Leasing News

Bruce McKeel, vice president and general manager, equipment finance division of Prescott, Ball & Turben, San Francisco, Calif. Bruce has been in the leasing industry since 1972, and has held the positions of vice president at HBE Leasing Corp. and regional vice president of lease underwriting at ‘Equilease Corp.

He holds a B.S. degree from the University of Oregon and did graduate study at New York Institute of Finance and Stanford University. He was also special gifts vice chairman for the Bay Area United Way in 1978.

McKeel lives with his wife Lynn, an office space designer, in the lovely suburb of Hillsborough, CA, and enjoys music and as much golf as he can mange to squeeze in his spare time.

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Classified Ads---

“I just secured a leasing position and should be back

to work on Feb. 10, 2003. Please cancel my "Job Wanted" ad.

“ Although this position came through my network of

contacts and not through my posting on your website, I did have an

opportunity to talk to some great folks and I really appreciate the assistance you

provided.”

Regards,

Steven Muller

aka leaseman222@yahoo.com.

Here are current “Help Wanted” Ads

Sales: LCA is a national equipment leasing company seeking results-oriented, qualified sales professionals with outstanding performance in the lease industry. We offer competitive salary, commissions and benefits. Fax: 248-524-0267 email: kbernia@leasecorp.com

Sales: Small ticket leasing reps, General equip. & medical, Municipal Vendor leads are provided.

Fred St Laurent freds@bwresults.com

SALES: Lessor/Broker seeks experienced small - mid ticket reps (IT, Furniture, Telcom, Medical and General), 2 in CA, 2 Nationally and 2 in NE. Must have a book of business. Qualified Vendor leads available, strong commission & support, Draw and benefits. Call 617-641-9628 ext.11 or email MarkG@IntegrityLeasing.com

Sales: Lessor/Broker-Arizona- need experienced mid-market salesperson, location open, strong medical bkrnd pref. Top comm, draw, benefits. Call John Torbeson 888 607 6800 john@odysseyequipfinance.com

Jobs Wanted: http://65.209.205.32/LeasingNews/JobPostings.htm

American Express Business Finance—Don’t Leave Your Home, Leave Our Office

“It is true AMEX has terminated all of their sales assistants. I know

several people who work for them and things are very unsettled. The sales

personnel are responsible for their own processing and the documentation

process is supposed to be moved in house in February. Based upon prior

experience with them and the feedback from the associates still there,

service in the future is a big ????.

“There are really good people leaving and looking for employment. They are

scattered throughout the U.S. and looking for jobs. I know of one

individual in Tennessee looking and she is really good. It is sad to see

the way they treat their employees.

“Please do not publish my name. Management would be able to determine the

employees I know and where the information has been divulged.”

(name with held )

Leasing News welcomes any comment by American Express Business Finance.

FirstCorp----Not Available

Leasing News has confirmed that First Corp is Closing the Portland, Oregon Office.

First Portland Corporation is closing its Portland, Oregon office. Spokesman will

not deny this, but have confirmed negotiations regarding the portfolio, meaning

assets and liabilities, are at attorney’s office in “final draft” form.

Located at: 7145 SW Varns Street

Portland OR 97223.8057

USA

Tel: 800.247.3722

Fax: 888.510.1500

Leasing News was informed Jim Merrilees was leaving the company before the decision was made to close the operation. The opportunity to establish a vendor/

captive lessor/wholesale program with Netbank came up from a close friend

of his, who helped open the door. Merrilees will not confirm nor deny this

and appears to be unavailable for comment at this time. This story was told

to Leasing News several times and we believe is accurate as they came

from reputable sources.

If the negotiations are not completed, Leasing News is informed Firstcorp will

be shut down such as Humboldt Bancorp closes Bancorp Financial. Their website

states “Since 1981, First Portland Corporation DBA FIRSTCORP has specialized in equipment finance and leasing solutions for broadcasting.”

Another section advertised:

“FOR MORE INFORMATION OR TO RECEIVE A PROSPECTUS, CALL:

· 1 to 5 year notes ($5,000 minimum)A national leasing company with a

20 year history Offered by First Portland Corporation

· Interest paid monthly, quarterly,

semi-annually or annually

EARN UP TO 10.5%

FIXED RATE INVESTMENTS

SALES ARE BY PROSPECTUS ONLY. INVESTMENTS ARE SUBJECT TO CERTAIN SUITABILITY STANDARDS, ARE NOT INSURED OR GUARANTEED BY ANYONE. PLEASE CONSULT YOUR FINANCIAL ADVISOR BEFORE MAKING THIS OR ANY OTHER INVESTMENT DECISION.

(503) 684-3417 (local) or email FIRSTCORP

DAN KILINSKI (800) 247-3722”

( He was not available when we called. We asked to speak with the leasing department, and the operator told us no one was available at the time, but

to leave our telephone number, which we did. editor)

http://two.leasingnews.org/cartoons/call_important.jpg

__________________________________________________________________

Ken and Sean Wheeler Misrepresentation

“I received today, totally unsolicited, a fifteen page fax from Equipment

Financing group, Fresno, CA, representing themselves as a funding

source. I am sure I was one of many send out unsolicited. Any

information I receive where I can not tell who the contacts are or other

significant information about, does not pass my "smell" test. The cover

page includes the ELA and UAEL logos. I check both member lists an this

company is not listed. I checked out their website and find that the

contact is Ken Wheeler, enough said.

