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July 26, 2001 NEW---to our Website---- VIRUS INFO CENTER In a box at the bottom of our website: the top ten viruses making the rounds; how to fix them, what they are about, will be listed. The site will also show the “risk” factor. Go to www.leasingnews.org and scroll to the bottom. +++ I can tell you from the Leasing News mailing list, whole leasing companies were shut down as all the e-mail from many leasing companies came bouncing back. Many National Association of Leasing Brokers members asked to be removed from the NAELB listserve. To those readers: We are all linked in this industry and listserve is like the internet or telephone wire, the conduit. The simple thing is as IS Director Gerry Egan states, don't open any attachments--unless you first query the sender that they actually sent it to you. I personally don't open any attachments at American Leasing or Leasing News without making a query...it may take longer, but we have had virus attacks before and it takes longer to clean your system. Don't open attachments---PLUS members should never send attachments on listserve. editor . --------------------------------------------------------------------------------------------- Headlines--- CIT to Let 150 Go—Move to Tempe, Arizona or “Goodbye!” 1Lease “We’ll be There.” “ If you wouldn’t buy it, don’t send it.” Menkin on 109 Leasing Companies __________________________________________________________________ CIT Rumor---Confirmed!!! CIT called in all the managers in the Atlanta office on Wednesday to let them know they were shutting down the operation there. Top managers were offered jobs in Tempe, Arizona, and if they don’t take it, they will be released late September. Over 150 people on the street. Rumor is there are other cuts to be made as Tyco has specific vendor plans and a change in direction, on a larger scale than 1Lease, but in the same direction as banks and financial institutions want to eliminate third party originations, meaning go direct or through vendor. Look for further cuts as Tyco takes over the operation. Virus--- It is Still Out There—Beware Just a note to let you know that we were hit with the SIRCAM virus, several day's ago. We are currently working our way out of the problem. The bug came in from our web site disguised as a leasing inquiry. Once opened it slowly took over our system. At first we did not notice the problem but in about 24 hours we were all locked up and could not access any information. Although a bit late for us we appreciate your news letter and certainly appreciate any virus alert you pass on. I hope no one was seriously damaged by this virus. Thank you, Warren Layne Warren Layne Alliance Credit Corporation Equipment Leasing Division Phone: 800-765-5552 Fax: 512-249-7188 http://www.alliancelease.com ( Yes, the virus is still making the rounds. Several have even changed their e-mail address as the virus kept coming back, and back. editor ) --------------------------------------------------------------------------------------------- Please pass on to a colleague. We are independent. No advertising or banners. Our readers give us “inside” news on what is happening “day-by-day”. Reality. --------------------------------------------------------------------------------------------- “We’ll Be There!” 1lease to be at United Association of Equipment Leasing San Antonio Conference “We will be at the UAEL show in Oct. We are still looking to purchase lease portfolio's and seem to be getting several responses for this program.” Steve Ballard 1 Lease ( e-mail reply address ) We’ll be there, too. Now is the time to make your Hotel Reservation for the special price at leasing association conventions. For instance, the United Association of Equipment Leasing San Antonio conference listed above will be at the Hyatt Regency San Antonio on the Riverwalk. Call: 800-233-1234 or (210)-222-1234. Mention the UAEL conference to get the special group rate of $172.00 single/double occupancy. These blocks of rooms will sell out. The last UAEL conference in San Antonio you couldn’t even get any room at the Hyatt ( I remember, as we stayed three blocks from the event ). October 25-28. Leasing News will be there, meaning the entire Leasing News Advisory Board. Bob Baker, Wildwood Financial, St. Louis, MO Steve Crane, Bank of the West, Walnut Creek, CA Phil Dushay, Global Leasing, New York, NY Steve Geller, Leasing Solutions LLC, Wesley Hills, NY Mike Graneri, Graneri and Associates, Miltown, NJ Ken Greene, Attorney, Greenbrae, CA Bruce Kropschot, Kropschot Financial Services, Vero Beach, FL Charlie Lester, LPI Financial, Marietta, GA Bob Rodi, LeaseNow, Warrendale, PA Bob Teichman, Teichman Financial Training, Sausalito,CA Andrew Thorn, Thalman Financial, Apple Valley, CA Rob Yohe, Yohe and Associates, Stilwell, KS Ginny Young, Brava Capital, Orange, CA --------------------------------------------------------------------------------------------- “If you wouldn't buy it, don't send it!” Paul Menzel hit the nail on the head. As I broker, I rely on my Funding Sources for my livelihood. Relationships and reputation are everything in our industry and a synergy with Funding Sources, Brokers, Lessees and Vendors exists on all deals. We all have the responsibility of being honest with each one of these entities as well as to ourselves. I would never send or fund a deal that I would not buy personally just for that "quick buck", This is why I do not chase high rate, hard to place transactions that others may pursue. I take great pride in the quality of my transactions and low delinquency ratios. As the numbers of Lessors decline, so do our options. Kudos to those that consider their Funding Sources a partner in their business and care about their success as well. If you wouldn't buy it, don't send it! Carole Reed Lease Consultants 800/322-0032 caroleatattitude@medianone.net US Bancorp Thank you, readers. We