Wednesday, May 28, 2008

Gladys Knight, singer, born Atlanta, Georgia, May 28, 1944
(The “Pips” comes from her manager, James 'Pips' Wood.)
Won on "Ted Mack & the Original Amateur Hour" (1948) at age 4.
She formed the Pips in 1952 when she was just 8 years old.
Record Reviews: http://www.warr.org/knight.html

Headlines---

Classified Ads---Documentation
    April— New Equipment Volume Up!!!
        Letters!!! We get eMail---
Top Stories --May 19--May 23
    Cartoon---Grandpa
        Classified Ads---Help Wanted
Leasing 102 by Mr. Terry Winders, CLP
Thirteen Questions You Should Ask
    Continued Housing Downturn Thrift Loss
        Auto Industry Feels Pain of Tight Credit
    US in Recession, Says Warren Buffett
Consumer Mood Hits 16-Year Low
    BK's Up, despite new law
        Linens to close 50-100 additional stores?
    Credit Crunch in UK---the Alta Group
Housing Prices Fall 14.4%
    Housing skid leads to exodus of builders
        News Briefs---
You May have Missed---
    California Nuts Brief---
        "Gimme that Wine"
    Calendar Events
Snapple Real Facts
    Today's Top Event in History
        This Day in American History
Baseball Poem
    SuDoku
        Daily Puzzle
            GasBuddy
Weather, USA or specific area
News on Line---Internet Newspapers
Helena, Montana

######## surrounding the article denotes it is a “press release”

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Classified Ads---Documentation

For a full listing of all “job wanted” ads, please go to:
http://www.leasingnews.org/Classified/Jwanted/Jwanted.htm

Leasing Recruiters:
http://www.leasingnews.org/Recruits/index.htm

To place a free “job wanted” ad here, please go to:
http://www.leasingnews.org/Classified/Jwanted/Jwanted-post.htm

[headlines]

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April— New Equipment Volume Up!!!

by Christopher Menkin

MLFI-25 New Business Volume Chart
(in billions)

(chart: ELFAonline.org)

Compared to April, 2007 new equipment volume of $6.3 billion, 2008 is $7.2 billion, reports the Equipment Leasing and Finance press release running in many media print and on line reports.

In summing this April, 2008, report up, ELFA President Kenneth E. Bentsen, Jr., is optimistic.

Hon. Kenneth Bentsen, Jr.

“The April data shows that businesses invested in capital goods at a faster pace,” he concluded. “This is an improvement in financing activity for capital goods as compared to the first quarter and may indicate that businesses are predicting positive growth in economic demand.”

Utilizing ELFA’s own statistics, new business volume increased from March to April, 2008,
from $7 billion to $7.2 billion.

(Chart: Leasing News view in quarters)

Shown in quarters, the trend is more dramatic, going from an average of $6.1 the first quarter to $7.2 billion, giving more credence to the Bentsen’s conclusion.

The numbers, however, do not seem to jive with financial numbers reported by SEC filings of publically owned companies or subsidiaries of banks.

As pronounced, the employment numbers do not match stories in the news about CIT, Citibank, GE Capital, to name just a few, who have been letting employees go, particularly not hiring those
who move on or retire.

Perhaps the best example regarding the contrast is in comparison with the ZRG employment index.

The employment figures from the ELFA MFLI-25 survey are January 12,100 and the remaining months each 11,800, as if there were no changes, or perhaps as many people let go as were also hired.

The MFLI-25 press release declares:
“Total headcount remains virtually flat for the last three months.”

Contrast the declaration with the ZRG employment index:

ZRG Employment Index

Perhaps the problems come from the types of company chosen in the survey, as well as the changing number of how many were used to come up with the final statistics. First, it was originally 25 reporting companies, hence the name MLFI-25, then it increased to 26 reporting companies, which should change the numbers. When LaSalle left, it then became 25. And the latest includes Fifth Third Bank and the MLFI-25 is 26 again. *

While ELFA said adjustments were made, they were not to previous numbers, as they are still being utilized in today’s MFLFI-25 report and charts
( Sept., 2006 to present:
http://www.leasingnews.org/Conscious-Top%20Stories/ELFA-Survey.htm )
In addition, there were admitted problems with companies counting employees overseas, as the chart was originally just to report business in the United States. (“The report is also a barometer of the trends in U.S. capital equipment investment. “ ELFA press release.)

