Leasing News

WASHINGTON (AP) In the wake of the accounting scandals that have rocked corporate America, the nation's banks have tightened up on their loan approval procedures, the Federal Reserve reported Monday.

In a survey of 56 large U.S. banks and 20 foreign banks with U.S. operations, the Fed found that the majority of the institutions had moved to tighten standards for making loans and had also increased the frequency for monitoring existing loans.

The Fed's quarterly loan officer survey found that banks' exposure to companies with accounting problems was generally low with 58 percent of those surveyed saying such loans represented less than 1 percent of their business loans.

However, three large U.S. banks reported loans to companies facing accounting problems represented more than 5 percent of their total business loans. The Fed survey did not name the institutions.

Last month, investigators for the Senate Governmental Affairs Committee testified that major investment banks, including Citigroup and J.P. Morgan Chase, had given Enron Corp. multimillion-dollar loans that helped the now-bankrupt company disguise its true financial condition.

Enron shareholders in April added those two institutions and seven other big investment banks to a lawsuit filed in federal court in Houston that accuses Enron of defrauding investors. The banks have denied any wrongdoing.

The Fed survey found that 5.4 percent of the banks reported a ''notable increase'' over the past year in the number of firms submitting erroneous or misleading financial statements in the loan approval process, while 12.5 percent of banks reported ''some increase'' in misleading statements. The large majority of banks surveyed, 80.4 percent, reported no change in the frequency of erroneous or misleading statements.

In response to the accounting problems, banks reported they were taking a variety of actions.

''Most banks reported that they had begun requesting additional financial detail during the approval process, had increased the frequency or intensity of monitoring and were enforcing loan covenants more strictly,'' the Fed said.

On overall business lending practices, the Fed survey, which covered the period from May through July, found that there had been some further tightening of loan standards and terms both for loans to businesses and to households.

But the percentage of banks reporting that they had tightened standards dipped slightly to 23.2 percent, compared to 25 percent who had reported tightening credit standards in the previous three month period.

And one bank reported that it had actually eased standards for business loans, the first financial institution to report easing standards since 1999.

On the Net:

Federal Reserve: http://www.federalreserve.gov

_________________________________________________________

Confirmed---Saddleback Financial Riding Off into the Sunset

“Precom Technology doesn’t want to fund any more leases, “ Saddleback vice-president of operations Rick Skinner said.” “We are winding down the operation,

myself, and a couple of other ‘ops”, as we want a smooth transition.”

He said all fundings would take place, all salesmen, and all bills paid since

Precom Technology purchased the “assets only” of Saddleback. The company

has gone through five owners, perhaps more, since its inception, including once

being part of Unicapital, who is in bankruptcy.

The “liabilities” from the former corporate structure were not included. Mr.Skinner said he and his crew were going to join another leasing company

as individuals, not as Precom Technology, but it was premature to make

the announcement.

“ We want to take care of all our responsibilities, keep our good reputation,

clean up a few deals in the works, and you are right, we will then ride off

into the sunset.”

Saddleback Financial Corporation

625 The City Drive, Suite 140

Orange, CA 92668

Contact: Robert M. Fode 714-938-9500

or fax @ 714-938-9510

http://www.leasingnews.org/bulletin_board.htm#saddleback

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Mike Cingari Back in the Leasing Business???

It appears on July 25^th the former president of MSM Capital, and Colonial Pacific

Leasing, Michael Cingari , with agent Grant Holstrom, formed “Crosswater Capital” in Southern California. 15615 Alton Parkway, Ste 175

Irvine, CA 92618 DNS shows: 4 Marquette Way Coto De Caza, CA 92679

(949)459-2129

Mr.Cingari was not available for a comment.

PETITIONER: MSM CAPITAL CORPORATION

93-1255998

15420 LAGUNA CANYON RD #210

IRVINE, CA 92618

dba NASBA CAPITAL

dba MSM

NUMBER: 0215918

FILED: 08/01/2002

TYPE: Chapter 7

FIRST MEETING DATE: 09/05/2002

HEARING TIME: 10:00 A.M.

HEARING LOCATION: RONALD REAGAN FEDERAL \

BLDG 411 W

ATTORNEY: MICHAEL G SPECTOR

2677 N MAIN ST #870

SANTA ANA, CA 92705

PHONE NO: 714-835-3130

FIRM: MICHAEL G SPECTOR ATT AT LAW

TRUSTEE: JOHN M WOLFE

2603 MAIN ST #600

IRVINE, CA 92614

PHONE NO: 800-436-4646

MSM Capital Bulletin Board Complaint:

http://www.leasingnews.org/Conscious-Top%20Stories/MSM_stories.htm

Former employees now have reportedly over $200,000 in judgments against the company, who they are reportedly appealing to the California Franchise Tax Board for relief and preference among creditors, who include banks, funders, dealers not paid, and applicants who’s advance rentals were not returned.

