************Regular Edition Follows*************
"Reflections on Pearl Harbor " by Admiral Chester Nimitz
1941- At 7:55 local time in Hawaii, “a date that will live in infamy,” nearly 200 Japanese aircraft attacked Pearl Harbor, Hawaii, long considered the US “Gibraltar of the Pacific.” The raid, which lasted little more than one hour, left nearly 3,800 dead. Nearly the entire US Pacific Fleet was at anchor there and few ships escaped damage. Several were sunk or disabled, while 200 aircraft on the ground were destroyed.
The attack on Pearl Harbor brought about immediate US entry into World War II, a “Declaration of War” being requested by President Franklin D. Roosevelt, carried live on radio, and approved in a record time by the Congress, December 8, 1941, only a few hours after President Roosevelt address to a joint meeting of Congress.
December 11, Germany and Italy, in a pact with the Japanese, declared war against the United States. Misinterpreting the anti-war sentiment in the U.S., they thought we would not want to enter two separate wars, particularly with a decimated U.S. Navy and would leave Asia and Australia for Japan to conquer. They thought American's weak and without the will, particularly without the weapons to fight back.
( lower half of http://memory.loc.gov/ammem/today/dec07.html )
In reality, Former Admiral Chester Nimitz saw three of the biggest mistakes an attack force could ever make:
Sunday, December 7th, 1941--Admiral Chester Nimitz was attending a concert in Washington D.C. He was paged and told there was a phone call for him. When he answered the phone, it was President Franklin Delano Roosevelt on the phone. He told Admiral Nimitz that he (Nimitz) would now be the Commander of the Pacific Fleet.
After making plans, organizing his staff, Admiral Nimitz flew to Hawaii to assume command of the Pacific Fleet. He landed at Pearl Harbor on Christmas Eve, 1941. There was such a spirit of despair, dejection and defeat--you would have thought the Japanese had already won the war. On Christmas Day, 1941, Adm. Nimitz was given a boat tour of the destruction wrought on Pearl Harbor by the Japanese. Big sunken battleships and navy vessels cluttered the waters every where you looked.
As the tour boat returned to dock, the young helmsman of the boat asked, "Well Admiral, what do you think after seeing all this destruction?" Admiral Nimitz's reply shocked everyone within the sound of his voice. Admiral Nimitz said, "The Japanese made three of the biggest mistakes an attack force could ever make, or God was taking care of America. Which do you think it was?"
Shocked and surprised, the young helmsman asked, "What do mean by saying the Japanese made the three biggest mistakes an attack force ever made?" Nimitz explained:
Mistake number one : The Japanese attacked on Sunday morning. Nine out of every ten crewmen of those ships were ashore on leave. If those same ships had been lured to sea and been sunk--we would have lost 38,000 men instead of 3,800.
Mistake number two : When the Japanese saw all those battleships lined in a row, they got so carried away sinking those battleships, they never once bombed our dry docks opposite those ships. If they had destroyed our dry docks, we would have had to tow every one of those ships to America to be repaired. As it is now, the ships are in shallow water and can be raised. One tug can pull them over to the dry docks, and we can have them repaired and at sea by the time we could have towed them to America. And I already have crews ashore anxious to man those ships.
Mistake number three : Every drop of fuel in the Pacific theater of war is in top of the ground storage tanks five miles away over that hill. One attack plane could have strafed those tanks and destroyed our fuel supply. That's why I say the Japanese made three of the biggest mistakes an attack force could make or God was taking care of America.
Anyway you look at it--Admiral Nimitz was able to see a silver lining in a situation and circumstance where everyone else saw only despair and defeatism.
Tuesday, December 6, 2011
The Great Recession's toll: Impact in the Northwest
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and was not written by Leasing News nor information verified, but from the source noted. When an article is signed by the writer, it is considered a “by line.” It reflects the opinion and research of the writer. It is considered “bias” as it is the writer’s viewpoint.
New Feature added---SparkPeople
Leasing News has feature stories from this very popular web site, and has arranged to have it added to our “feature” section for those interested in living more healthy, eating more appropriately, and even losing weight.
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First Sound Bank Investor Pleads to Keep Bank Open
Deadlines have passed for arguments from First Sound Bank, Seattle, Washington, regarding its suit about the purchase of Puget Sound Leasing from Larasco as well as Louis and Richard Secord as individuals---- now basically closed down arguments, regarding paying Wells Fargo attorneys and other attorney fees, as per agreements. A full transcript of the trial has been posted and is available by mail (and may be eventually available by the interest).
Technically the bank won $1,244,751 on the claim regarding "Asset Purchase Agreement,” but they lost in the "employment agreement," awarding $2,077,767, and the same with Richard Secord, awarding $1,484,767. As important, they jury also ruled against the "breach of fiduciary duty" and "breach of contract claims" in favor of Larasco and the Secords, the original claim which brought the lawsuit.