“I would hate to see people get hurt by these guys who misrepresent

themselves as ELA and UAEL members. I think ELA, in particular, should

know about their use of the ELA logo since they have the legal resources

to stop its use.”

Steven B. Geller, CLP

Leasing Solutions LLC

20 Dike Drive

Wesley Hills, New York 10952

845-362-6106

fax 845-354-2803

cell 914-552-0842

www.leasingsolutionsllc.com

(The membership directory of the United Association of Equipment Leasing and

Equipment Leasing Association does not list the company as a member, or Mr.

Ken Wheeler. Leasing News double-check Mr. Geller’s observation. There does not appear to be an application, but that is besides the point, as they are not a member and should not advertise that the Equipment Financing Group of Fresno are members.

We have a copy of a mailed “manual” with all the forms, and it basically matches

the forms that 1stLease under Sean Wheeler at one time produced. Leasing News

has reports from brokers who are having difficulty with a company called Capital

Bank Leasing in Reedly, California that has Sean Wheeler’s name involved. We

are working on a story regarding leases not funded by this company, and hope

to have a report soon. We hope to have all sides to the story.

For more information, please go to previous stories at:

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Two plead guilty for roles in PinnFund/PinnLease scheme

By Associated Press

SAN DIEGO (AP) Two former executives of a mortgage-lending firm pleaded guilty Thursday to federal charges for their roles in a massive Ponzi scheme that resulted in losses of more than $200 million for investors.

Keith Grubba, the former president and co-owner of PinnFund USA, admitted that he conspired with PinnFund partners to deceive investors and filed false income tax returns seeking to avoid $2.5 million in payments. Grubba faces up to 30 years in prison when he is sentenced in April.

Michael Trap, a former manager of a related company, PinnLease USA, admitted lying to a federal grand jury investigating the scheme. He faces up to five years in prison when he is sentenced in April.

PinnFund, based in Carlsbad, Calif., collected investments for five years before being shut down by court order in March 2001 following a federal investigation. Investigators said much of the money collected went to support the lavish lifestyle of PinnFund's chief executive, Michael J. Fanghella.

Fanghella pleaded guilty last year to tax evasion and conspiracy to commit fraud and money laundering. He is to be sentenced on Monday and faces up to 30 years in prison.

Four others connected to the case were indicted on Thursday.

http://www.leasingnews.org/docs/Pinn_1.htm

GATX Corporation Reports 2002 $29.4M 4th Q Loss

CHICAGO, -- GATX Corporation announced Thursday its 2002 fourth quarter and full year results. For the 2002 fourth quarter, GATX reported a net loss of $29.4 million or $.60 per diluted share compared to a net loss of $12.1 million or $.25 per diluted share in the prior year period. For the full year, GATX reported net income of $.3 million compared to $172.9 million or $3.51 per diluted share in 2001.

The 2002 fourth quarter and full year results include a number of one-time and air-related items which are detailed in an accompanying table. Significant 2002 fourth quarter items include $18 million of after-tax impairment charges on aircraft including GATX's 50% share of an impairment charge on Fokker aircraft owned by Pembroke, an $11 million after-tax charge for a reduction in workforce due to the company's exit of the specialty and venture businesses and company-wide reorganization, and a $9 million after-tax write-down of goodwill associated with the company's exit from the venture leasing business.

Ronald H. Zech, chairman and president of GATX, stated "Results for the 2002 fourth quarter and full year reflect the challenges we continue to face in our markets. The rail and technology sectors continue to mirror weak economic conditions, and volatility and uncertainty remain in the air sector. We have offset some of this pressure by aggressively maintaining asset utilization, reducing costs, and maximizing our liquidity position, but we cannot entirely overcome larger market forces.

"Although financial results for the year were disappointing, a number of steps taken in 2002 provide a basis to leverage our performance as underlying markets recover:

full press release at:

http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=GMT&script=410&layout=-6&item_id=376689

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CIT is Stable—Fitch Report

(Leasing News has been reporting this for quite some time as CIT has

it together, especially in these very rough times.)

NEW YORK----Fitch Ratings affirms CIT Group Inc.'s (CIT) and related entities' senior debt, subordinated debt, preferred stock, and commercial paper ratings at 'A', 'A-', A-', and 'F1', respectively. The Rating Outlook is Stable. Approximately, $32 billion of debt and preferred stock are covered by Fitch's actions.

Since returning to the public equity markets in July 2002, CIT has successfully improved several key elements of its risk profile including liquidity, capitalization and leverage. Additionally, in spite of weak loan demand and heightened credit losses, CIT's operating results have remained solid. Continued improvement in all metrics, particularly capitalization and leverage, is expected as internal capital is projected to grow at a faster rate than managed assets. Given the increased risk in the operating environment, particularly event risk, it is prudent for CIT to maintain its unadjusted tangible equity divided by managed assets ratio above 10% going forward. At Dec. 31, 2002, this ratio stood at 9.78% up from 9.30% at Sept. 30, 2002.