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The Funding Tree, Southern California---Up-Date

It appears Kendra Bernal, who was served with a cease and desist order from the Department of Corporations will not be appealing the order, and the public hearing

has been cancelled, a very highly reliable source told Leasing News. It is alleged she has enough difficulties with violation of parole to not pursue this.

There was an affiliation with Integrity Group, which the Department of Corporation was involved, but at this time, there does not look like there

will be a hearing on this matter, as Kendra Bernal was part of this group

at one time, and allegedly is out of the equipment leasing business, according

to our highly reliable source..

http://www.leasingnews.org/Conscious-Top%20Stories/fundingTree_stories.htm

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Chuck Brazier---Where is He?

The former director of marketing for Centerport Financial, Colorado, is back in Florida with his family, we are told. He is considering opening a super broker

company with backing from several of his friends. Evidently the marketplace

that is dwindling for brokers has opened up doors for a person who knows

where to “place this deal.”

Chuck is chairman of the United Association of Equipment Leasing Nominating

Committee, and serves on the executive board as immediate past president.

His e-mail is: cebrazer@aol.com

http://www.leasingnews.org/Conscious-Top%20Stories/CENTERPOINT_stories.htm

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Lease Co-op Gains Momentum

Phoenix AZ - OneWorld Leasing (OWL), a cooperative owned by independent lease finance companies, announced that its membership base has grown from six to ten businesses in the last sixty days and that it has formed a marketing alliance with a network of ten cooperatives consisting of approximately 2,200 businesses. The alliance makes OneWorld Leasing and its members the preferred source of equipment lease financing for this growing network of small and medium-sized businesses.

"We also hope to announce a few preferred funder arrangements with banks in the next 30 to 60 days," said OWL Chairman David Stearns, an independent lease professional from the Chicago area. "The handwriting is on the wall… some banks and non-bank funders realize that they do not need a highly-paid sales force to get quality business on their books. It is more efficient for them to utilize pre-screened and seasoned OWL members as a 'channel of choice' to market their leasing products for them. For example, it is the perfect strategy for an understaffed regional bank to gain market share while mitigating risk."

In separate company news, Ray Bradley from First Source Funding (Charlotte NC) was added to the company's board of directors and Chris Raley, First Prime Capital (Florence SC) was named Vice Chairman during the Board's first conference call on July 31st. "Integrity is the oxygen of our cooperative and funding sources are seeing value here. I have been in face-to-face meetings with prospective funders and members and I can confirm that OWL will be a force in this industry," added Raley.

One World Leasing, comprised of member companies committed to honesty and integrity in their dealings with all constituencies, exists to strengthen the competitive positioning of its members by ensuring the effectiveness of Independent Lease Finance Companies as providers of high quality, competitive, and market leading financial products for their clients. OWL members expect to arrange approximately $170 Million in leases this year and expect to grow to $1.5 Billion in lease volume by the year 2007. For more information, please visit: www.oneworldleasing.com

Contact: Richard Selby, OneWorld Leasing, rselby@oneworldleasing.com

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Gamper Elected Chairman of the Board--Proceed to Boardwalk.

LIVINGSTON, N.J.-- CIT Group Inc. (NYSE:CIT) announced that, at its meeting on August 14, 2002, its Board of Directors instituted a number of corporate governance initiatives, including:

* Electing Albert R. Gamper, Jr., CIT's Chief Executive Officer and

President, to serve as the Chairman of the Company's Board of Directors.

With the exception of Mr. Gamper, CIT's Board is comprised entirely of

independent directors.

* Establishing a Lead Director position, and appointing Peter J. Tobin to

serve in such capacity. Mr. Tobin is Dean of the Peter J. Tobin College

of Business at St. John's University and was formerly Chief Financial

Officer of The Chase Manhattan Corporation.

* Adopting Corporate Governance Principles which address, among other

governance matters, director qualification and performance standards,

and the duties and responsibilities of the Board.

* Adopting a revised Code of Business Conduct requiring employees to

adhere to the highest standards of conduct and integrity in their

business dealings.

* Approving committee charters for CIT's Audit Committee and Compensation

Governance Committee, both of which committees are comprised entirely

of independent directors. Mr. Tobin is the Chairman of the Company's

Audit Committee, and the Honorable Thomas H. Kean, President of Drew

University and former Governor of the State of New Jersey serves as

Chairman of the Compensation & Governance Committee.

* Adopting a Securities Trading Policy designed to ensure that CIT's

directors and employees strictly comply with all securities laws

applicable to trading in the Company's securities.

"CIT is committed to maintaining sound corporate governance practices and openly communicating our governance policies to our employees, shareholders, customers and other members of the public," said Chairman, President and Chief Executive Officer Albert R. Gamper, Jr.

The Committee Charters, Company policies, and corporate governance principles described in this release are available for review in the investor relations section of the Company's website at www.cit.com.