To sum it up, the First Sound Bank doesn't have the money to pay the fees, and perhaps not even the award to the Secords. The bank equity as of September 30, 2011, according to the FDIC is $3 million with $11.6 million in non-current loans, charge offs of $4.2 million ($1.5 nonfarm non residential, $1.1 commercial and industrial, $795,000 in lease financing receivables) with a $6.9 million loss. Tier 1 risk based capital is 2.95%
The bank raised $3 million in 2010, the goal was $6 million, obviously hoping to win the case against the Secords.
The court records show a handwritten letter written to Judge Thomas S. Zilly form Doug Donnelly, the Donnelly Group:
“I am a relatively new shareholder in First Sound Bank and run an independent investment advisory team within Wells Fargo Advisors (no connection or affiliation with the Wells Fargo Leasing division, who had the legal dispute with the Secords). I was part of a group of local investors who recently injected new capital into First Sound Bank to recapitalize the bank and hopefully prevent a forced regulator takeover/shutdown.
“While you may just categorize this letter into the ‘getting something off one's chest’ or ‘sour grapes’ categories, my real intent to cover the "real life" impact of this jury decision. As a result of this surprising jury award another little local bank will be forced to shut its doors, 30+ bank employees will lose their jobs (with little hope of securing another bank job given the current economic environment), many small businesses will lose access to the necessary capital to keep their enterprises alive, and all the investors who recently provided the bank the emergency capital infusion will be wiped out.
And who really wins here? Yes, the Secord brothers will receive some money, but the big winners are the two legal teams, each who reaped large fees. In short, this decision and its devastating impact on our community feels very wrong and unjust.
Thank you for taking the time to read my thoughts. “
Letter from Investor:
Announcement: Purchase of Puget Sound Leasing by First Sound Bank
The Cleveland, Kingwood Drive, and Eagle Springs branches of Main Street Bank, Kingwood, Texas are now branches of Green Bank, according to the Main Street's Web site (www.msbanktx.com) and Green Bank Web Site (www.greenbank.com).
The web site notes "The Main Street Bank headquarters at 23970 Highway 59N remains available for questions and is expected to close soon. 281-348-2000."
In the press release from Ascentium Capital, August 10, 2011, it stated, "Ascentium Capital will acquire a $150 million portfolio of commercial loans and leases from Main Street Bank (“Main Street”), as well as a state of the art small business origination and servicing platform. Separately, Main Street Bank has reached an agreement to sell its branches and deposits to Green Bank, N.A. Following the completion of the sale of assets to Ascentium Capital and the branch/deposit sale, Main Street will liquidate and terminate its banking charter. Ascentium Capital does not intend to operate under a banking charter.
Ascentium Capital will be initially capitalized with $75 million of equity and a $250 million warehouse facility led by UBS Investment Bank. The company will also have access to an additional $35 million of equity capital to fund future growth..."
"Vulcan Capital was formed in 2003 and is headquartered in Seattle, WA. The firm serves as the investment arm of Vulcan Inc., the organization founded by Paul G. Allen in 1986 to manage his personal and professional endeavors."
Many former First Sierra officers and ex-employees jointed Ascentium Capital, not licensed at this time to do business in California, according to California Finance Lender's License information.
FDIC records show Green Bank was formed February 17, 1999 with 124 employees in 11 branches, as of September 30, 2011.
The bank made $1.7 million year-end 2010 and as of September 30, 2011 showed a $688,000 profit, net equity of $134.8 million with $13.8 million in noncurrent loans and leases, and $4.6 million in charges offs (over $4.6 million in commercial and industrial loans).
“Meet a Banker:” a photo on Green Bank's web site shows Dallas Commercial Banker Ray Kembel with former U.S. President George Bush: “When he's not biking, Ray Kembel is busily working to grow Green Bank's Commercial Banking operation in North Texas.”
Headline to story, "Leverages Real Estate Transactions to Grow Commercial Banking Arm in North Texas” with former president George Bush.
List of Bank Failures:
LeadFerret---completely free data on businesses
This is an excellent free site, easy to use, actually works, and was amazed at its capability. It can be used as a tool for names, emails, telephone numbers for existing types of industries, but most important, for local marketing, you can put in a zip code and decide how far you want the radius from the zip code and it brings up many names with their position, company, email, etc. You can go through it choosing the people and business you would like to call.
It has many other features, and is definitely worth a sales person's time to explore.
(Note: All 58 California Counties for Personal Property Tax)
Full Back Office List:
Career Crossroad— "Should I use Facebook to find a new position?"
