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Monday 24, 2001 UAEL Memo
Re: Appointment of Joe Woodley,CLP as CEO Looking
for Signs of Recovery- Classified Expands to Include: Legal Services Available ALERTS and FLAGS ( special by Barry Reitman, Keystone Leasing ) ### denotes press release _______________________________________________________________________ RE: Appointment of Joe Woodley, CLP as CEO TO: Kit Menkin FROM:
President Chuck Brazier, CLP. The UAEL Board of Director's selection of Joe Woodley, CLP is part of UAEL's continued thrust to provide its membership with the best possible leadership and is but one piece of a full revitalization of UAEL beginning during the end of 2000. At the end of 2000, we empowered a search committee to find a Managing Director. Joanie Dalton stepped up and won the support of the committee as well as support of the Board of Director's. Now we have the opportunity to tap the experience of a long-time member and Past President in the newly appointed position of CEO to further develop not only the UAEL focus but also the staff. Joe Woodley, CLP has the full support of the staff and the Board of Directors. The members who know him personally know he will do the job successfully. He will make a tremendous difference in 2002. Also, this will allow the Board of Directors more time to communicate with and be involved in the membership needs. As incoming President, Bob Fisher, CLP said in Leasing News; "Challenges are met with action and not fear of the future." While he was not writing about this subject, his statement clearly explains the fundamentals of why we chose a person with such rich leasing experience as Joe Woodley, CLP. During my tenure, we worked diligently to build a more stable UAEL foundation. Now, with Bob Fisher, CLP as President, Joe Woodley, CLP as Chief Executive Officer, Joanie Dalton as Chief Operating Officer and Bill Grohe as Director of Membership, the members will reap the rewards of the experience and history they each have to offer. UAEL has been very successful offering the best education, the development of the CLP Program, and providing a forum where each member firm has the right to vote on issues. UAEL will continue this success because of the strong foundation that has been established which allows the Executive Committee and Board of Directors more time to develop new and exciting educational events, networking opportunities and ways for members to get involved. Remember, "It's All About Success: Education, Networking and Involvement". -------------------------------------------------------------------------------------------- Legal Services Available New Feature at www.leasingnews.org Leasing News is read not only by people in the industry, but those seeking information or having a complaint about a lease. They find us by searching the web. We also have reporters, department of justice investigators, deputy district attorneys, department of corporation investigators, who are regular readers or find out web site, seeking information. Lessees and dealers who have difficulty also find us. Perhaps the attorney classified will also help them. http://65.209.205.32/LeasingNews/PostingFormAttorney.htm Attorney Posting--- Attorney---This is for Attorneys to post their legal services. Only members of a non-profit leasing association may list their firm. This insures the firm abides by the standards of conduct and also indicates their specialty is the leasing industry. If there are other offices or specialties, please mention in the 25 words allowed to describe the firm and services available. ________________________________________________________________________- ALERTS--- PC AUDIO FX and/or CHARLES ELVIS MILES and/or IMAGE MAKERS OF AMERICA (vendor), all of Orlando, Florida. Be very careful. If more information is needed, contact kitmenkin@leasingnews.org and we will refer you to a "well-informed source." --- IOS, no relation to ICON of New York City and San Francisco Republic leasing and Affiliated have cut IKON off as a vendor. So have we. We recently caught one of their sales people, in conjunction with IOS Capital, creating an addendum changing our lease terms. In this case, we sent doc's for a 5 year term to a municipality and were not informed they could only do 12 months by law. IOS the finance division of IKON subsequently created an addendum that according to the municipality, allowed them to renew our lease every 12 months at their option. The only reason we learned of this is because the municipality uses P.O.'s which had a clause inserted in the P.O. that referred to an addendum. When we asked the Muni about the addendum they thought we knew. The addendum was created by IOS. Also, the equipment was not the advertised value. They had built in per copy pricing, warranties, paper expense etc etc. We will no longer work with them either. I recommend that anyone doing a copier transaction talk with the lessee about any potential side agreements. Also note, in our past working relationship with IOS, they required that we not talk to any customer and we subsequently refused to do business with them because of that clause. However, we thought IKON was different and unfortunately there are representatives of IKON that do not conform to the rules. BE CAREFULL. Paul VENDOR: "S P & T Enterprises" 3824 University Ave, Ste. 200, Riverside, CA 92501 Vendor brought us a $38K transaction that "had to be" corp only. (Got the customer approved for $25K, corp only. Has not/will not fund) Here's what we have now found out. Vendor