The Company also announced that Mr. Gamper and its Chief Financial Officer, Joseph M. Leone, each signed certifications, without qualification, and filed them with the U.S. Securities and Exchange Commission (SEC) as an exhibit to CIT's Form 10-Q for the quarter ended June 30, 2002. These statements, which comply with Section 906 of the recently enacted Sarbanes- Oxley Act of 2002, certify that CIT's Form 10-Q (filed on August 14, 2002) fully complies with the applicable requirements of the Securities Exchange Act of 1934 and the information contained in such filing fairly presents, in all material respects, the financial condition and results of operations of CIT. The Company's Form 10-Q, including the certifications, are also available on the investor relations section of CIT's website at www.cit.com.

About CIT

CIT Group Inc. (NYSE:CIT), a leading commercial and consumer finance company, provides clients with financing and leasing products and advisory services. Founded in 1908, CIT has nearly $50 billion in assets under management and possesses the financial resources, industry expertise and product knowledge to serve the needs of clients across 30 industries. CIT holds leading positions in vendor financing, U.S. factoring, equipment and transportation financing, Small Business Administration loans, and asset-based and credit-secured lending. CIT, with its principal offices in New York City and Livingston, New Jersey has approximately 6,000 employees in locations throughout North America, Europe, Latin and South America, and the Pacific Rim. For more information, visit www.cit.com.

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Financial Federal Corporation Announces Results of the Call of Its 4.5% Convertible Subordinated Notes

NEW YORK----Financial Federal Corporation (NYSE:FIF) announced today the following results of its call of its $91.2 million of 4.5% convertible subordinated notes; $56.2 million of the notes were redeemed for cash at 101.929% of the principal amount plus accrued interest and $35.0 million of the notes were converted into 1.16 million shares of the Company's common stock at the conversion price of $30.15625 per share.

The cash redemption resulted in a $1.1 million after-tax charge that will be recorded in the Company's first quarter of fiscal 2003 ending October 31, 2002 and will have a positive impact on the Company's diluted earnings per share through the elimination of 1.86 million shares, or approximately 9% of the current total shares used in the diluted earnings per share calculation.

Financial Federal Corporation specializes in financing industrial and commercial equipment through installment sales and leasing programs for manufacturers, dealers and end users nationwide. For additional information, please visit the Company's website at www.financialfederal.com.

CONTACT:

Financial Federal Corporation, New York

Steven F. Groth, 212/599-8000

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Intervest Selects Techfi's AdvisorMart Institutional as the Solution for Associates

AdvisorMart Institutional provides data consolidation and performance reporting tool to Intervest associates

DENVER – – Techfi, the Denver-based provider of software, training, support and outsourcing solutions for investment advisors, financial planners and broker-dealers, today announced that Intervest International chose Techfi's AdvisorMart Institutional™, an enterprise-wide, ASP service-bureau for large financial institutions.

Intervest's agreement to use Techfi's AdvisorMart Institutional was implemented through Techfi's alliance with Amicus, a provider of end-to-end business management and communication portals to the financial services industry. This alliance combined Techfi’s account aggregation technology with Amicus' extensive experience in developing simple, seamless access to information and business automation tools for the financial services industry. Intervest can view client data and run reports through their broker-dealer Web site powered by Amicus.

“Techfi brings to Amicus clients the level of service, ease-of-use, and incorporated functionality that our clients demand,” said Rick Johnson, CEO of Amicus. “This implementation is in line with our continued goal of providing web-based, integrated services and applications to our clients.”

Through this partnership, Intervest will make available to its sales associates the AdvisorMart Institutional service as well as the ability to link Techfi's services seamlessly with their Web site. Techfi’s cost-effective solution offers Intervest

associates the functionality they need.

"AdvisorMart Institutional is the web-based service bureau that will provide Intervest with an integrated portfolio management system," said Matt Abar, president and CEO of Techfi. "We believe this agreement will allow Intervest to

take advantage of today’s best portfolio reporting solution."

AdvisorMart Institutional provides data consolidation, portfolio management and client relationship management tools to financial institutions. The AdvisorMart Institutional product uses a combination of proprietary logic and automated technology, with a manual oversight layer that gathers and reconciles institutional level feeds from clearing firms, transfer agents and custodians. Through these components, AdvisorMart Institutional provides financial professionals with the targeted technology applications they need to produce and customize client performance reports.

“Intervest’s associates have been requesting a solution like AdvisorMart Institutional to enhance and grow their business. With Techfi, we now have the tools needed to meet these demands as well as successfully recruit and partner

with new representatives,” said David Smith, president of Intervest International. “Intervest is an innovative company, utilizing technology solutions to enhance associates effectively and to drive the costs out of operating, from order entry to client service. Techfi’s technology fits well within that mold. We can now compete with much larger firms on an equal footing at a fraction of the cost.”