Question: What do you think about using Facebook for finding a new position? I heard it’s a great resource …
Answer: NO – NO … And NO
Facebook is a Social Networking Site – used for sharing personal updates/pics, etc…; hence, a Social Site.
Though Social Media outlets will NEVER take the place of direct contact (phone / personal email), there are some sites that are MUCH better for Professional / Career networking such as LinkedIn.
If you are using your LinkedIn (or similar sites) Profile for Career networking, make sure it is appropriate and condensed / short and to the point. If you are going to include a picture on your Profile – MAKE sure it a professional one (pictures of your pet or your favorite vacation spot = Facebook aka a social networking site).
Again, if you are utilizing one of the Professional / Career sites, use it strictly for networking and gathering information. Sending a Hiring Manager a note that you are looking for a position – not the best option.
On the other hand if you are utilizing to: contact (1) Recruiters that specialize in your field (2) Gather company information of a potential employer, etc… – then these types of sites are a great resource.
Previous Career Crossroad columns:
Leasing Industry Help Wanted
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Laurie Bakke, President
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“True leasing differences”
With the move to true leasing because of the proposed accounting changes, we will have to reacquaint ourselves will some of the old---but still used true leasing terms and language inserts.
Stipulated loss value:
When a tax-motivated lease terminates early through a casualty loss (the equipment has been damaged or destroyed) or results in an early termination allowed by the Lessor, the resulting lease payoff is a great deal different from the payoff on a loan. A loan payoff, whether it be “Rule of the 78ths” or simple interest, need only deal with the unearned interest, plus the interest added on since the date of the last payment. In a lease the termination is a sale of the leased asset from the Lessor to the Lessee. It requires tax, legal and accounting changes.
On equipment leases, due to the accelerated depreciation or the special depreciation allowances brought on by the stimulus packages of the past few years, the leased asset will have a different value on the lessor’s income tax books than their accounting balance to provide the amount needed from the lessee to return the total investment plus earnings.
If the amount received from the lessee exceeds the income tax balance (undepreciated value) of the asset, the difference is taxable. The difference between the payoff (stipulated loss value) and the value remaining on the tax books will be taxed at the ordinary tax rate (34%-35%). This additional tax must be included in the sale amount which increases the sale amount thereby increasing the tax. This requires a computer based lease pricing program like “Super Trump” to determine the correct stipulated loss value.
Any amount by which the sale exceeds the original cost is taxed at the capital gains rates. If this occurs, it is usually happens early in the lease when the booked fees and other costs cause the payoff to be higher than the original equipment costs.
In the last few years I have noticed that lessor’s that only deal with bargain option leases, known as “capital leases,” who have not dealt
with true leases, are more than likely do not have the lease language for stipulated loss values in their lease form. In addition new language has been inserted into the old language by requiring the higher of the assets current value or the stipulated value whichever is higher.
Fair Market Value:
We all think we know the definition of “fair market value,” most often abbreviated FMV. It is officially defined as “ A value obtained in an arm’s length transaction between an informed and willing retail Lessor or seller (under no compulsion to sell) and an informed and willing retail Lessee or buyer(under no compulsion to buy).” However, in today’s world it needs to be enhanced in the lease agreement to define what kind of FMV are we looking for such as:
– Fair market value installed (highest value)
There is a requirement in the UCC that allows for a stated purchase option “if” the Lessor has documentation to show that the fixed purchase option is “the reasonably predictable future FMV.”
There is no such statement in the income tax requirements. The income tax requirements depend on proving “intent”. Therefore an early termination needs to be carefully handled so as to not upset the original tax assumptions. In addition, the lease should carry a tax indemnity clause that allows the Lessor to recover any tax losses due to an IRS challenge. The last tax indemnity should be for the corporate tax rate in case of any changes.
Mr. Terry Winders, CLP, has been a teacher, consultant, expert witness for the leasing industry for thirty-five years and can be reached at firstname.lastname@example.org or 502-649-0448
He invites your questions and queries.
Previous #102 Columns:
25% Off CLP Handbook
Regularly $59.95, now until December 31st, now $44.96
Great Christmas gift for staff or favorite leasing colleague.
Give the Gift of Education
The book was created to help leasing personnel study to become a Certified Lease Professional but it contains what every leasing person should know about this industry and if you want to succeed you need to get educated.
Here is a list of the contents:
• The History of Equipment Leasing
Click here and use the discount code above where you log in:
Top Stories---November 29--December 1
Here are the top ten sorties opened by readers:
(1) Radiance Capital, Tacoma, Washington
(2) Copier Wars---It's more than the lease payment
(3) Vehicle Lenders Group joins Funder List
(4) New Hires--Promotions
(5) Bank of the West Sees
(6) Vehicle Lenders Group joins
(7) Career Crossroad—"Why I left my previous employer..."