claims to sell "copy machines, faxes, computers & software" Name With Held -- www.keystoneleasing.com/scam_flags.html
The FLAGS
are just that, reasons to check further; The SERIOUS FLAGS are virtually
always a problem. We received the actual SSN's of the CEO and CFO of Mattel Toy Company on an application for a $74,000 computer deal. We notified Mattel's internal security department and the FBI. >> Referrals
from people or businesses you don't know. FLAG One of the first attempted scams that I fielded was a $50,000 copier-duplicator for a business in a Hasidic community. I was comfortable with the deal, even throwing in some Yiddish phrases in phone conversations with the friendly applicant. Then I called his first listed trade reference, Tony's Trucking. "Hullo, Tony's Truckink, vat cud I do for you?" Within a day we had documented that the bank reference was another phone in the applicant's office. We notified the New York State Banking commission and the local prosecutor. >> Last minute change in :ship to:" SERIOUS FLAG Many scams use actual credit information on substantial companies, including the true address. Then, at the last minute, ask the vendor to ship to a "satellite office." This is particularly problematic, because it can be attempted with a strong, real applicant and a legitimate vendor. >> Application for $49,500, $74,840, or $99,345: FLAG Many bad guys believe that being just under the "app only" limit (or other perceived limitation) makes you stupid. 07/16/01: The following flags were sent in by a highly respected member of the community who chooses to be anonymous here: >> The vendor is related to the customer: SERIOUS FLAG ("We always buy from our affiliate/subsidiary/division/brother-in-law"): >> The
vendor has no fixed address: FLAG >> The deal comes from Southern California, Texas, Louisiana or Florida: FLAG Obviously most deals are straight, but I watch deals from these areas more closely. Some of the biggest scams, like Consolidated Allied and Freda Trading, came out of California. >>Selected
industries, like the rag trade: FLAG >>>When you get an unsolicited deal from someone you don't know. www.keystoneleasing.com/scam_flags.html ( Courtesy of Keystone Leasing, Barry Reitman ) ------------------------------------------------------------------------------------------------ Financial
Capital Makes it Official official press release ### ###################### ####################### IRVINE, Calif., / -- Fidelity National Financial, Inc. (NYSE:
FNF), the nation's largest provider of title insurance and real estate
related products and services, today announced that it has discontinued
the origination of small-ticket leases by FNF Capital, its wholly-owned
leasing subsidiary. The Company will take a one-time, after-tax charge
of approximately $8 million in the fourth quarter to cover costs associated
with this discontinued business. FNF Capital will continue to service
those leases currently in the portfolio. FNF originally entered the
leasing business through the February 1998 acquisition of Granite Financial,
Inc, which was renamed FNF Capital. "We have decided that it is in our best interest to focus our efforts on our title insurance and real estate related services business and other lines of insurance," said William P. Foley II, Chairman and Chief Executive Officer. "While the small-ticket leasing operation does provide some level of revenue diversification, it also requires significant management focus that can be better utilized in continuing to strengthen our core real estate business." Fidelity National Financial, Inc. is the nation's largest title insurance and diversified real estate related services company. The Company's title insurance underwriters -- Fidelity National Title, Chicago Title, Ticor Title, Security Union Title and Alamo Title -- together issue approximately 30 percent of all title insurance policies nationally. The Company provides title insurance in 49 states, the District of Columbia, Guam, Mexico, Puerto Rico, the U.S. Virgin Islands and Canada. In addition, Fidelity, through its principal subsidiaries, performs other real estate-related services such as