For more information on AdvisorMart Institutional or on Techfi’s suite of financial products, contact Techfi Corporation at 800-298-3863, or online at www.AdvisorMartInstitutional.com or www.techfi.com

About Techfi:

Headquartered in Denver, Techfi Corporation was founded in 1998 and provides software, technology and services to the financial intermediary market. Clients include broker/dealers, investment advisors, financial planners and other

financial institutions. Techfi develops leading-edge technology products and services for the financial intermediary market including: AdvisorMart.com, the industry's first online account aggregation and portfolio management solution;

AdvisorMart Institutional, the private-labeled data aggregation solution for financial institutions; Financial Office, an integrated suite of financial products that includes Portfolio, Trader and Contact and Web Office, an integrated suite of

web-enabled solutions for portfolio management, contact management and account rebalancing and trade generation. Techfi is owned by Advent Software, Inc. (Nasdaq: ADVS). For more information visit their Web site at www.techfi.com

About Intervest International

Intervest International is based in Colorado Springs, CO. The company has over 300 associates in nearly every state and in Europe. Intervest was founded in 1980 and currently has over $1 billion in assets under management. Intervest has

been a leader in technology solutions, reflected by its commitment to bring associates Techfi’s cutting edge portfolio management and reporting system.

About Amicus, Inc.

Amicus, Inc. is the leading provider of end-to-end business management and communication portals to the financialservices industry. Combining content management, web publishing, compliance, reporting, and back-office integration

in a secure, online environment, Amicus' powerful products strengthen and streamline the operations of industry leaders in the broker-dealer, insurance, and banking communities. These include the e-business initiatives of

companies like Jefferson Pilot, National Life of Vermont, Next Financial Group, and CUNA Brokerage Services, Inc.

Headquartered in Austin, TX, Amicus’ products are utilized by more than 30,000 financial planning professionals. Amicus can be reached on the Web at www.amicus.com or via email at info@amicus.com

Contact

Strategic Advantage Public Relations

303.298.9630

Dale Jones ext. 102; djones@strategicadvantage.ws

Kendra Westerkamp ext. 108; kwesterkamp@strategicadvantage.ws

Broker Protection---New Series

National Business Credit Policy

National Business Credit employs an "Agency

Agreement", in which the originator agrees to

represent NBC in all its communications to all

applicants, lessees, vendors and third parties

regarding transactions contemplated or consummated by

NBC.

Here is the section which discusses vendor and lessee

protection:

NATIONAL agrees not enter into any Lease, financing or

other transaction with any Vendor or Lessee introduced

to NATIONAL by Agent, nor knowingly solicit any Vendor

or lessee, for a period of two (2) years following the

termination of this Agreement providing the same

lessee or vendor has not been introduced to NATIONAL

by another representative, third party, or

independent Agent of NATIONAL, or where the Lessee or

Vendor was already an existing customer of NATIONAL

prior to the execution of this Agreement, or where the

Vendor or Lessee has been introduced to Agent by

NATIONAL, or where Agent has expressly granted written

permission to NATIONAL to do so.

Jim Fleming nationalbusinesscredit@yahoo.com

----

Republic Leasing of South Carolina

It is our belief that most wholesale funding sources don’t/won’t market to their clients’ customers and in the few instances where they do, prove to be poor marketers and wholly ineffective competitors. Unfortunately, they can only accept their size, type of credit, and preferred collateral deals, they simply do not have the broad range of sources available to a broker.

As an example, Republic is a typical small ticket “wholesale” funding source with more than 98% of our business originated by broker-lessors. Like many pure third-party funding sources, we have no direct marketing and our credit and funding operation is not set up to process direct applications. Working on any kind of direct business, regardless of the source, is not only painful but very costly and inefficient. If our new parent, NetBank, had any commercial clients (it does not), we would have to re-engineer and re-train to handle retail leasing requests.

Most true wholesale funders are more than happy to honor a broker’s request to include a non-compete or non-circumvention clause to their broker agreement: why wouldn’t they? Like most wholesale funders, we made the decision that third party business is best for us given our resources and capabilities. Do funding sources’ circumstances change? Absolutely. Will some decide to begin direct marketing? Certainly. What can a broker-lessor do to protect against predatory actions? Make certain that the lessee is YOURS through value added service and continual contact.

Having funded leases for more than 1600 broker-lessors since 1988, we receive a couple unsolicited calls a day from prior or present lessees inquiring about additional financing.

In the past, we have referred those calls back to the Active or recently Inactive broker (unless the disgruntled lessee refused the referral, not uncommon). In the rare instances we booked the deal, we sent a check to the broker for 2% of the deal. For the 23 “Terminated” brokers still operating (cutoff for “cause” and we never want to see a deal from again, ever) we would not refer the calls. We have approved one such deal this calendar year.

Processing inquiry calls from existing or former lessees has proven so inefficient that we have stopped accepting direct applications altogether. We merely refer the call to the originating broker, Active or Inactive (we are temporarily not accepting applications) by giving the caller the broker’s most recent phone number and we follow with a heads-up call to the broker. If the broker has been Terminated, we plan to refer the couple such calls we get in a year to an Active or Inactive broker in the lessee’s locale.

Finally, it is our belief that a broker’s competition for a vendor or lessee is not the wholesale funding sources but rather the local banks, numerous direct dial-for-dollars lessors, and national advertising financial giants, all of which contact businesses frequently asking for opportunities to finance equipment. Age old solutions: 1) know your funder, its capabilities and practices; 2) once you have a great client, constantly prove you are their best leasing source.