(8) Leasing 102 by Mr. Terry Winders, CLP
(9) How Did Leasing Stock Do in Yesterday’s Surge?
(10) U.S.A--Canada Salvation Army Kettles
Top Ten Christmas Oldies Songs
"Jingle Bell Rock," Bobby Helms
2. "Blue Christmas," Elvis Presley
3. "Rockin' Around The Christmas Tree," Brenda Lee
4. "Please Come Home For Christmas," Charles Brown
5. "Christmas (Baby Please Come Home)," Darlene Love
6. "White Christmas," The Drifters
7. "Run Rudolph Run," Chuck Berry
8. "Santa Baby," Eartha Kitt
9. "The Christmas Song," Nat King Cole
10. "White Christmas," Bing Crosby
Full Top 40 Christmas Oldies:
(Leasing News provides this ad as a trade for investigations
#### Press Release #############################
Consumers Are More Financially Confident
December Money Anxiety Index continues to improve showing a decline of 0.2 index points in the level of consumers’ financial anxiety.
SAN FRANCISCO, Calif. – The December preliminary Money Anxiety Index (www.moneyanxiety.com) decreased to 94.2, down 0.2 index points from November, and a continuation of a decrease in the level of consumer financial anxiety since July of this year. The Money Anxiety Index is still higher than its December 2010 level by 1.3 index points.
The improvement in the Money Anxiety index, which is based on real economic indicators, is impacted in part by the decrease of 0.4 percent in the unemployment rate to 8.6 in November. However, even though private-sector employment increased by 140,000 jobs, a large portion of the increase was in retail, which added 50,000 temporary jobs for the holiday season. Additionally, there was a drop of 315,000 people in the civilian labor force, which may reflect people leaving the workforce once their unemployment benefits are exhausted.
“As I projected earlier this year,” said Dan Geller, Ph.D. Trend Analyst at Money Anxiety Index, “consumers started feeling more confident about their finances in July of this year, which was reflected in the increase of 2.4 percent in consumer spending during the third quarter. I expect the fourth quarter to top the third quarter in terms of consumer spending and GDP growth.”
About Money Anxiety Index
The Money Anxiety Index (MAI) differs from other indices of consumer confidence mainly because its measurement is objective rather than subjective. MAI measures how economic indicators are impacting consumers’ behavior (objective) rather than how consumers say they feel about the economy (subjective), which is the methodology used by survey-based consumer confidence indices.
##### Press Release ############################
Dwolla Announces No Fee under $10
Fees for doing transfer from your bank to the merchant using Dwolla is 25 cents above $10, and free under $10.
Many merchants have a minimum credit card acceptance, so this opens up a new avenue.
Kingwood, TX -- Adopt-a-Dog
Dog Adoption Form
New Hampshire SPCA
11 a.m. - 4 p.m. Monday, Friday, Saturday and Sunday
Adopt-a-Pet by Leasing Co. State/City
Adopt a Pet
Classified ads—Internet Job Search
Leasing Industry Outsourcing
All "Outsourcing" Classified ads (advertisers are both requested and responsible to keep their free ads up to date:
How to Post a free "Outsourcing" classified ad:
Non-bank financing increases options for small business
Chinese bank in Saab rescue talks
Patricia Dunn, 58, ex-HP chair, dies after cancer bout
The Great Recession's toll: Tallying the impact in the Northwest
SparkPeople--Live Healthier and Longer
7 Hidden Ways to Get Better Sleep
NHL approves radical realignment plan
Frank Gore worthy of a statue, coach Jim Harbaugh says
Santa Clara, 49ers announce deal to pay for stadium
The modern spelling of the word "football" is first recorded, when it was used disapprovingly by William Shakespeare. Shakespeare's play King Lear (which was first published in 1608) contains the line: "Nor tripped neither, you base football player" (Act I Scene 4). Shakespeare also mentions the game in “A Comedy of Errors” (Act II Scene 1):
Am I so round with you as you with me,
You spurn me hence, and he will spurn me hither:
("Spurn" literally means to kick away, thus implying that the game involved kicking a ball between players. )
(Of course, football in England is quite different than as played in the USA, but "football" by Shakespeare survives. Editor)
Gov. Jerry Brown filing initiative to hike taxes on sales/wealthy
Santa Clara police captain named first woman to lead San Rafael Police dept., to move with her life partner to Sonoma
San Jose foreclosure case is both tragic and complicated
“Gimme that Wine”
Off-Premise Wine Sales Increase 3.2 Percent in November
Robert Mondavi's Napa Valley estate sold
Two prominent Napa restaurants fail food inspections in past month
Free Mobile Wine Program
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Leasing News Wine & Spirits Page
This Day in History
1492-- Christopher Columbus lands on the island of Santo Domingo in search of gold.
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