escrow, flood certifications, real estate tax services, credit reporting, property appraisal services, exchange intermediary services in connection with real estate transactions, loan portfolio services, field services, default services, foreclosure publishing and posting services, reconveyances, home warranty insurance and real estate information and technology services. More information about the Company can be found on Fidelity's website, located at http://www.fnf.com . #### ######################### ############### _________________________________________________________________________ Monarch Capitals Sells Assets/Liabilities to Interchange Financial Services Anthony S. Abbate, President and Chief Executive Officer of Interchange Financial Services Corporation ("Interchange") (NASDAQ: IFCJ), whose principal subsidiary is Interchange Bank ("Bank"), reported late Friday that the Interchange has signed a definitive agreement with Monarch Capital Corporation ("Monarch"), to purchase substantially all of Monarch's assets and liabilities. Monarch is a leasing and financing company located in West Caldwell, New Jersey, which was formed in 1986 by its sole shareholder James Jenco. Monarch provides leasing and financing of capital equipment principally to middle market companies. As part of the transaction, James Jenco will join Interchange as President of the Bank's equipment lease financing subsidiary, Interchange Capital Company, L.L.C. ("ICC"). In addition, Monarch's employees, who are instrumental to the success of Monarch, will also join ICC. "James Jenco brings with him almost 25 years of leasing experience and along with his staff will assist Interchange's leasing unit (ICC) to more rapidly achieve its strategic objectives", said Mr. Abbate. Mr. Jenco also stated, "I welcome the opportunity to join the Interchange family to facilitate the Bank's equipment leasing business. It will enable us to enhance the array of products and services available to the customers of Monarch while helping expand the customer base of the Bank". The aggregate lease portfolio to be purchased is approximately$15 million and is scheduled to close in January 2002. The deal is expected to be accretive to Interchange's earnings in the first year. The Company is a $812 million-asset commercial bank holding company, whose principal subsidiary is Interchange Bank. The Company is a financial intermediary that, along with traditional banking, offers a broad range of services including 24-hour, 7-day- a-week online banking and bill paying services through InterBank. Customers can also do their stock trading, obtain insurance services and apply for a loan through the Bank's web site. Mutual Funds and Annuities are offered through the Company's Investment Services Program. The Interchange Bank-Line Call Center enables customers to open new accounts over the telephone; and customers can do basic banking transactions over the telephone with Interchange Bank-Line. The Business Class Banking Account offers checking with a variety of extra services including Interbanking - a proprietary product, which allows the business customer to do routine business banking right from their office PC. And through our subsidiary, Interchange Capital Company, L.L.C., we are able to extend cost- effective equipment leasing solutions for a variety of expansion and upgrading projects. The Bank is headquartered in Saddle Brook, New Jersey and has 17 branch offices located in Elmwood Park, Franklin Lakes, Garfield, Hillsdale, Little Ferry, Lodi, Montvale, Oakland, Paramus, Park Ridge, Ramsey, River Edge, Rochelle Park, Saddle Brook (2), Waldwick and Washington Township. Further information about the Bank, its core values and focus, and its products and services can be found on our web site at www.interchangebank.com. Our web site also has a direct link to the NASDAQ Stock Market that enables you to keep informed of the daily quotes and market activity for the Company's stock, which trades under the symbol IFCJ. Sites of
Reference: ### ########## #########################################3 Randy Freeman Joins AAB Business Finance To Go After National Accounts Randy Freeman joins ABB Business Finance as Vice President of Business Development, responsible for pursuing the company's national account opportunities across the various industries served including the IT, telecom, and industrial equipment industries. Randy brings to the company over 20 years of leasing experience with over 10 years in the technology industry. Prior to joining ABB, Randy served as Vice President of Business Development for Copelco Capital, Inc. In addition, he has served in senior business development roles for companies such as JLA Credit Corporation and AT&T Capital. Also joining ABB Business Finance are Ron Bell and Anthony Salm as the company's Business Development Managers