Fitch remains concerned regarding CIT's asset quality. CIT's credit metrics are significantly worse in the 2001-2002 period than during the last domestic recession, 1992-1994. While some of the current weaker asset quality is due to business mix, credit losses in CIT's equipment finance unit, a charter business, are believed to be at an all-time high. Much of the problems encountered in equipment finance have been due to a change in the market as a result of equipment deflation. Cash recoveries from equipment repossessed in 2002 has been roughly 50 cents on the dollar versus 80 cents in previous periods according to management. While management believes that asset quality began to firm and improve in the equipment finance in the December 2002 quarterly period, as reflected by trends in the inflows of delinquent and non-accruing loans as well as internal risk rating scoring data, the domestic economy remains fragile. Other portfolios of concern include telecommunications and venture capital. Although smaller than equipment finance, the loss severity could be substantially higher. Fitch notes that CIT's revenue stream to date has been sufficient to allow the company to manage through its problems. Nevertheless, Fitch will be closely monitoring the inflows of loan delinquencies and non-performing assets in 2003 as part of its assessment of credit quality.

Relative to other aircraft leasing companies, CIT does not have significant new equipment placements or lease expirations in 2003. However, CIT does have sizable exposures to US Airways Group and UAL Corp. (UAL), plus it is a participant in the $1.2 billion debtor-in-possession loan to UAL. Although all of CIT's aircraft loans and leases are secured, the company is exposed to equipment impairment and this could be significant if a major airline is liquidated. CIT placed $96 million of its UAL loans on non-accruing status in the December 2002 quarter. Revenue received from UAL going forward will be used to reduce loan balances.

In addition to asset quality, Fitch continues to closely monitor CIT's liquidity and access to the public asset-backed securities term markets. Aside from cash needed to operate the business, Fitch estimates that at Dec. 31, 2002, CIT had available liquidity, including unused conduit facilities, of approximately $4 billion. CIT projects that it will complete two asset securitizations, home equity and equipment finance, during the first half of 2003. The completion of these transactions is important as the establishment and commitment to utilize off-balance sheet sources of liquidity, particularly ABS, by CIT were key drivers in Fitch's decision to raise the company's ratings to current their levels on July 2, 2002.

Based in Livingston, N.J., CIT Group Inc. is one of the largest commercial finance companies in the world with managed finance receivables and operating leases of almost $50 billion Dec. 31, 2002. CIT has leading market positions in a variety of business segments.

Fitch has affirmed the following ratings:

CIT Group Inc.

-- Senior debt 'A';

-- Subordinated debt 'A-'

-- Preferred stock 'A-'

-- Commercial paper 'F1'.

-- Rating Outlook Stable.

Newcourt Credit Group Inc. (Guaranteed by CIT Group Inc.)

-- Senior debt 'A';

-- Rating Outlook Stable.

Newcourt Financial (Australia) Ltd. (Guaranteed by CIT Group Inc.)

-- Senior debt 'A';

-- Commercial paper 'F1';

-- Rating Outlook Stable.

AT&T Capital Corp. (Guaranteed by CIT Group Inc.)

-- Senior debt 'A';

-- Rating Outlook Stable.

CONTACT:

Fitch

Philip S. Walker, Jr., CFA, 212/908-0624

John S. Olert, 212/908-0663, New York

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CIT Small Business Lending President John Canning Recognized as One of Top

25 Most Influential People in Small Business Lending

LIVINGSTON, N.J.,-- CIT Small Business

Lending (SBL) Corporation, a New Jersey-based subsidiary of CIT Group Inc.,

(NYSE: CIT), and the nation's number one SBA lender, proudly announced today

that CIT SBL President John Canning has received a special recognition as one

of the most influential leaders in the small business lending industry. The

recognition was bestowed by The Coleman Report -- a leading news information

source for the SBA lending industry.

John Canning was honored for his successful leadership at CIT Small

Business Lending despite the increasingly challenging industry landscape,

which has put pressure on a number of other non-bank lenders. CIT SBL has

been consistently ranked among the top SBA lenders in the country, holding the

number one spot for the last three years.

"Mr. Canning has been instrumental in steering the company through a

number of different parent companies, while maintaining the organization's

consistency and focus in the marketplace," said Robert Coleman, publisher of

the Coleman report. "CIT Small Business Lending has been the number one

lender for three years in a row and continues to set industry standards in

loan generation"

"I am extremely honored by this recognition and accept it on behalf of our

entire small business lending team," said Mr. Canning. "CIT SBL has been

supporting American small businesses for more than a decade and our goal is to

continue to help entrepreneurs realize the dream of owning their own

business."

About CIT Small Business Lending Corporation (SBL)

CIT Small Business Lending Corporation, a subsidiary of CIT Group Inc.,

offers Small Business Administration (SBA) loans to finance business

acquisitions, owner-occupied real estate purchases and franchise start-ups

though a network of field representatives. The nation's #1 SBA lender, CIT

Small Business Lending has been designated a "Preferred Lender" by the SBA and

can provide quick credit decisions and loan closings. The company's website

and online SBA loan application are located at

http://www.smallbizlending.com .