are now working on two stories about US Bancorp. We hope to publish one tomorrow. Both Troy Molitor and Brad Peterson want me to publish that they say it has nothing to do with Manifest. Leasing News asked Brad Peterson for a statement, which he said he would provide tomorrow. They both requested Leasing News print that we are NOT working on a story about Manifest. We never mentioned Manifest, and the story we are working about is “US Bancorp.” --------------------------------------------------------------------------------------------- The Equipment Leasing Association Newsletter covers information weekly that is not available at other associations on line and the great majority is not covered by other leasing newspapers, such as the Monitor or Leasing News. Members of ELA get a lot for their membership dues. You may be able to obtain a “free trial subscription,” or subscription without the links to the full stories ( I think the “nuggets” they publish are perfect for the busy reader. I also think for the lessor or leasing professional, this is excellent, current information. editor ) *** SUBSCRIPTION INFORMATION To update your current subscription, please e-mail your name, company, and the e-mail address to Daniel Aubain at database@elamail.com or phone 703/516-8377. Fax: 703/527-2649. To unsubscribe, please visit http://www.elaonline.com/discussions/MembersOnly/#ELAnewsletter. If you have other questions or comments relating to ELA E-Leasing Newsletter, please e-mail Amy J. Miller, Vice-President of Communications, at amiller@elamail.com This newsletter is free to ELA members. Forward it to a co-worker! Copyright 2000 by the Equipment Leasing Association http://www.elaonline.com/ Phone: 703/527-8655 Fax: 703/527-2649 ******************************** ELA E-Leasing Newsletter 7/26/01 ******************************** The ELA E-Leasing Newsletter is published every Thursday and is sponsored by the Equipment Leasing Association and its co-sponsor. To Get Full-Text Stories, go to the web page associated with the story you wish to read. The links to news stories require an ELA MEMBERS-ONLY NAME AND PASSWORD. To receive a password, please contact Daniel Aubain at database@elamail.com or phone 703/516-8377. NOTE: Address change/unsubscribe instructions and contact information can be found at the end of this e-mail. If you received this e-mail (but it was NOT forwarded to you by someone else) you are ALREADY subscribed. *********** The E-Leasing Newsletter is SPONSORED by:************ Nassau Asset Management Recovery and Remarketing Specialists 1(800)462-7728 or 1(800)4-NASSAU GO HERE>>>>>> http://www.nasset.com WE GET RESULTS!!!!!!!!! Servicing The ELA for more than 10 years!!!!!! --------------------------------------------------------------------------------------------- The Economy Today, Thursday, July 26, 2001 by Christopher “Kit” Menkin, editor/publisher 109 Leasing Companies Fold, Merge, or Went Out of Business I had lunch with Armon Mills, publisher of the Silicon Valley Business Ink, who will celebrate their one year anniversary September 13 at a big party at the San Francisco 49er Training Facility, located here in Santa Clara. We went to our favorite spot, Chef Ming’s on Washington/Bascom at Newhall, Santa Clara ( not fancy, just good, inexpensive Chinese food, near the University of Santa Clara). Armon told me they had purchased “The Valley Scene,” a newspaper they thought they could do “cross promotion” and increase circulation. He wasn’t waiting for a third quarter, or fourth quarter, or until the first of the year. He was surprised to learn about 109 leasing companies on the Leasing News list. The experts tell us technocracy, along with the internet industry, moved the eight year economy high. The financial community saw it start to fall apart the first quarter of last year, and starting the second quarter of last year, over 109 leasing companies merged, folded, and are out of the marketplace. (http://www.leasingnews.org/list.htm) Many of them were large such as Advanta, Comdisco, El Camino ( formerly the largest individually held company )UniCapital, United Capital to name just a few. Banks that were active with lines of credit or warehouse lines moved away from smaller leasing companies as they realized what was originally for the better credits, meaning no money down, longer terms, was being used for the “more risky” credits, and the economy was discovering them at a rapid rate. Why so many changes? The economy was so good, even stupid people could make money. Many lessees learned about the changes the hard way as they were told to make payments somewhere else, often a service bureau where any information was difficult to obtain, whether claims of being late, missed payments, insurance, payoffs; you name it. The cycle is not new. If you were to look at the San Jose-Santa Clara, California Pacific Telephone Yellow pages for 1990, you would not see many around today. Look further and you would not recognize the great majority of the names, unless you were in the leasing business during those days when Westinghouse and Ford Motor Credit rocked the town. Avco Finance, Budget Finance and Foothill Financial were writing “first and ten percent” to anyone who could sign their name to the contract. In the past cycles, slow moving inventories brought many companies down quickly. Here it appears the investors have finally seen that the Emperor is indeed not wearing any clothes; most internet companies were losing a lot of money with the hopes the future would bring a profit, so invest now, before you lose out. Pet.com, Webvan, and over a hundred such companies are no longer around. One different aspect of the present cycle are company’s inventories. This applies to retail stores as well as distributors and manufacturers. The computer has enabled management to control, plan, and schedule the process extremely tight. Errors are reduced in introducing a new