Dwight Galloway

dgalloway@republicleasing.com

Leasing News reported on the change in de-activating

100 brokers:

http://www.leasingnews.org/archives/July2002/7-31-2002.htm

---------

BOB BAKER CLP

WILDWOOD FINANCIAL

I THINK THE REDUCTION OF REPUBLICS BROKER BASE IS SIMPLE MATH. I DON'T BELIEVE THAT VOLUME IS EVEN AN ISSUE WITH THEM. CONVERSELY EFFICIENCIES ARE EVERYTHING. REPUBLIC HAS EMERGED IN THE INDUSTRY AS THE BEST SMALL TICKET SOURCE IN THE COUNTRY. THEY HELD THE LINE

IN RECENT YEARS WHEN OTHERS WERE APPROVING ANY LESSEE THAT COULD BREATHE ON A MIRROR AND FINANCING ATM'S AND TANNING BEDS.

THEY DON'T CREDIT SCORE BUT LOOK AT DEALS AND SEE IF THEY MAKE SENSE. NOW THEY HAVE RISEN TO THE TOP. WITH THE REDUCTION OF FUNDING SOURCES THEY ARE FORCED TO LOOK AT APPROVAL PERCENTAGES AS WELL FUNDING TO APPROVAL

RATIOS.

THEIR COSTS TO LOOK AT A TRANSACTION HAVE TO BE HIGHER THAN OTHERS THAT ATTEMPT TO LET THE COMPUTER MAKE THE DECISION. SOME BROKERS EVEN WITH GOOD NUMBERS CALL CONSTANTLY AND DRIVE THEM NUTS.

I PERSONALLY AM GLAD TO SEE THEM TRIM THE GRASS. IT MAKES

THEM MORE EFFICIENT FOR THE REST OF US.

---

Charlie Lester

-LPI Financial Services

clester@lpifinancial.com

It is very unfortunate, but the decision by Republic to cut

non-producing brokers was just plain good business to increase Republic's

productivity and improve service to its remaining brokers that are

producing.

In addition, it had nothing to do with their acquisition by

NetBank as you alluded to in a prior article. Knowing Dwight Galloway and

Charles Randall, I would bet the ranch they did not cut a single broker that

relied on Republic for the majority of their business since the entire staff

of Republic is "relationship oriented" regardless of volume funded. You

treat the Republic staff right and they will jump through hoops to make you

a happy camper.

Treat them with disrespect or use them as a stop gap measure

while demanding undeserved attention and their human side will tell you to

put something where the sun does not shine.

When I was cut by Westinghouse in 1988 for lack of volume, my pride was

hurt, but it was the best thing that could happen in the long run since it

taught me that a small broker like Lease Pro and now LPI Financial cannot

survive by "shot gunning" deals to multiple funding sources for the highest

yield. Take it from an old person, a small broker cannot satisfy the volume

requirements of multiple funding sources.

Pick a couple of funding sources

that meet your "client profile" and build an on-going relationship of trust

and respect. If you cannot identify your "client profile" close your doors

and get on to something you know how to do since you will not succeed. It

does not necessarily mean being a niche player, but it does mean you cannot

meet the needs of the whole big bad world.

Since Republic is LPI's major funding source by far and we are a small niche

player, some will take this response as pandering to Republic, but those of

you that know the importance of relationships will know it is standing up

for your friends.

Take care and build those relationships.

---

From: Craig Lysne

craig@cbtleasing.com

I just read your report on Dwight@Republic. I have been in the

business for 15 years and have seen these sort of weak business

policies many times. Colonial, Manifest and others actively

educated and marketed the broker community. I would agree that

certain brokers should be eliminated if their efficiency is so

low as to cause the lender to lose money. Most of the larger

lenders monitored this for you and you were aware of the need to

get back in line. However, letting 100 brokers go at one time

doesn't reflect this issue.

How many times have we seen a lender build his business on the broker community, only to drop most of them when they reached a comfortable market share?"

Let's blame the broker's for not producing enough, even though your marketing department is truly at fault for nor soliciting good business from the broker community.

Hey Republic, I have a documented millionaire that also makes a million a year and wants a $150,000 lease (verifiably true), do you want the deal or not

because I can't give you some sort of volume per month.

Give me a break!

Craig Lysne

CBT Leasing, Inc.

---

(Name With held )

I read with interest the comments about Republic leasing (SC). We have been a broker with Republic for years. We received the same letter you did, but NO phone call. I was sorry to get the news, but understand business is business. However, after years of a good relationship, with an almost perfect portfolio performance, they could have been more courteous. They could have called, instead of "breaking up" by fax.

The funders with class, the ones who understand the fact that cycles come and go - those funders are sticking with us during these tougher times. The ones who, like Republic, are arrogant, are quick to forget the times they call month after month asking for increased volume. Well, those times will return again. When they do, my volume will go to the lenders who were loyal to me during these times.

( Name With held )

Their decision to release a large group of senior staff last year has REALLY came back to haunt them& that was a very bad move.