About CIT

CIT Group Inc. (NYSE: CIT), a leading commercial and consumer finance

company, provides clients with financing and leasing products and advisory

services. Founded in 1908, CIT has nearly $50 billion in assets under

management and possesses the financial resources, industry expertise and

product knowledge to serve the needs of clients across approximately 30

industries. CIT holds leading positions in vendor financing, U.S. factoring,

equipment and transportation financing, Small Business Administration loans,

and asset-based and credit-secured lending. CIT, with its principal offices

in New York City and Livingston, New Jersey, has approximately 6,000 employees

in locations throughout North America, Europe, Latin and South America, and

the Pacific Rim. For more information, visit http://www.cit.com .

SOURCE CIT Small Business Lending Corporation

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Sterling Financial Corporation Posts Record 2002 Earnings

Sterling Financial Corporation (Nasdaq: SLFI) announced record earnings for the quarter and twelve months ended December 31, 2002.

J. Roger Moyer, Jr., President and Chief Executive Officer of Sterling, commented, "In the fourth quarter, Sterling was able to continue its 2002 trend of posting record quarterly earnings, resulting in net income of $6,799,000, earnings per share of $0.40, and return on realized equity of 14.91%." Moyer added, "For the year ended December 31, 2002, Sterling posted record net income

of $24,745,000, an increase of 21.7% over 2001. This earnings performance is the result of Sterling's profitable-growth strategy, which focuses on sustainable revenue growth, rather than cost-cutting measures."

Three Months Ended December 31, 2002

Sterling's net income was $6.799 million for the quarter ended December 31, 2002 an increase of $1.514 million, or 28.6% from 2001. Basic and diluted earnings per share totaled $.40 for the fourth quarter 2002 versus $.34 for the same period in 2001, an increase of 17.6%.

Fourth quarter 2002 results were supported by a $4.101 million, or 25.9%, increase in net interest income. The acquisition of Equipment Finance, Inc. in February 2002, contributed $3.0 million to fourth quarter 2002 net interest income that was not in fourth quarter 2001 results. Relatively stable market interest rates and growth in core deposits also provided support to net interest income. Noninterest income also contributed to Sterling's record earnings. Strong mortgage banking income fueled the 10.5%, or $1.168 million, growth in

noninterest income in 2002 versus the same period in 2001.

As a result of a modest decline in asset quality ratios, and uncertainties in the national and local economies, Sterling increased its provision for loan losses to $1.077 million for the fourth quarter of 2002, compared to $130 thousand in 2001.

Year Ended December 31, 2002

Net income for the year ended December 31, 2002 totaled $24.745 million, an increase of $4.411, or 21.7%, over 2001's net income of $20.334 million. For the year ended December 31, 2002, basic earnings per share increased 13.8%, totaling $1.48 in 2002, versus $1.30 in 2001. Diluted earnings per share totaled $1.47 for the year ended December 31, 2002.

Total assets increased to $2.156 billion at December 31, 2002, an increase of 15.8% from December 31, 2001. Contributing to the growth in assets was the February 2002 acquisition of Equipment Finance, Inc., which had assets of approximately $100 million. In addition to the $81 million of loan receivables acquired through the Equipment Finance, Inc. transaction, Sterling affiliates

generated loan growth of in excess of $116 million during 2002. Asset growth was funded by $166 million growth in deposits, as well as a $20 million trust preferred capital security offering that closed in March 2002.

Sterling Financial Corporation is a multi-bank financial holding company that operates 52 banking locations in south central Pennsylvania and northern Maryland, through its subsidiary banks, Bank of Lancaster County, N.A., Bank of Hanover and Trust Company, First National Bank of North East, and Bank of Lebanon County. Sterling Financial Corporation also consists of a family of

financial services organizations, which includes Town and Country Leasing, Lancaster Insurance Group, LLC, and Equipment Finance, Inc. Sterling Financial Corporation also owns Sterling Financial Trust Company, which manages nearly $1 billion in assets.

CONTACT:

J. Bradley Scovill

Sterling Financial Corporation

Phone Number: (717) 581-6030

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Economy grows at just 0.7 percent rate in fourth quarter as consumers turn cautious

By Jeannine Aversa

ASSOCIATED PRESS

WASHINGTON – The U.S. economy slowed dramatically in the final quarter of last year, growing at a annual rate of just 0.7 percent as consumers turned cautious in the face of war worries, a rollercoaster stock market and a stagnant job climate and increased their spending by the smallest amount since 1993.

The meager rise in gross domestic product in the fourth quarter of 2002 came after the economy grew at a respectable 4 percent rate in the third quarter, the Commerce Department reported Thursday.

GDP measures the total value of goods and services produced within the United States and is considered the broadest barometer of the economy's health.

"The rollercoaster ride continues as the economy just cannot sustain solid growth," said economist Joel Naroff, president of Naroff Economic Advisors. "Growth is up, growth is down, the economy's growth is all over the town."

The performance – weaker than the 0.9 percent increase analysts were predicting – gave the fourth quarter the distinction of being the worst quarter for GDP in 2002. It also marked the weakest showing since the economy actually shrank at a 0.3 percent rate in the third quarter of 2001 as the country was mired in its first recession in a decade.