for the Mountain States and Southwest regions, respectively. Ron has over 10 years of experience in the leasing industry, most recently with Conseco, Inc.. Anthony, having more than 5 years of leasing experience, had been with such companies as Fidelity Leasing and Tokai Bank. About ABB Business Finance ABB Business Finance (http://www.abbbusinessfinance.com), a unit of ABB Financial Services, serves small and mid-sized businesses with a comprehensive array of flexible leasing products and financing services. ABB Financial Services has more than $20 billion in managed assets and over 1,100 employees operating in 20 countries. Operations include treasury and insurance services, leasing and financing, structured finance, infrastructure project development, and financial consulting. About ABB Group ABB (http://www.abb.com) is a global leader in power and automation technologies that enable utility and industry customers to improve their performance while lowering their environmental impact. ABB has 160,000 employees in more than 100 countries. The company's U.S. operations employ more than 15,000 people at manufacturing and other facilities in 40 states. ( Courtesy of ELAonline.com ) #### ################################### ############## HotJobs sets deadline for Monster.com's owner to top Yahoo takeover bid By Michael Liedtke, Associated Press SAN FRANCISCO (AP) Online help-wanted site HotJobs.com Monday gave Monster.com's owner 72 hours to top a $436 million takeover bid from Yahoo! Inc., setting the stage for a bidding war between rival suitors that run two of the Web's most popular destinations. New York-based HotJobs told Monster.com's parent, TMP Worldwide Inc., that it will call off their six-month-old merger agreement unless TMP can beat an unsolicited $10.50-per- share bid made by Sunnyvale-based Yahoo less than two weeks ago. HotJobs set a 9 a.m. EST Thursday deadline for TMP to improve its all-stock offer, which was valued at $9.11 per share based on TMP's closing price Monday on the Nasdaq Stock Market. If TMP doesn't sweeten the pot, HotJobs said it will enter into formal negotiations with Yahoo. Jilting TMP would cost HotJobs $17 million to cover a merger termination fee and other expenses during the six-month courtship. TMP will respond to HotJobs' ultimatum ''at an appropriate time,'' spokesman David Rosa said. Industry analysts have anticipated a bidding war for HotJobs since Yahoo unexpectedly entered the fray with its Dec. 12 bid. Investors are betting that HotJobs will be sold for more than Yahoo's stock-and-cash offer of $10.50 per share. HotJobs' shares gained 26 cents to close at $10.73 Monday on the Nasdaq. TMP climbed 40 cents to close at $41.50 and Yahoo fell 27 cents to close at $16.65. Yahoo's pursuit of HotJobs caught some analysts off guard because the site ranks a distant second to Monster.com in the online recruitment market. HotJobs has a database of about 5 million resumes while Monster.com has 14 million resumes. The HotJobs bid is part of Yahoo's effort to rebound from a yearlong financial slump through the addition more revenue- generating features at its popular Web portal. HotJobs charges employers and recruiters to list job openings and collects fees for access to its resume database. The company also sells human resources software. Like many other dot-coms, HotJobs remains unprofitable. Through the first nine months of the year, HotJobs lost $21.2 million on revenue of $92.6 million. Yahoo runs the third most popular Web site behind AOL and Microsoft, according to Jupiter Media Metrix. Monster.com ranked 39th in the Jupiter Media Metrix's latest rating. Although it's not as well known as Yahoo, TMP Worldwide is the larger company with $1.1 billion in revenue through the first nine during the same period. months of the year. Yahoo generated $528.5 million in revenue As of Sept. 30, Yahoo had $346.1 million in cash versus TMP's $317.6 million. On The
Net: http://www.hotjobs.com h _____________________________________________________ Weakest Performance in a Decade By Jeannine Aversa Associated Press Writer WASHINGTON -- The U.S. economy turned in its weakest performance in a decade in the third quarter, shrinking at an annual rate of 1.3 percent, an even bigger drop than the government previously estimated. The revised reading of gross domestic product released by the Commerce Department on Friday showed that consumers were frugal, companies sharply cut investment and businesses slashed excess stocks of unsold goods - all factors contributing to the dismal showing in the July-September quarter. GDP is the total output of goods and services produced within the United States and is considered the broadest measure of the economy's health. The government previously estimated that the economy contracted at a rate of 1.1 percent in the third quarter and its initial