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Kit Menkin’s Leasing news www.leasingnews.org Monday, February 11, 2002 Headlines Tyco Stock Springs Back, Facing the Music Works Hacker Brings Down Leasing News Classified Ads Reaction to GE/Colonial Pacific Chicago Office Rumor Reaction to Leasing News Complaint Reaction
to Kozlowski-Welch
Radio Puppet Show International Rolls Out Zero Percent Financing U.S. Shuts 'Unsound' Internet Bank EFJ’s Ron Caruso’s Observations on the Leasing Climate Today . ______________________________________________________________________ Facing the Music Works Tyco Chief Executive L. Dennis Kozlowski facing the music certainly has paid off as stockholders renew confidence in the company. Various suitors say they don’t need a Valentine, GMAC, Citigroup, American Express, meaning they aren’t interested in the CIT operation. And does GE need another financial division? What will happen to the employees, the operation in Tempe, Arizona is pure speculation, Kozlowski already said Tyco “overpaid” for CIT, so does that mean it will be sold at a “fire sale” price? And to whom? Is he as good a poker player as Oakland Raider Al Davis who is allegedly willing to trade his one year contract coach Jon Gruden to Tampa Bay. The stockholder’s confidence is back. Tyco meantime raises its minimum in several finance division to brokers to $150,000, according to a reliable source. Tyco
Is Healthy, Yet Faces a Huge Debt in 2002 By
John Hechinger, Wall Street Journal
_____________________________________________________________________ Hacker Brings Leasing News Classified Down Classified ads are kept on a separate webs server than Leasing News. It was hit by a hacker late Thursday night. The hacker got through two firewalls. In looking at the records, it appears they were trying for two weeks or more. We could find no damage, but it appears there were some programs ( virus ) imbedded. We did not open them, but stripped the hard drive of all software and reinstalled the operating system . We have the date saved elsewhere and re-installed it.
We have changed passwords, put on a third firewall. And also strengthened up our main site--again. We don’t know what the hacker was up to. This was a Windows 2000 server that we host in our office solely for the classified ads in Leasing News. We do not think it is related to the new policy of allowing only leasing companies who belong to lease associations to advertise in the “help wanted section.” We hope it is coincidental occurrence. We apologize for being down for most of Friday. ____________________________________________________________________ Classified
Ads---Help Wanted Requirement 28
ads were removed. We received
comments like “ Take a Hike!” to some
we cannot print. Perhaps reflecting the common sentiment is this
one, where they sender asked us to with hold their name: I
have no problem with our classified ad being removed while we re-evaluate membership
in UAEL or NAELB. It's been a while since we actually belonged to either
of those organizations, although we do still attend the occasional forums. I
would like to express my humble opinion that just because a company
is a member
of one of the Leasing organizations, there is no way to "insure
the code
of conduct and ethnics the association requires of that member."
as pointed
out by your staff. We all know that many of the bad apples (over
the years) have been members in good standing with WAEL & UAEL
for many years and that the banks & lenders who have generated
large volumes of business through those companies have simply "looked
the other way". Many
of the good ones simply do not find the value in membership at this time. Please
withhold my name and thanks for the forum! (
Our original intention was to help out individuals “out of work,
“not giving
companies a “free” Help Wanted ad. The
point is the leasing association has a procedure to eliminate members who
are not following their code of ethics. The National Association of
Equipment Leasing Brokers openly promotes doing business with funders
who are members of their association.
The reasoning is quite valid. The association has the ability to get involved
and help straighten out
the “dispute.” From
a dollars and sense position, the MonitorDaily.com Employment postings
are 1 ad $625 each 2 ads $600 each 3 ads $575 each posted for 60
days and they have further discounts for each ad if signed to a one
year contract. Featured employee and other ads are available for an
additional fee.