Although the economy ended 2002 on a sour note, for all of 2002 the economy grew by a decent 2.4 percent. While that marked a big improvement over the tiny 0.3 percent rise registered in 2001, it was still considered weaker-than-normal growth for the U.S. economy.

The economy, knocked down by a recession that began in March 2001, has been struggling to get back on sure footing. Economic growth has been uneven, with a quarter of strength, followed by a quarter of weakness. That has presented challenges for President Bush, who wants to get the economy back to full throttle and doesn't want economic woes to linger as he gets ready for his 2004 re-election bid.

To help jolt economic growth, Bush has offered a 10-year, $674 billion tax-cut proposal. Democrats have their own, smaller-scale plans.

Commerce Secretary Don Evans said the GDP report underscores the need for Congress to enact the president's plan and shows "that our nation's economy is not yet growing at its fullest potential."

The Federal Reserve decided Wednesday to hold a key interest rate at a 41-year low of 1.25 percent, with the hope that will spur consumers and businesses to spend and invest more, bolstering economic growth. The Fed slashed interest rates a whopping 12 times, starting in January 2001, with the last rate reduction coming in November 2002, in a bid to energize the listless economy.

Consumers have been virtually the sole source of support keeping the economy going.

But in the fourth quarter of 2002, they grew tired. Consumer spending, which accounts for two-thirds of all economic activity in the United States, grew up a rate of just 1 percent in the final quarter of last year. That was down from a brisk 4.2 percent growth rate in the third quarter and marked the worst showing since the first quarter of 1993.

All of the weakness in consumer spending in the fourth quarter reflected a sharp cut in spending on "durable" goods, big-ticket manufactured products such as cars and appliances. Consumers reduced such spending at a 7.3 percent rate. That was a big turnaround from the astounding 22.8 percent rate of increase in the third quarter and marked the largest cutback in spending on durable goods since the first quarter of 1991.

Economists were predicting consumers would lose some of their appetite for spending in the face of worries about a possible war with Iraq, a lackluster job market and a turbulent stock market.

In other economic reports from the Labor Department, workers' wages and benefits grew by 0.7 percent in the last three months of 2002 following a 0.8 percent gain in the previous quarter. And, new claims for unemployment benefits last week rose by a seasonally adjusted 14,000 to 397,000.

Still, most economists believe consumers will keep their pocketbooks and wallets sufficiently open to prevent the economy from backsliding into a new recession.

For the economy to get back on sure footing, a sustained turnaround in business investment is necessary, economists say.

Businesses, worried about a war and other uncertainties, have been in no mood to go on hiring sprees or buying binges when it comes to capital investments in plant and equipment.

But there was some encouraging news in the fourth quarter on this front. After eight straight quarters of cutting capital spending, businesses boosted such investment at a 1.5 percent rate in the fourth quarter. That was an improvement over the 0.8 percent rate of decline in the third quarter and marked the best showing since the third quarter of 2000.

All of the strength, however, came from spending on equipment and software. Companies continued to cut investment in new plants and buildings.

Businesses, however, added less to their stockpiles of unsold goods in the fourth quarter, resulting in a 0.6 percentage-point reduction to GDP. The bloated trade deficit also was a drag on fourth-quarter economic growth.

An inflation gauge tied to the GDP rose at a 1.9 percent rate in the fourth quarter, up a bit from the 1.7 percent rate in the third quarter as oil prices rose amid war worries. Still the latest reading suggests inflation is under control.

(Meanwhile, many retail shops remain empty during the weekday, with

clerks talking to themselves, and the bad news seems to feed on itself. Editor)

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What Bush didn’t tell you: U.S. firms and Iraq agree on oil deal

daily_news@landlinemag.com

Official news from the Owners and Operators of Independent Truck Drivers Association, who follow the price of diesel very closely

As President Bush outlined his domestic agenda Jan. 28 while making the case for removing Saddam Hussein from power, the United States had already turned to an unlikely helpmate to alleviate its severe oil shortages – Iraq.

In a bit of "business as usual" irony, the oil-rich state doubled its oil exports to America just weeks before a possible invasion, thereby helping U.S. refineries cope with other pressing international issues, including the oil strike in Venezuela, the London Observer reports.

After the loss of 1.5 million barrels per day of Venezuelan production in December, the oil price rocketed, and the scarcity of reserves threatened to do permanent damage to the U.S. oil refinery and transport infrastructure.

To keep the pipelines flowing, President Bush stopped adding to the 700-million-barrel strategic reserve.

But ultimately, Chevron, Exxon, BP and Shell came to the rescue, doubling imports from Iraq from 500,000 barrels in November to more than 1 million barrels per day to solve the problem. Essentially, U.S. importers diverted 500,000 barrels of Iraqi oil each day that were headed for Europe and Asia.

The trade, though bizarre given the possibility of an invasion of Iraq, is legal under terms of the United Nations’ oil for food program.

But for war opponents, it shows oil is the unspoken reason for military action in Iraq, which has the world's second largest proven reserves – some 112 billion barrels, and at least another 100 billion of unproven reserves – according to the U.S. Department of Energy.

While the State Department is mindful of cynical world opinion about U.S. war aims and the oil connection, officials do not always stick to the script, the Observer reports.