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United Association of Equipment Leasing---Annual Fall Conference & Exposition

Final 40 Days Left Til…Don't Be Left Out!

Annual Fall Conference & Exposition 2002

San Diego, California

October 3 – 6, 2002

Book Your Room Now! Block Limited…

Sheraton Hotel & Marina – San Diego

1380 Harbor Island Drive

San Diego, CA 92101

Tel: 619-692-2200

Fax: 619-692-2363

www.sheraton.com/sandiegomarina

Hotel Registration Call 1-877-734-2726 (ask for UAEL rate)

Golf Tournament – Register Online www.uael.org

Spouse / Guest Activity:

Spend the day at the famous San Diego Zoo!

(b.fisher@firerockcapital.com)

VISIT THE UAEL WEBSITE FOR MORE INFORMATION!

WWW.UAEL.ORG

---------------------------------------------------------------------------------------------------

Former HPSC Official Charged With $4.7 Million Fraud

By Edmond Lococo, Bloomberg

A former executive of HPSC's American Commercial Financial subsidiary was charged by the Securities and Exchange Commission with diverting more than $4.7 million through accounting fraud.

Kevin Morrison of West Hartford, Connecticut, was charged in a civil suit filed in the U.S. District Court for the District of Massachusetts with providing fictitious financial reports on American Commercial to senior HPSC management and its outside auditors to hide the diversion, said Madeleine McGrath Blake, SEC's associate district administrator.

Morrison, a former executive vice president of American Commercial who resigned in May, has an unpublished home phone number and couldn't be contacted. His attorney, James Cowdery, didn't return a call seeking comment.

Health-care equipment financing company HPSC overstated its net income and earnings per share by between 4 percent and 112 percent between Dec. 31, 1997, and March 31, 2002, as a result of Morrison's alleged fraud, McGrath Blake said.

HPSC has completed its formal investigation into the matter and issued a restatement of financial results for the period, said president and chief operating officer Raymond Doherty. Doherty declined to comment further on the case.

Santana Row fire latest economic blow to Silicon Valley

(We could see the smoke and smell the fire from our office, traffic jam for

several hours as major intersections, including freeway closed .Editor)

By Paul Elias, Associated Press

The Santana Row fire was the last thing Silicon Valley needed.

The planned 42 acres of upscale housing and shopping conceived at the height of the dot-com boom was one of the most ambitious projects of its kind in the United States. Even as the project ran into troubles attracting tenants as the economy soured, government and business officials still had high hopes that its opening would help ease the economic malaise over the region.

''It was a boost to our psyche that we were poised for an economic recovery,'' said Jim Cunneen, chief executive of the San Jose Silicon Chamber of Commerce. ''I am devastated.''

Hundreds of job seekers had lined up at a job market last month, hoping to land one of the estimated 1,000 jobs that would ultimately open at the mall. The Santa Clara County unemployment rate hit 7.6 percent in June and some 77,000 residents are out of work.

''This was going to be a very significant employer and generator of business,'' said Paul Krutko, San Jose's economic development director. ''It's a real shame.''

Krutko said he didn't have any estimates of how much revenue the project was expected to generate, but said the sales tax contribution to the city was expected to be ''in the millions'' annually.

''I was really counting on this,'' said Chris Yeo, who planned to open his third restaurant, Straits Cafe, in the mall next month. He said it appears the spot for his restaurant was untouched by fire, but its opening will undoubtedly be delayed. Yeo planned on employing 100 people at Santana Row.

Despite the towering flames, only one of the upscale development's nine buildings was affected, said Tom Miles, a spokesman for project developer Federal Realty Investment Trust.

The first, $500 million phase of Santa Row was supposed to open this month. But because it didn't find tenants as quickly as it hoped, the grand opening was pushed back to Sept. 19.

Now it's unclear when any of the stores will open.

''It was a significant retail development and it's an awful fire,'' said David Vossbrink, a spokesman for San Jose Mayor Ron Gonzalez. ''But San Jose is a large community and we are resilient. Our future is not dependent on this project.''

------------------------------------------------------------------------------------------------

After terror attack, city economy struggles to rebound

By Timothy Williams, Associated Press

NEW YORK (AP) Brian Palmer knew opening a restaurant was not for the faint of heart, and the risks became even more formidable when terrorists struck the World Trade Center just before his Harlem bistro was scheduled to open.

Native opened two months late and Palmer was relegated to cooking salmon and steaks on hot plates because utility workers and contractors were busy at the trade center. With banks skittish, he faced financing problems; with tourism plummeting, he watched his customer base erode.

Now, Palmer is nearly out of money.

His struggles are testament to the destructive arc of a disaster that killed more than 2,800 people, poked a giant hole in the city's economic bubble and contributed to everything from city government's $5 billion deficit to troubles on Broadway.

Economists estimate the attack cost the local economy more than $80 billion from property damage to lost tax revenue and some 97,500 jobs. Only about 40,000 of those jobs are expected to be recovered by the end of 2003, according to the New York City Partnership, a business advocacy group. New York's unemployment rate is now 7.7 percent.