The comments also in the ELFA press release regarding April, 2008, indicate a global viewpoint may be included in the so-called report on US business:

“At De Lage Landen we experienced a very good month volume-wise in April and we are seeing strong demand globally,” said Denis McCafferty, CFO of Global Operations, De Lage Landen. “This is particularly pleasing against a backdrop of the current financial market challenges. April results suggest that companies view the global economy as robust and that a return to positive economic growth is a “when and not if”—and perhaps sooner that some might think,” McCafferty said.

“While we are very pleased with what we see, we remain focused on credit,” said McCafferty. “Financing based on solid credit is one of the keys to success for both lessors and lessees alike,” McCafferty said. De Lage Landen is a participant in ELFA’s MLFI-25.

Generally tighter credit policies do not generate increased sales.
It is the opposite, looser credit that produces more business on the books.
The ELFA MLFI-25 indicates there were less approvals than previous months:

On the other hand, with banks tightening up, perhaps the finance and leasing industry is seeing more applications, therefore even if raising credit standard and due diligence, meaning approving less, business is up because there is more activity.

The next two quarters may indicate which observation was the correct one. My opinion is more tough times are ahead. Those who plan for it, make changes, come up with new programs and approaches, will be the winners.

* ELFA MLFI-25 Participants

1. ADP Credit Corporation
2. Bank of America
3. Bank of the West
4. Canon Financial Services
5. Caterpillar Financial Services Corporation
6. CIT
7. Citicapital
8. De Lage Landen Financial Services
9. First American Equipment Finance
10. GreatAmerica
11. Hitachi Credit America
12. HP Financial Services
13. Irwin Financial
14. John Deere Credit Corporation
15. Key Equipment Finance
16. Marlin Leasing Corporation
17. National City Commercial Corp.
18. RBS Asset Finance
19. Regions Equipment Finance
20. Siemens Financial Services
21. US Bancorp
22. US Express Leasing
23. Verizon Capital Corp
24. Volvo Financial Services
25. Wells Fargo Equipment Finance

*ELFA MLFI-(26) Participants

1. ADP Credit Corporation
2. Bank of America
3. Bank of the West
4. Canon Financial Services
5. Caterpillar Financial Services Corporation
6. CIT
7. Citicapital
8. De Lage Landen Financial Services
9. First American Equipment Finance
10. GreatAmerica
11. Hitachi Credit America
12. HP Financial Services
13. Irwin Financial
14. John Deere Credit Corporation
15. Key Equipment Finance
16. LaSalle National Leasing Corporation
17. Marlin Leasing Corporation
18. National City Commercial Corp.
19. RBS Asset Finance
20. Regions Equipment Finance
21. Siemens Financial Services
22. US Bancorp
23. US Express Leasing
24. Verizon Capital Corp
25. Volvo Financial Services
26. Wells Fargo Equipment Finance

April, 2008 MLFI-25 report (26 participants-LaSalle replaced):

1. ADP Credit Corporation
2. Bank of America
3. Bank of the West
4. Canon Financial Services
5. Caterpillar Financial Services Corporation
6. CIT
7. Citicapital
8. De Lage Landen Financial Services
9. Fifth Third Bank
10. First American Equipment Finance
11. GreatAmerica
12. Hitachi Credit America
13. HP Financial Services
14. Irwin Financial
15. John Deere Credit Corporation
16. Key Equipment Finance
17. Marlin Leasing Corporation
18. National City Commercial Corp.
19. RBS Asset Finance
20. Regions Equipment Finance
21. Siemens Financial Services
22. US Bancorp
23. US Express Leasing
24. Verizon Capital Corp
25. Volvo Financial Services
26. Wells Fargo Equipment Finance

ZRG March April Index story
http://www.leasingnews.org/archives/May%202008/05-21-08.htm#zrg

About the ZRG Index
http://www.leasingnews.org/archives/May%202008/05-23-08.htm#zrg

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Letters!!! We get eMail---

Christopher “Kit” Menkin, editor

“Thanks for publishing the passing of Paul Raynault.

“Because of your notification, I have had many phone calls and emails from people in the industry.

“I did part of the eulogy. There were over 300 people at the service.”