Grant Aldonas, undersecretary at the U.S. Department of Commerce, is quoted as saying war "would open up this spigot on Iraqi oil, which certainly would have a profound effect in terms of the performance of the world economy for those countries that are manufacturers and oil consumers."

US deficit seen at $199b in '03

CBO's estimate doesn't include tax cuts, war costs

By Peter J. Howe,Boston Globe Staff

Congressional budget watchdogs warned that the country will run a $199 billion budget deficit this year, over $50 billion more red ink than last forecast.

The projections of deficits returning to levels last seen a decade ago come even before accounting for the costs of a possible war in Iraq and the new round of tax cuts pushed by President Bush in his State of the Union address Tuesday. A growing deficit could make it harder for Bush to persuade Congress to fully embrace a new round of tax breaks.

Economists and business leaders, meanwhile, said tax cuts are likely to have much less impact on US jobs and investment in the near term than a resolution of the growing threat of war with Iraq.

''There's a strong economic rationale for getting this Iraq business over with one way or the other to remove this pall over the economy,'' said Bruce Bartlett, a Republican senior fellow with the National Center for Policy Analysis.

''It's clear that investment is the thing that's holding back economic growth more than anything else,'' Bartlett said. ''Consumption is OK. Government spending is OK. It's really the lack of investment that's got things in the toilet.'' Agreed Brian R. Gilmore, executive vice president of Associated Industries of Massachusetts, a top state business lobby: ''Waiting for the other shoe to drop on Iraq is certainly the thing that will cause people to pause.''

With federal spending on the rise as tax revenues slip, the Congressional Budget Office raised its projected deficit for the current fiscal year that ends Sept. 30 to $199 billion from $145 billion, the highest level since 1994. The CBO also predicted the government will not run a surplus again until 2007, a year later than past estimates, although long-term budget projections have veered wildly in recent years.

Len Burnam, co-director of the Urban Institute-Brookings Institution Tax Policy Center, said tax cuts and Medicare prescription drug benefits that Bush proposed Tuesday, and emerging Bush plans for tax-free savings accounts, could total $2 trillion over the next 10 years.

''Politically, there has to be some tax cut this year to make it appear the president and Congress are doing something about the recession,'' Burnam said. ''But we are not going to get the $1.4 trillion in tax cuts proposed by the president.''

Reaction to the new budget deficit numbers broke along partisan lines. Senator Kent Conrad, a North Dakota Democrat who serves on the budget committee, said in light of the new numbers, ''The president's agenda is reckless and threatens the long-term fiscal health of the nation.''

The Bush administration has already warned that its budget proposal coming next week will predict a $300 billion deficit in 2004, although officials argue that sum is manageable as a percentage of gross national product.

House Budget Committee chairman Jim Nussle, an Iowa Republican, said more tax cuts would drive growth that would reduce deficits over time. ''We need to be thinking not just about tomorrow but next year, five years, and even 10 years from now,'' Nussle said.

In his Tuesday night address to the nation, Bush called on Congress to make tax cuts planned for 2004 and 2006 - part of the nine-year, $1.35 trillion tax cut passed in 2001 - effective immediately and make them permanent. Bush also called for quick action to eliminate the so-called marriage penalty of higher taxes on couples who file jointly instead of as individuals and for moving to a $1,000 tax credit for dependent children.

As expected, Bush called for virtually eliminating taxes on corporate dividends, which he said would be especially helpful for 10 million senior citizens who get dividend income. And the president proposed $400 billion in new Medicare spending for prescription drugs and a $1.2 billion initiative to spur development of automobiles powered by hydrogen fuel cells.

''If you are worried about budgets ... the first question you ask is: `How do you create growth in the economy?''' Bush said yesterday in a Michigan speech. ''The more growth there is, the more likely it is you'll have tax revenues.''

Assessing the tax measures Bush outlined Tuesday, Bartlett said: ''I think speeding up tax cuts is actually not very important. Doing something to relieve double taxation of corporate benefits is important. This is one of the few things the government can do that unambiguously will cause the stock market to rise.''

Gilmore said the most important move Bush and Congress can make is ''encouraging employers to increase their capital spending. That would be welcome, and it is needed. Things aren't getting worse, but they certainly aren't getting better quickly.''

One Bush proposal would allow many small companies to take a tax deduction for up to $75,000 in capital investments annually. Jerry Jasinowski, president of the National Association of Manufacturers, said the Bush proposals would ''increase consumer income, encourage expansion of small business, and reinvigorate the stock market.''

Gene Sperling, who headed the National Economic Council under former President Clinton, told Senate Budget Committee members that Republicans and Democrats should agree on a one-year package of economic stimulus proposals.

Sperling said policy makers erred last year in approving a measure that spread corporate investments over three years. As a result, companies that ''were holding back even planned business investment in 2002 were given no incentive to accelerate their plan,'' Sperling said.

But Hugh Johnson, chief investment officer at First Albany Corp., said: ''If there's any problem for US investors, they're worried that war with Iraq will lead to a further increase in oil prices and problems for the economy.''

The CBO's latest long-term budget projections envision a $1.3 trillion total surplus between 2004 and 2013, down sharply from the $5.6 trillion 10-year surplus estimated in 2001 that helped raise support for the first big Bush tax cut.