''The economy is very fragile,'' said Kathryn Wylde, president and CEO of the business group. ''It has been improving, but the improvements have occurred slowly.''

Even before Sept. 11, the economic dynamo that created 160,000 jobs in 1999 and 2000 had slowed, with some companies resorting to hiring freezes and layoffs. The city faced deficits due to a faltering stock market and tax cuts enacted during the boom years of former Mayor Rudolph Giuliani.

But tourism was enjoying another record year. SoHo clothing stores and Tribeca restaurants were doing turn-away business. And despite the slowdown, Wall Street the city's economic motor was forecasting more than $8 billion in annual profits.

The attack changed everything. Potential visitors stayed away, sending tourism skidding 15 percent. Hotel occupancy and business spending each dropped 14 percent. Tourism, a $25 billion industry, has only begun to recover in recent months.

The downturn was a particularly blow to retail sales and cultural activities, including Broadway.

After unprecedented success in the 1990s, Broadway shows suffered as tourists bought discounted passes instead of full-priced advance tickets. Several successful shows have closed because of the uncertainty of advance sales, and some producers are wondering whether investing in Broadway makes sense.

''If this is permanent, it's really going to change the fundamental finances of many shows,'' said Jed Bernstein, president of the League of American Theaters and Producers.

A shortage of out-of-towners hurt institutions from the Metropolitan Opera, which watched audiences decline by 7.5 percent, to the Whitney Museum, which laid off 14 people and canceled an Eva Hesse retrospective.

At the Metropolitan Museum of Art, attendance has dropped 20 percent. ''We were impacted hugely,'' spokesman Harold Holzer said. ''Attendance plummeted. Now it's building back slowly. We are optimistic with fingers and toes crossed.''

Wall Street, which had dozens of companies headquartered in the twin towers, shed 26,500 jobs after the attack an alarming figure given that each Wall Street job supports 1.2 other workers, from bankers to bike messengers.

Analysts say securities and banking firms are unlikely to return to lower Manhattan with the number of people they employed before Sept. 11.

The commercial vacancy rate downtown has more than doubled to 15.2 percent in recent months despite the loss of 11 million square feet of business and retail space in the trade center.

Morgan Stanley Dean Witter recently announced it will move 2,000 jobs to Westchester County, north of the city. And Cantor Fitzgerald, which lost 658 employees in the attack, has hired just 150 people. All firms are being buffeted by the stock market.

The city and state have offered millions of dollars to businesses with more than 200 employees in return for a pledge to stay in lower Manhattan for at least seven years. But the program has had mixed success, with many firms declining public aid that would also bar them from imposing extensive layoffs.

''The fundamental problems facing lower Manhattan are not solvable with handouts,'' said Mitchell Moss, director of the Taub Urban Research Center at New York University. For example, the attack destroyed key subway and commuter transit hubs, making travel difficult in lower Manhattan.

During the past few months, however, the city has added 10,000 jobs and federal financial incentives have drawn people to buy and rent apartments downtown. There is evidence of recovery in unlikely places, too.

The Ritz-Carlton Hotel opened in January, its 298 rooms starting at $465 a night. Rooms to the south feature a view of the Statue of Liberty. Rooms to the north look out on the trade center site.

Eight months later, the hotel is averaging more than 75 percent occupancy, higher than the citywide median.

Above the hotel, condominiums starting at $600,000 are selling again. Though 15 buyers dropped out immediately after Sept. 11, the building made up the sales between March and July.

''Obviously, 9-11 did put a damper on our program,'' said spokesman Matt Hall. ''We took a big step backward. But now we're back again.''

Uptown in Harlem, Palmer is still looking for signs his bad luck will change. Contemplating the future, he just shrugs.

''When the money's gone,'' he said, ''the money's gone.''

On the Net:

New York City Partnership: http://www.nycp.org

New York government: http://www.nyc.gov

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News Briefs---

Agilent posts wider loss in fiscal third quarter

SAN JOSE, Calif. (AP) Agilent Technologies Inc., a maker of test and measurement equipment, reported a larger-than-expected third-quarter loss Monday because of weak demand and disruptions caused by the installation of a companywide management system.

---

Continental recalls half a million tires from Ford SUVs

WASHINGTON (AP) Continental Tire North America announced Monday that it is recalling more than half a million tires installed on Ford Motor Co.'s sport utility vehicles after some of the tires lost their tread.

---

Oil Prices Near $30 a Barrel, a 15- Month High

The price of crude oil rose to its highest level in 15 months, surging 50 percent this year and may already be a drag on the weakening economic recovery.

---

Bush not planning to use emergency oil reserves

CRAWFORD, Texas (AP) As oil prices inched closer to $30 per barrel on Monday, a White House spokesman said President Bush had no plans to tap into the nation's emergency oil stockpile.

---

Airports send letter to Senate urging baggage-screening delay

WASHINGTON (AP) Managers of 133 airports that handle three-fourths of the nation's air travelers asked the Senate on Monday to extend the year-end deadline for screening all luggage for bombs.

