several weeks. BIGresearch will continue tracking consumer

confidence, and analyze the determinants of confidence," said Pilotta.

    About BIGresearch:

    BIGresearch gathers very large samples from the world's largest online community of over 51

million e-mail newsletter subscribers and employs new computer intensive statistical methods to

extract previously unknown, comprehensible and actionable information for crucial business or

policy decision-making. www.bigresearch.com.

    Complimentary top line findings are available at http://www.formsite.com/prosper/info. The