estimate pegged the decline at a 0.4 percent rate. The revised 1.3 percent rate of decline was based on more complete data and marked the weakest performance since the economy contracted at a rate of 2 percent in the first quarter of 1991, when the country was suffering through its last recession. Some analysts believe the current quarter will be even weaker, with the economy shrinking at a rate of at least 1.5 percent. Friday's report showed just how dramatically and quickly the economy - which has been stuck in a more than yearlong slump and was dealt a severe blow by the Sept. 11 terror attacks - has deteriorated. In the first three months of this year, the economy grew at an anemic 1.3 percent rate and in the second quarter it expanded by a barely discernible 0.3 percent growth rate. The National Bureau of Economic Research recently declared that the country had tipped into recession in March, ending the longest expansion in U.S. history and beginning the first downturn in a decade. To prevent the economy from sinking deeper into recession, the Federal Reserve has cut interest rate 11 times this year, driving borrowing costs for consumers and businesses down to the lowest point since November 1965. On Capitol Hill, partisan wrangling over how best to revive the economy snuffed out the prospects for an economic stimulus package this year. Much of the economy's slump has come from a sharp pullback in capital spending. Friday's GDP report showed that business investment in new plants and equipment fell at a rate of 8.5 percent in the third quarter, following an even steeper 14.6 percent plunge in the second quarter. Consumer spending, the lifeblood of the economy, grew at a 1 percent rate in the third quarter, the weakest showing since the first quarter of 1993, and a big pullback from the 2.5 percent growth rate posted in the second quarter. Consumer spending accounts for two-thirds of all economic activity. Businesses' inventory reduction totaled a record $61.9 billion in the third quarter, another factor in the third-quarter's weak performance. In the long run, it's positive for businesses to get rid of excess stocks of unsold goods because it sets the stage for ramped up production in the future. But the process subtracts from the GDP. Friday's report also showed that after-tax profits of U.S. corporations fell at a rate of 6.8 percent, reflecting the impact of the terror attacks and the sour economy. In the second quarter, profits declined at a 1.7 percent rate. _______________________________________________________________________________ Streamlined Sales Tax Project Agenda Wednesday, January 23, 2002 8:00 a.m. Continental Breakfast 8:30 a.m.-12:00
noon Combined Work Group Meeting 12:00 noon - 1:00 p.m. Lunch for all 1:00 p.m.
- 2:00 p.m. Work Group Meetings* 2:00 p.m.
- 4:30 p.m. Work Group Meetings* Thursday, January 24, 2002 8:00 a.m.
Continental Breakfast for all 8:30 a.m.
- 10:00 a.m. Work Group Meetings* 10:00
- 12:00 noon Work Group Meetings* 12:00 noon - 1:00 p.m. Lunch for all 1:00 p.m.
- 3:00 p.m. Project Meeting** Dennis
Brown ___________________________________________________________________ Wells Fargo Gets Approval to Acquire Texas Financial & Marquette By Rob Wells, Bloomberg Wells Fargo & Co., the No. 5 U.S. bank, won Federal Reserve Board approval today of its purchase of Texas Financial Corp., which expands its presence in Texas, New Mexico and Illinois. The Fed
also approved Wells Fargo's acquisition of Marquette Financial Group
Inc. of Minneapolis, Minnesota, parent of Marquette Bank. Both transactions
were approved by a 7-0 vote. Terms of the transactions weren't disclosed. Wells Fargo agreed to sell nine branches with $304 million in deposits in South Dakota and Minnesota to satisfy Justice Department antitrust concerns. Texas Financial has $2.9 billion in assets and is the 12th largest bank in Texas. Marquette has $3.2 billion in assets and operates in seven states: Minnesota, California, Illinois, Iowa, Nebraska, South Dakota, and Wisconsin. __________________________________________________________ ################### ###########################################] Yes, leasing in India and Pakistan is Very Popular Askari Leasing , Pakistan,. Chooses NetSol's Leasing Suite/ Asset Based Finance Business CALABASAS, Calif -NetSol International Inc. (Nasdaq:NTWK), a software development company announced today that Askari Leasing (Pvt.) Ltd. has signed an agreement to implement NetSol's Suite of Leasing and Finance Applications for its growing business. Askari Leasing Ltd., as the biggest Asset Based Leasing Company in Pakistan, has chosen NetSol's solution after intense competition over products from other vendors. In the first phase of the project, NetSol is preparing to implement its ePOS and PMS modules of the application suite. Askari becomes the first Pakistani company