Museum attendance in Paris down 8.5 percent in first half of 2002

PARIS (AP) France is the world's No. 1 travel destination, but tourism officials are fretting over new numbers that show visits to the nation's top attractions still sagging in the aftermath of the Sept. 11 terrorist attacks.

WASHINGTON

Nine Acela Express trains returning to service: Amtrak entered the new work week with nine of its high- speed Acela Express trains back in service, welcome news after a stressful several days for the passenger railroad and its riders.

49ers 12, Broncos 7

(Many 49er fans were not impressed with the play calling; however, 49er Coach Mariucci was very lucky in a "replay call," while Denver Coach Shannihan was not in his; 49er defense was not impressive; back-up QB Tim Rattay was not

very agile, 49er first string players were in for most of the first half of the game, as it was "Monday Night Football" and they had to win this one. Denver back-up QB Steve Beuerlein looked very professional. On the TV side, John Madden seemed to be much more comfortable than last time, fitting in very well with Al Michaels. A definite improvement over last year’s three some, in our TV group

consensus.

Here is AP reporting of the game:)

JOHN MARSHALL, AP Sports Writer

DENVER (AP) --

Terrell Davis got his wish to walk away on his own terms.

Terrell Owens had seven catches for 123 yards as the San Francisco 49ers beat the Broncos 12-7 Monday on the night Denver's fans said goodbye to Davis.

A fan favorite who holds or shares 56 team records, Davis walked out of the tunnel at Invesco Field at Mile High for the final time to raucous cheers from a near-capacity crowd of 69,343.

"There are so many things going through my head," said the 29-year-old Davis, who will almost certainly end his career after seven seasons. "My emotions went from sad to excited to sad again. It is what I expected. Denver is my home, and it was good to show the fans what it meant for me to be here."

Davis, who will be placed on injured reserve Tuesday due to chronically injured knees, waved to the fans and gave a "Mile High Salute", which he made famous during the Broncos' Super Bowl- winning seasons in 1997 and 1998.

He was mobbed by teammates as he took the field and shared a long embrace with tight end Shannon Sharpe as a video tribute played on the scoreboard.

"He's a great player and a great human being," San Francisco coach Steve Mariucci said. "Certainly, the Denver Broncos will miss him, but the league will miss him, too."

San Francisco held Denver to 242 total yards to win for the first time in three preseason games. The 49ers scored on four field goals, three by Jose Cortez.

Denver (1-1) moved 80 yards for a touchdown on its second drive, but crossed the 50-yard line four times the rest of the way.

"I liked the way we played in the first half," Mariucci said. "Our defense gave up one long drive and score, but other than that we played well."

Rookie Clinton Portis showed signs that he might be ready to take over for Davis.

Portis, the Broncos' second-round draft pick, had 45 yards on Denver's first scoring drive and capped it with a 1-yard dive over the right side. He had eight carries and caught a 5-yard pass during the 12-play drive.

Portis finished with 43 yards on 11 carries after getting 57 yards against Chicago last week.

"As everyone can see, he has great running skills," Denver coach Mike Shanahan said. "He made a number of big plays and I was impressed with him."

Owens, coming off his second straight Pro Bowl season, showed off his playmaking abilities in the first half before sitting out the second. He made would-be tacklers miss and got a good chunk of his yardage after the catch.

Owens caught a 48-yard pass from Jeff Garcia to set up San Francisco's first score, a 27-yard field goal by Cortez in the first quarter, and zigzagged his way through Denver's defense for a 16-yard gain in the second.

"I am just trying to work on my game and definitely be more patient on my routes," Owens said. "Those are the type of things I work on in practice and I try to carry it over to the game."

Ashley Lelie, Denver's first-round pick, was also sharp.

Lelie, who started in place of injured receivers Rod Smith and Ed McCaffrey, caught five passes for 56 yards. He adjusted to catch a pass thrown behind him for a 13-yard gain in the first quarter, and had a tough fingertip grab for 12 yards in the second.

Garcia played the first half after playing just two series the previous game. He was 11-of-18 for 149 yards.

Tim Rattay, who's battling Brandon Doman for the backup spot, took all the snaps in the second half and completed his final nine passes to finish 9-of-10 for 91 yards.

"I liked the competitive spirit of this team from all the players," Garcia said. "I saw a lot of improvement, and there's definitely room for improvement in a lot of areas as well."

Denver quarterback Brian Griese, who also played a half, was 8-of-13 for 73 yards and an interception. Reserves Steve Beuerlein, Jarious Jackson and Todd Husak were a combined 8-for- 21 for 67 yards and an interception.

"Offensively, we had one good drive, some flashes, but it was not what I had hoped to see," Shanahan said. "In the second half, our second, third and fourth team offense was very much out of sync. We've got to step up in that area."

Denver kicker Jason Elam sat out after straining his right hamstring before the game. Broncos defensive tackle Lional Dalton sprained his right ankle in the first quarter and didn't return.

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