CBO economists predicted the real gross domestic product will grow at an annualized rate of 2.5 percent this fiscal year and 3.6 percent in 2003-04.

Peter J. Howe can be reached at howe@globe.com. Material from Globe wire services was used in this report.

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UCLA study finds the Internet poses a major threat to television

By Dawn C. Chmielewski

San Jose Mercury News

Television executives have more to fear than a future filled with gross-out reality shows. The Internet is rapidly eroding television viewing hours and emerging as a powerful information medium in its own right, according to a new study from the University of California at Los Angeles.

In the same way that television eclipsed radio as the primary medium for entertainment and information, the Internet poses a major threat to television.

``The thing that's easy to prove is that Internet users watch less television,'' said Jeff Cole, director of UCLA Center for Communication Policy, which conducted the study. ``What we've been trying to see is does their Internet time come out of television time. The early indications are pretty clear that it does.''

In a survey of 2,000 Internet-connected and Net-less households throughout the United States, the UCLA Internet Report found a dramatic drop in television viewing among experienced Internet users.

Internet users watched about 4.8 fewer hours of television each week than non-users. And the decline in viewing hours grows more dramatic, as Internet users gain more experience. Internet veterans watch about 5.8 fewer hours of TV than non-users.

No other media form -- not radio, not magazines, not newspapers or books -- suffered as pronounced a decline.

``Just as radio was the victim when television evolved in the early 1950s, now television is becoming the casualty of increasing Internet use,'' the study found.

Here are some notes from the study

11.1 -- Average hours Americans spent online each week.

13 -- Percentage increase from 2001.

11.2 -- Average hours online-Americans watched television each week.

9 -- Percent decrease from 2001.

29 -- Percent of Americans who did not use the Internet in 2002.

16 -- Hours non-Internet users watched television.

32 -- Percentage of non-users who say they either do not have a computer or their computer is inadequate to access the Internet.

47 -- Percentage of non-users who say they'll likely go online this year.

45 -- Percentage of e-mail users at the workplace who say their e-mail is monitored by employers.

85 -- Percentage of Internet-using children who use it at home.

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Rochester Equipment Leasing, Inc. to offer Commercial Vehicle Loans and Leases

Rochester Equipment Leasing, Inc. is pleased to announce that they have entered into a partnership that will allow them to further expand their product line. Starting this month, Rochester Equipment Leasing will now have the ability to offer Leases and Loans on all types of vehicles that are used for business purposes.

This new national program will include both new and used vehicles. The determination of whether the financing will be a loan or lease will depend on the location (state) of the lessee. The program is for primarily "A" rated businesses throughout the continental U.S.

Rochester Equipment Leasing CEO, Gregory Lefebre commented, "We've been looking for a program like this for over ten years. We are pleased to be able to offer this to our past customers, which are now at over five hundred and new ones as well."

REL, Inc. is a national company that specializes in equipment financing and leasing for all types of equipment and furniture, as well as working capital loans for medical professionals.

Greg Lefebre

CEO

Rochester Equipment Leasing, Inc. & e1Lease.com

"Your National Source For Business Leasing &

Working Capital Loans for Medical Professionals"

(800) 388-3430 x302

Fax (877) 617-1561

Local: 231-1550 x302

http://www.RochesterLeasing.com

http://www.e1Lease.com

36 West Main Street, Suite 777

Rochester, NY 14614

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We Get Letters---

I did not receive the Leasing News today? I might be having

email problems. Could you re send

Thank you,

George Meyer,Account Executive

GMCapital

Ph: 877-462-2748

Fx: 650-553-9515

George@GMCap.com

www.GMCap.com

(Will do. We get several such request, although we note often that Leasing News is available at www.leasingnews.org, where you can also click on the headlines

to go to specific stories, plus look at issues from the past in “archives” for free.

Please remove me

I have filled out your unsubscribe form and emailed you once to

remove my name from your email list with no success. Can you please remove

me manually? I just don't have the time to read it anymore. I am not sure

what email it comes under...

(Name With Held)

(We normally removed a name right after we receive an e-mail, but when we have to do a search, we do it at the end of the day. This e-mail request came at the end

of the day, so it was not until the next day that we found the person’s e-mail

address in our mailing list, and removed it. We try to remove names from

the mailing list ASAP. Editor )

Thanks for the plug on our calculator. I got several calls from people

who had never seen our site.

Bob Rodi, CLP

President

LeaseNOW, Inc.

drlease@leasenow.com

www.leasenow.com

1-800-321-LEASE (5327) x101

http://two.leasingnews.org/Recommendations/lease-finance.htm

Do you have to report all this bad news?

Your mother

(Gee, Mom, I’m not a little kid any more. I can take it.

Christopher )

---

Even though sports have nothing to do with

leasing, I welcome its inclusion in Leasing News since

it gave me the opportunity to gloat over picking the

Super Bowl winner. But seriously, what does Billy

Joel's trivial car accident reported so widely already

in the media have to do with our work, other than fuel

speculation around the water cooler as to whether his

substance dependency problems were a factor?