to move towards an automated leasing application. The web based front-end module is to be rolled out within all the branches of Askari Leasing in Pakistan. PMS and ePOS, the decision making work flow engine, would be implemented in the head office of Askari Leasing, where the credit underwriting takes place, to fully automate the application flow and decision making aspect of a Leasing Proposal. The initial revenues will be derived from license fees for the modules with additional revenues to be generated from the implementation, customization, training and support of the products. Salim Ghauri, president of NetSol commented, "Over the last five years, we have worked extremely hard to produce an end to end solution for Asset Based Leasing business. This was the break through we were looking for to become the preferred solution provider in the Asset Based Leasing business in Pakistan." He added, "We are one of very few companies in the world that offer the entire enterprise solution for this business. Back office applications like PMS, CMS, and WFS take years to mature and NetSol is in a great position in 2002 having a suite of mature products in a complex business space." Taimur Afzal, managing director of Askari Leasing, commented, "Askari Leasing has always aspired to be ahead of its competition. In a short period of time, we have become the biggest leasing company in Pakistan. We would like to maintain this edge by optimizing and automating our process. With a partner like NetSol having broad experience in the global leasing solutions business, we hope to achieve this goal." He added, "NetSol's excellent delivery record and their recent partnership with Askari Information Services, our sister company, helped in our decision making process. With these type of partnerships we have better ability to deploy mission critical software solutions." About NetSol International Inc. NetSol International Inc. is a global software developer and information technology consultant to blue-chip corporations worldwide. The company has developed a complete suite of products for the finance and leasing industry. The entire suite is the first end-to-end solution that encapsulates the core business requirements of any type of finance or leasing company. The company employs more than 250 software developers, engineers and marketers worldwide. About Askari Leasing (Pvt.) Ltd. Askari Leasing is part of Army Welfare Trust, a $400 million revenue group of companies, and is a sister company of Askari Information Services. In a short period of time, it has become the leading Asset Based Company with presence in every major city in Pakistan. Askari Leasing specializes in tailor made leasing solutions for the retail and the corporate customer. #### ############################# ######################## Comdisco Reports Q4 Loss of $142M .c The Associated Press ROSEMONT, Ill. (AP) - Comdisco Inc., in the midst of a bankruptcy reorganization, reported a quarterly loss of $142 million Friday and said it is soliciting new bids for its leasing businesses. The net loss for the technology and financing company's fourth quarter, ended Sept. 30, amounted to 94 cents a share, compared with a year-earlier loss of $168 million, or $1.05 a share. Revenue was $509 million, down 44 percent from $901 million, partially reflecting the sale of businesses. The company's stock has been little-changed since falling under $1 last July when it filed for Chapter 11 federal bankruptcy protection, and major brokerage houses no longer estimate its results. Shares rose 4 cents to close at 49 cents in trading Friday on the New York Stock Exchange, down 99 percent since reaching a high of $57.25 in March 2000. Comdisco held an auction last month to sell its leasing businesses - its largest unit, with annual revenues of about $2 billion. But Comdisco said Friday it is ``not presently inclined'' to accept any of the offers received so far for the businesses, which lease technology equipment to a range of industries. It said it could achieve greater value through reorganization than by selling for those amounts. The company set a Jan. 7 deadline for new offers. If it continues to reject them, its creditors could force a court showdown. A federal bankruptcy judge in Chicago on Thursday continued a hearing about the sale of the leasing businesses until Jan. 24. The Rosemont-based Comdisco sold its disaster-recovery business to SunGard Data Systems last month for $825 million. It has said it hopes to emerge from bankruptcy in the first half of 2002. For the full fiscal year, Comdisco lost $272 million, or $1.80 a share, compared with a loss of $67 million, or 44 cents a share, a year earlier. Revenues sank to $2.71 billion from $3.36 billion. On the Net: http://www.comdisco.com __________________________________________________________________- What of