Again,
our goal in classified ads is to help individuals find work. It works,
as we get testimonials, also from the "Help Wanted" ads. Anyone
can post a “Job Wanted” ad---no requirements, except a maximum
of 25 words. It is free. No time limit. Let us know when you find
a job, and hopefully, we
have been of some help. Kit Menkin, editor/publisher Reaction to GE/Colonial Pacific Chicago Office Rumor "One of our brokers said that GE Capital's new Colonial Pacific/Chicago office is not funding because all of their employees called in sick. They told management that they "weren't going to be treated this way". Have you heard from anyone with some facts?" ( name with held ) After two days, Leasing News is still unable to have this “rumor “ denied or confirmed. This is the reaction we have received to date: Very little has been said about the departure of many of the Mellon managers who were under retention bonus plans with GE until 12/15/01. They resigned en masse in the middle of January to join their former leader Tim Reece who has formed a new company to compete with the old as a subsidiary of Greater Bay Bank. Insiders report that the move caused severe irritation to the newly ordained king of the consolidated GE unit made up of former Heller, Colonial Pacific, Mellon, Leasamerica, and Chase Third Century groups. Word on the street is that the new company had their pick of the litter. All that is reportedly left are those who weren't worth taking. Name withheld --- The dedicated and professional staff that continues to process our business in Portland remain committed to both our success and that of other senior brokers. CapitalWerks, LLC originated and funded its highest volume ever with CPLC in January, since its inception 15 short months ago . Our experience was nothing short of amazing, with increased turnaround, creative solutions to difficult vender programs, and positive attitudes... Whoever would question the validity and commitment to professionalism by the group in Portland should be investigated. I can only suspect those individuals that have been committed to the broker community for as many years as the dedicated staff at CPLC, recognize they will continue to work with us even in their future endeavors. Kit, since GE/CPLC made the decision to focus on their more profitable and experienced originating partners, the customer service and communication has increased significantly to both of our advantage. Jim Raeder President Preferred Lease, A CapitalWerks Company Office 949 270 2121
( It appears Chicago has not begun processing the business, so this is a non-issue for the Portland office. We do not know if the “sick out” is true or not. Prior to this date, we did hear from ex-management that GE has brought in non-leasing management to consolidate the various leasing company operations, make further “cuts” in duplication, tighten credit criteria as part of improving “performance” and merge the acquisition into the GE way in Chicago. editor ) Reaction to Leasing News Complaint “Why do we continue to announce mergers, acquisitions, and the hiring of new employees on Leasing News? I've been in the industry over 7 years and have NEVER heard of 99% of these 5 man shops like Cypress Leasing. Who besides Mr. Rockhold cares that his name is spelled correctly? Butler Capital moves from New York to Maryland? I didn't even know they existed until this morning. Enough with bothering Kit about packing up the family and moving the home office to Cockeysville, Maryland. Lets stick to headlines, not address and employment changes.” Anonymous -- You gotta love these anonymous letter writers to Leasing News. The latest entry is from a seven-year leasing professional complaining about the relevance of events concerning leasing companies which he/she had never heard of. In all due respect to the anonymous writer, although frankly I am not sure if the lack of fearlessness in his/her anonymity commands any respect, seven years in this industry amounts to mere youth compared to more seasoned veterans. I have nearly twenty years experience, and still consider myself "middle-aged" in this industry with a lot of learning to do. Yet I am familiar with just about all the companies which have had their news releases published in Leasing News.
To dismiss such announcements as trivial is to show lack of regard to our fellow professionals who have made contributions to the growth of our industry. Lack of regard, is of course, a symptom of such metaphorical youth. "Anonymous" need not be disheartened. In the words of Dorothy Fulheim, "Youth is a disease from which we all recover" Jim Fleming National Business Credit, Inc. nationalbusinesscredit@yahoo.com --- The complaint in yesterdays leasing news bothers me. I have been in the leasing industry since 1978. I worked for small and large leasing companies. I've owned small and large leasing companies. During that time I've made many friends, and probably some enemies. The Leasing News keeps me up to date on many of them. It also reminds me to contact them from time to time. If someone, who for some reason chooses to be "anonymous," doesn't want to read that information, well then just skip it. Keep up the good work and complete reporting! Bob Chlebowski Capital, Technology & Leasing, LLC. rchlebowski@captechleasing.com ---- I agree with you, Kit, about what you publish. If "name withheld" doesn't care to hear about Cypress leasing, he can always skip the leasing news and read the pre-masticated stuff elsewhere. You, Kit, are a wonderful combination of the Wall Street Journal and National Inquirer for us folks in the leasing industry. It ain't broke - don't fix it! Name NOT withheld.... Charlie Meaker Lease Financing, Inc. 800-478-2330 - 520-398-2650 - Fax 520-398-2652 Since 1987 - Financing for Business Equipment and Modular Buildings ( Yes, insider news and what is really happening in our industry. editor ) ---------------------------------------------------------------------------------------------- Reaction
to Friday’s Tyco International Wrap-Up Kozlowski-Welch Radio Puppet Show The Tyco/CIT story reminds me of yet another panel discussion at the UAEL/EAEL joint conference in Las Vegas a few years back. I sat on this panel with Ira Romoff and the topic of discussion centered around fate of the leasing industry and where we would be in 5 years. Ira, whose insightful words again raised the specter of the "Whale-Minnow" syndrome, said that "Whale-Minnow would indeed occur. Ira predicted, however, that the Whales ran the risk of growing so large that they would begin to collapse and eventually implode under their own weight. Incredibly, all that is currently happening with Tyco would put Ira on the dais with Karnak the Great as a soothsayer for the leasing business. It appears that Ira was dead on as the Whales begin to beach themselves. In the meantime I hope that the Minnows don't starve before our funding "food sources" can be replenished. The carnage that the Whales have caused in the last couple of years may have brought the "Red Tide" down on all of us. Bob Rodi President LeaseNOW, Inc. drlease@leasenow.com www.leasenow.com 1-800-321-LEAS (5327)x 101 ( Or it has brought in some new waters for us to fish as it certainly