Jim Fleming

nationalbusinesscredit@yahoo.com

http://www.leasingnews.org/archives/Januray%202003/1_27_03.htm#billy

(Have you been talking to my mother? Sue and I are big fans of Billy Joel. Coincidently, we ran into him at a “small Italian restaurant”-like eight tables-in Boston, Ma. We told him “Moving On” was very emotional to us and brought a new dimension to his songs. It pains us that he is having “difficulties.” The news of his “difficulties” was not in West Coast newspapers or on radio/tv here. I like him, so I mentioned him. Sorry you didn’t like the “inclusion.” Kit )

Did you ever guess who the Bob Del retiring from CIT was?

Bob.Cragin@cit.com

http://www.leasingnews.org/archives/Januray%202003/1_29_03.htm#cit

(Oh, my God, it went right over my head. Bob Cragin!!! In re-reading it, one of the first places I discounted leases was in 1973 or 74 to Security National Bank

in Walnut Creek, California, to Bob Cragin. I learned the process from you,

and introduced it to the Wells Fargo Auto Division, who were not doing

equipment leasing at the time. You had gone to Harrah’s Leasing, where

you started the leasing company for Bill Harrah ( my late wife’s started in the booking department at Harrah’s, wound up doing the daily reported, personally

delivering the profit and loss statements to him each morning, putting “Bianca” on her tongue, as was required by all employees who would see him---later by all employees.) When Harrah died, Cragin came back to California, won an award from CIT for his Hewett-Packard/Agilent contract (http://two.leasingnews.org/archives/October/10-16-00.htm,) and primarily was working out of an office in his house in the last few years for CIT. . Bob’s wife is the long time operations manager at Dimension Funding, where our operations manager Trudi Griffin-Kovats also worked—small world. I still have the Walnut Ice bucket he gave me for Christmas way back when. Are we all getting that old? Even Hy Bren retired ( he used to send deals to Bob, and introduced me to Security Financial when he changed companies. He and his wife invited both

Bob and I to the nudist colony that he attended on weekends.

Congratulations, Bob, on your retirement. Now maybe you can tell me all the secrets you know about CIT. Does Al Gamper really write haiku poetry? Kit)

Welch Request Granted

By THE ASSOCIATED PRESS

BRIDGEPORT, Conn.(AP) — A Superior Court judge granted a temporary order today that will keep confidential the depositions of John F. Welch Jr., the former chairman and chief executive of General Electric, and his wife, Jane Beasley Welch, in their divorce case.

The judge, Arthur A. Hiller, issued the protective order at the request of Mr. Welch's lawyer, Daniel K. Webb, who said Mr. Welch would be asked for information about his business dealings, his health and entries in his personal diary. Mr. Welch's deposition, which is aimed at determining his wealth, is to resume next week.

Kiffin will be NFL's highest paid assistant

By Len Pasquarelli

ESPN.com

Defensive coordinator Monte Kiffin, the mastermind behind the dominating unit of the Tampa Bay Bucs, has agreed to a new contract that will make him the NFL's highest paid assistant coach and keep him with the Super Bowl champions, ESPN.com has learned.

The deal, negotiated by agent Jimmy Sexton, was reached Thursday afternoon, shortly before Kiffin was to have boarded a flight to the West Coast to interview for the San Francisco 49ers head coaching position. League sources agreed Kiffin would almost certainly have been the frontrunner for the Niners' job had he made the trip.

The contract is for three years and, with a value of $5.1 million, sets a new standard for assistant coaches. It includes a $1.1 million signing bonus and base salaries of $1.2 million (2003), $1.3 million (2004) and $1.5 million (2005). By comparison, Philadelphia defensive coordinator Jim Johnson last week signed a four-year contract worth $3.6 million, a deal believed to be the richest for a league assistant.

In terms of the annual average, $1.7 million, the new Kiffin contract nearly doubles that.

Between the signing bonus and base salary, Kiffin will earn more in 2003 than nearly one-third of the NFL's head coaches. The average for the deal is also more than the mean for several head coaches.

Early in the 2002 season, Kiffin had signed a two-year extension through 2004, a deal worth about $1 million annually. The contract agreed to on Thursday supercedes that one.

The agreement culminated 24 hours of hectic negotiations between Sexton and Bucs vice president Joel Glazer. The two spoke well into the night Wednesday and then resumed discussions Thursday.

On Wednesday night, Kiffin spoke by phone with 49ers general manager Terry Donahue, who hopes to have a successor to Steve Mariucci in place by no later than next week. It is not known how the withdrawal of Kiffin as a candidate will affect the 49ers' search for a head coach.

Bucs coach Jon Gruden, within minutes of his team's Super Bowl XXXVII victory Sunday night, announced the franchise would do everything it could to retain Kiffin. That was before San Francisco officials had even contacted the Bucs for permission to speak to their coordinator.

Kiffin, 62, for years has been one of the premier defensive minds in the NFL, but finally received his public due only in the last two years. Obviously, the Super Bowl victory, in which Tampa Bay thoroughly throttled an Oakland offense that was statistically ranked No. 1 in the league, further elevated his profile and his reputation.

The Bucs have ranked among the NFL's top six defenses in each of the past six seasons and were rated No. 1 in 2002.

Len Pasquarelli is a senior writer for ESPN.com.