Greenspan? By David Warsh, Boston Globe Staff, Why did Congress fail to pass a stimulus package before going home for the holidays? Two reasons usually are given: the looming 2002 election and the fact that the economy seems to be on the verge of recovering on its own. There is a third reason as well, having to do with the long-range trajectory of the next recovery. The man who wasn't there in Washington last week was Alan Greenspan. Present and accounted for during intense negotiations were all of the other players. Treasury Secretary Paul O'Neill, the administration official charged with pursuing a deal with the Democrats, spent hours on the phone with Senate Finance Committee chairman Max Baucus, Democrat of Montana, trying to reach an agreement to extend health care to the unemployed. It remained tantalizingly out of reach. Republicans offered tax credits to the unemployed for privately purchased insurance. Democrats wanted to require that coverage itself be offered, either through former employers or through Medicaid itself. President Bush himself traveled up to Capitol Hill in an attempt to persuade conservative Democrats to vote for the Republican version, in order to deliver the rest of the benefits on which both parties already had agreed - the extended unemployment benefits, upper- bracket tax cuts, and accelerated depreciation for corporations. No deal. Nor did Congress create the federal reinsurance agency to backstop the market for terrorism insurance that is deemed by the administration to be at least as essential to the recovery as the stimulus package. Many businesses will see their insurance rates escalate sharply on Jan. 1. What of Greenspan? His unwillingness to weigh in at the end of the stimulus debate was significant, and not just because he has been willing to intervene in the past. In September he endorsed a stimulus package of $100 billion, or 1 percent of GNP, perhaps because it seemed politically inescapable. Now, however, he seems happy to let the measure die rather than risk step-on-the-gas measures that might put the economy into a start-stop-stall rather than a broad and leisurely expansion. The questions before the Fed today have their roots in the manner in which the central bank responded to the last global crisis - the Asian financial panic that began in August 1997 with a run on Thailand's currency. By October of the following year, the panics had beset the economies of Indonesia, South Korea, Russia, and Brazil. The low-key Greenspan created the consensus among his colleagues - the discovery of the ''new economy'' with its ''productivity miracle'' - that permitted the American economy to run at full tilt throughout the crisis, serving as global importer of the last resort. And when the giant American hedge fund known as Long Term Capital Management seized up after Russia defaulted on some of its debts, the Fed supplied the liquidity and presided over the liquidation that kept financial markets functioning smoothly. Then the boom got out of hand. Monetary policy is not easy to manipulate. Credit supplied in one sphere of the economy has a way of turning up in quite another, and, sure enough, the Internet and telecommunications craze of 1999 was in large measure fueled by easy money. The irony is that two books touting Greenspan's genius as a central banker appeared just about this time last year, as the first cracks in high-tech equities began to spread to the broader markets. When the contraction finally came, it came by stealth. Nobody should be completely surprised when a recession finally arrives after a decade of uninterrupted growth, but in varying degrees we all were, even Greenspan. The unexpected softness became apparent just as the presidential election hit its memorable snag. The Fed's first cut in interest rates - the first of 11 during 2001 - was announced on Jan. 3. Subsequent events have put the central bankers to a tremendous test - a test they appear to have passed with flying colors. The widely held view that undergirds the stimulus deadlock is that the recession will be mild and end next year, freeing both parties to contest the November election, hammer and tongs. Control of both houses of Congress hangs in the balance. The incipient mood is not euphoria but fervor, a close relative. But it takes longer to unwind a bubble than most people think. Alan Greenspan almost has reached the point at which he will announce that he is ready to retire, but not quite yet. Clearly he does not want to permit another bubble. What he does in early 2002 - and does not do - will be with us for a long time to come. David Warsh can be reached by e-mail at warsh@globe.com. ---------------------------------------------------------------------------------------- Looking for Signs of Recovery If the End of the Recession Is Near, It Is Also Well Hidden By Steven
Pearlstein |