product before selling the old product ( remember Osborne computer, flying high, doing great, until the boss himself said what they had coming out next month made everything they had produced obsolete? He even tried to sue his accountants as he did not believe the figures were correct about what was sold and what was in inventory…too late.) In prior times, excessive inventory resulted in great losses…in margin, introduction of new products, and poor cash flow in delayed collection of products shipped to distributors or retailers. Management has false security. The goal of management is to make a profit. Sales produce income, but the bottom line is controlled by management, meaning control of inventory and the cost of making or inventory. Marketing has also changed. Today many sell direct, managing inventory very tightly, such as Dell or Gateway. Retail stores have their own web site. Distributors control less and less of the sales as Walmart, Costco, among other giants go direct. Even the wine industry sells a lot via the winery, their wine club, direct by mail or internet. The mass producers such as Gallo, Kendell-Jackson, J.Lohr, tightly control their distribution. As long as the consumer keeps buying, they will keep production up. When will the cycle change? Where is a better question, I told Armon. The wireless transformation with cellular telephone and minutes has pushed the market place, as well as the small computer. Even low income families have two or more televisions, cellular telephones, and at least one computer. The Salvation Army Thrift stores for the last two years have had poor sales. It is not that they have not had any change in available product, all donated. Their customers had money to buy new, and a matter of pride was important. Today, Salvation Army Thrift Store sales are very good. The San Jose Four County Division has been in the red for over three years. Since February, they are in the black each month. ( The money solely goes to support their rehabilitation program ). The home remodeling industry seems to be going at a very good pace. People who have lived in the same home for ten to fifteen years find it time to make serious improvements to their kitchens, bathrooms, living area, landscaping. Those that were going to move up are making plans to stay where they are, but make it better. Try to get a contractor, plumber, or electrician to your house, that will tell you how busy they are. The entertainment industry is doing better as more people have time to go to the movies, the baseball game, visit their relatives or friends. While hotel and airlines may be feeling the slack, local businesses are seeing more visits. People don't travel far, they stay around the home or drive to a destination. Faced with sagging sales and a saturated PC market in the United States, computer makers in past months have tried to stimulate demand, engaging in a price war while also sacrificing profits. U.S. shipments dropped by 6.1 percent, from 11.4 million to 10.7 million units. The United States accounts for nearly 40 percent of the world's PC market, according to Initial estimates from Gartner Dataquest analyst Todd Kort .. Western Europe, which accounts for nearly 20 percent of the world's PC sales, also indicated decline. Compaq Computer, once the industry leader, announced today their second-quarter profits fell 81 percent as sales slumped and the company cut prices to keep up with Dell Computer Corp. Mighty giant Hewett Packard also announced today they were cutting 6,000 jobs, more than 6 percent of its work force, because consumers worldwide are spending even less on technology than expected The economy generates $10 trillion a year in goods and services. That is huge output, according to Louis Uchitelle of the New York Times. “Bt the treadmill does not stop,” he explains. “ To keep the labor force employed and to make full use of the nation's growing productive capacity, that $10 trillion has to grow by at least $325 billion this year. The economy turns sluggish at less than $300 billion. So far this year, the growth rate is only about $115 billion. The Department of Commerce Department will update that number on tomorrow ,Friday, when it publishes second-quarter figures. We will see how the market, and more importantly, the consumer reacts. The consumer has generated nearly all the growth, a task once shared with business. Until the slowdown started last summer, business investment had grown by well over $100 billion a year. The leasing industry has the money and the distribution channels. One time leasing was for the rich, the better credits, with little down. Then it turned into a “cash flow” tool rather than “tax advantage,” primarily in the so-called smaller marketplace. The distribution channels changed. The “wheeler-dealers” lived high on the hog for almost eight years. Many got out while the gettin’ was good. Others are still trying to make deals, and as the economy turns, collections, defaults, and all the problems that good times hide have come home to roost. So if you want to survive, you have to work smarter, be smarter, and form alliances. A good alliance is not developed in a day, but takes time. Now is the time to start earning your position. I personally think the trick is to look at the glass of water and say it is “half-full.” The light is green at the intersection. If you can’t smile, make a joke, and get too up-tight, now is the time to change your occupation. A positive attitude and keeping your chin up will make the difference, especially the next few months. Look for many executives and business owners to take early retirement. They are the bears, who will hibernate. The bulls always look for opportunities and don’t see “red lights.” They only see “go lights, “ as Zig Ziglar calls it. The rest are worried about what is behind the “Greenspan Door.” Kit Menkin policy Statement
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