opens up great opportunity for local lessors, local banks, to get back to the personalized service; the face recognition relationship. The mergers and acquisitions will bring growth for smaller entities who can obtain better margins, less operation costs due to technocracy, and exist while the corporate giants kill each other. editor ) ---- (dealers turn to low rates and “zero financing” to create sales ) International Rolls Out Zero Percent Financing ####### ############################################### 1/29/2002 - International Truck and Engine Corporation and the American Transportation Corporation have rolled out a special financing plan for qualified customers. "Catch It While You Can" offers a 0% first year interest rate financing on 60- and 72-month loans. The limited time offer applies to the purchase of new International and American Transportation vehicles. Qualified customers buying up to 10 trucks will receive an effective APR of 4.71% for 60 months and 5.10% for 72 months. This represents an approximate customer savings of $5,000 to $10,000 over the life of the loan, according to International. For customers who don't take advantage of the 0% first year interest rate financing, International is offering alternative purchasing options such as $1,000 to $2,000 in parts and service credit, or a $3,000 trade-in allowance on the purchase of International 9000 or 9000i series vehicles. The "Catch It While You Can" financing program runs from Jan. 21, 2002 through March 31, 2002. For more information on this program, contact your local dealer. To find the nearest dealer location, call 1-866-23TRUCK or visit www.InternationalDelivers.com. ( sent in by Christopher Raley chris.raley@firstprimecapital.com ) ################ ################################## The Leasing Sourcebook
http://www.leasingsourcebook.com/ Serving the Leasing Industry Since 1983 Founded, in 1983, BIBLIO.TECH publishes the Leasing Sourcebook--The Directory of the U.S. Capital Equipment Leasing Industry. Sourcebook data comes from our proprietary database—continuously updated—that tracks over 6,000 leasing companies and other firms which market specifically to this industry. Our program of continuing research is guided by subscribers and clients. There is no cost to add your company to our database and to be listed in the Sourcebook. To do so, please visit our Questionnaire page. The Leasing Sourcebook is the only comprehensive equipment leasing industry directory and contains results from our periodic industry surveys. Upon request, we develop Custom Reports tailored to client specifications. Contact Lists (essential for direct mail or telemarketing) are available on a selective basis for qualifying promotional purposes. In the near future, we will offer on-line access to the Biblio.Tech database. To receive news about Internet access, send e-mail BarbaraLow@LeasingSourcebook.com.
Telephone 781-259-0524 FAX 781-259-9861 Postal address P.O. Box 657, Lincoln, MA 01773-0567 Electronic mail U.S. Shuts 'Unsound' Internet Bank Too Many NextBank Borrowers Default By Neil Irwin Washington Post Staff Writer Federal regulators closed NextBank N.A., an Internet bank that has 1.2 million credit card customers, for "unsafe and unsound" financial practices. The Office of the Comptroller of the Currency said NextBank had extended too much credit, given the amount of cash it had in reserve. "NextBank's unsafe and unsound practices were likely to deplete all or substantially all of the bank's capital," with little prospect of turning things around without government intervention, the agency said in a news release. NextBank was the first Internet bank to be closed by the government. "This may affect some of the other remaining online-only banks and reflect poorly on them," said Robert Sterling, a senior analyst at technology research firm Jupiter Media Metrix. "It's not very fair, but it might have that impact." NextBank Visa cards remain valid, Visa said, although the credit card company is discussing what will happen with the accounts in the long term. On the company's credit card Web site yesterday, the card application link did not work. NextBank, a unit of NextCard Inc., didn't offer a full range of banking services such as checking accounts. Its business was limited to accepting deposits in the form of $100,000 certificates of deposit and issuing credit in the form of credit cards. It attracted steady business: NextBank has deposits of $554 million, which isn't much by conventional banking standards but is large compared with other Internet-only banks. NextBank's problem, the comptroller's office said, was that it did not have policies in place to adequately protect itself should credit card customers default in large numbers, leaving the bank unable to repay depositors. In the past two years, as the American economy has softened, that is exactly what has happened. More of NextBank's borrowers defaulted than the bank had expected. "The bank's assets were of lower credit quality than initially projected in the bank's business plan," the comptroller's office press release said. A spokeswoman for NextCard did not return a phone call seeking comment. In a prepared statement yesterday, the company said efforts to sell itself have been unsuccessful and that it will reevaluate its business strategy. The bank is now under the control of the Federal Deposit Insurance Corp. Depositors who had $100,000 or less in NextBank will get their money back. Those who deposited more will get more than $100,000 back only if there is money left over after the company is liquidated. Accounts totaling $29 million exceeded the $100,000 limit, the FDIC said. The agency also said it won't know how much the closing will cost the government until NextBank's assets can be evaluated. NextBank was one of several banks that emerged during the Internet boom of the late 1990s that promised high interest payments on deposits and low fees by keeping expenses low. Instead of expensive bank branches, they centralized their operations and interacted with customers online. "What they found is that it's only a certain type of customer who's willing to use a financial institution where they don't have branch access," said Moriah Campbell-Holt, an analyst with Gomez Inc., which evaluates financial services providers. But NextBank's problems appear to be somewhat different. The firm was involved exclusively in issuing credit cards, she said, and its problems appear to have come from incorrectly calculating the risk of customer defaults, not an inability to raise funds. The Nasdaq Stock Market halted trading of NextCard shares.. The stock last closed at 14 cents a share. NextCard shares traded for more than $40 a share in 1999. WWW.FDIC.GOV/BANK/INDIVIDUAL/ONLINE/SAFE.HTML
The Federal Deposit Insurance
Corp.'s Web site has an excellent, three-part summary of safe-banking
tips. The FDIC's first tip
may seem obvious, but the anonymity of the Internet makes it even
more critical: Take steps to confirm that an online bank is a legitimate
bank and your deposits are insured. The site also offers
sensible privacy and security advice and an overview of your rights
as a banking consumer. Bookmark this site; it has invaluable advice.
---------------------------------------------------------------------------------------------------- EFJ’s Ron Caruso’s Observations on the Leasing Climate Today ((((((( WELCOME TO PULSE ONLINE! ))))))) Brought to you by The Equipment Financing Journal (The EFJ) In this bi-weekly e-newsletter, we will be providing you with important equipment financing news with an interpretation of what’s happening in this financial sector and its impact. As always, your comments and suggestions are welcome. =============EFJ Pulse Online Sponsor==================== Nassau Asset Management Recovery and Remarketing Specialists 1(800)462-7728 or 1(800)4-NASSAU GO HERE>>>>>> www.nasset.com WE GET RESULTS!!!!!!!!! Servicing The Leasing Industry for more than 25 years!!!!!! *Covering all 50 states and Canada *Fastest turn around *24 hour reporting via Web *Highest resale prices Call Nassau now for a complete assessment of your needs!!! ========================================================== The Winter Doldrums by Ron Caruso There are gray clouds hanging over the financial services sector, and other gray clouds hanging over the equipment financing sector. All of them could be aptly summarized as follows: Credibility Issues: What can anyone- the general public, security analysts or credit analysts, believe in terms of financial reporting from companies? Whether this news is in the form of press releases or the used to be sacred words of their independent auditors, there was reliance that the information contained more than a scintilla of truthfulness. In the court of public opinion, all such reporting is beginning to be considered more fiction than fact. Additionally, when it reaches the epic proportions of the ENRON spectacle, we all need to beware-Congress is holding hearings, the director of the SEC has publicly scolded FASB (self-regulation appears to be a myth) and the general public is scared. Out of times and conditions such as these emanate reactions that can be extreme, in the name of political exigency. Such issues as truthful representation of a company's financial results and financial position may be perceived as victims of excessive off- balance sheet use or abuse when applied to certain types of financing. Our industry could be caught up in this, willingly or unwillingly. Conflicts of Interest Issues: On the surface, this issue seems to be focused on auditors who also provide consulting services to their clients. The financial reality is that the consulting services often generate multiples of the audit engagement fees. Additionally, it is hard for outsiders to believe that accounting firms involved in this dual role can maintain their objectivity with regard to their responsibility to their profession and the general public in terms of financial reporting. Now it is not a question of what can be done. It has gone past this threshold to a perhaps more draconian alternative. The days of integrated audit/tax/consulting services may be quickly drawing to an end. Similarly, investment banking firms the both offer opinions about the attractiveness of stocks and provide financial services to these same companies-could this also be viewed as a conflict? Capital Spending: When will the up tick or more optimistically the upsurge begin? We seem to take one step forward, followed by one or more steps back. Inventories remain at very low levels. When will the industrials seek to replace rather than repair their capital equipment? CIT-TYCO CIT has had an exciting existence over the last several months. It's gone from being acquired, to possibly being spun off through an IPO, to its current alternative of possibly being sold again. Is this an overreaction? Is there now a presumption that any financial misstep means you are guilty until proven innocent? One thing is clear-we are in a period of heightened anxiety and tension on Wall St. Financial creativity with regard to the reporting of earnings, et.al., will be taking a much more conservative approach. There may continue to be gray clouds over the economy and Wall St., but there will be fewer shades of gray in financial news and financial reporting. Stay tuned. For more information on these and other breaking news stories, visit the EFJ's web site: http://www.efj.com www.leasingnews.org
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