Regards,

Tom Martin
CFI Financial Services, Inc.
One University Plaza
Hackensack, NJ 07601
201-489-2600
201-489-2680 fax
www.cfifinancial.com

Paul Raynault of CFI Financial passes away
http://www.leasingnews.org/archives/May%202008/05-21-08.htm#pass

More on Passing of Paul Raynault
http://www.leasingnews.org/archives/May%202008/05-23-08.htm#mourn

-----

“Kit,

“Just a quick note to provide you with background on the selection of the name Tygris. Aquiline is “eagle-like” in Latin, and we followed suit with our financial sponsor (Aquiline Capital) an elected to go with a Latin name.

Tiger in Latin is tigris. Other names for tiger include tigre and tygris. Tigers are remarkable for their strength and speed…both descriptors that set the tone for the new commercial finance and leasing company we recently launched.”

Best,

Rick

(The editor thought the name came from the Tygris River, and asked if any reader knew the origination. The river, by the way, is named about the tiger as it had “sharp teeth” and fast when used in the ancient world of transportation. Thank you, Rick, for providing the answer. editor)

Look Out CIT, here comes Rick Wolfert!
http://www.leasingnews.org/archives/May%202008/05-21-08.htm#tygris

----

Jim Lehrer, journalist, anchor, ex-US Marine
(“Once a Marine, always a Marine!”)
born, Wichita, Kansas, May 19, 1934

“Kit, there are no ex-marines. As you noted, ‘once a marine always a marine.’ Marines are active or retired but never ex.”

David Rabinowitz
drabinovitz@gmail.com

“Kit...........good morning. I really enjoy your newsletter, but one quick comment. There is no such thing as an ex-Marine. When refereeing to someone like John Lehrer, the correct terminology is former Marine. That's where the ‘once a Marine, always a Marine’ really comes into play.

“Thanks for your work, please keep it up.”

Brad Schwoebel
USMC 1971 - 1979
brad@highlandpublic.com

(One of the photo’s I found identified him also as an “ex-marine.”
Perhaps it should have said “former” marine, but I thought I would straighten it out as anyone who has served in the service knows the adage, “One a marine, always a marine.” It is a rare compliment
in most circles as both readers pointed out. editor)

-----

“Hi Kit,

“It you get one of these, please email ahead of time so that we can get off the road.”

Larry & Marian

----

“They should have put the display instruments closer to the center since everyone is not right handed. You could drive from either side depending on your mood.”

Paul Witte
paul@firstbankrichmond.com

(Leasing News asked if we could quote him.)

“That’s fine by me. Who knows, Mercedes may see the quote and want me on their next design team. : ) “

Paul Witte
paul@firstbankrichmond.com

(They should take Mr. Witte’s suggestion. By the way, the SCL6000 was first displayed at the Paris Motor Show in 1996 during the reign of DaimlerChrysler. editor)

The full link with larger photographs:
http://www.leasingnews.org/Pages/MB_SCL6000.htm

---

“One of your Canadian readership here - country
notwithstanding I always find a lot of the stuff very relevant .
Caught with interest your article/thoughts on ABCD credits .

“In general , would agree, however I think A credits do not necessarily
have to be 'larger public co's , those taking discounts, ..' , etc .
My own definition for an A is a firm , size notwithstanding, that has
growing revenues, growing profits and growing cash flows . I can
always get that firm A rates .

“I do strongly agree that the majority of lease credits out there tend
to always fall into ' B' status , while those C/D credits require
significant time and structuring for those of us who persevere.”

Regards

Stan

Stan Prokop
President
7 PARK AVENUE FINANCIAL
(division of 6169899 Canada Inc)
South Sheridan Executive Centre
2910 South Sheridan Way
Suite # 301
Oakville, Ont
L6J 7J8
TEL = 416 319 5769
FAX = 905 829 2653

--

“Within the broker community 90% of us would be dealing in ‘C’ credits if the Leasing News definitions hold true. Additionally, I'm sure many of the ‘well known’ funding sources would argue that they are ‘C’ credit lenders.

Bob Bell, CLP
Independent Leasing Associates
1455 Lockridge Drive
Suite 100
Cumming, GA 30041
800-685-7571
FAX: 770-844-0242

(I would agree that the majority of the leases brokers and funders handle are usually "C" credits; often C+. B- and perhaps a few "B’s."

(In the small to middle-size ticket range, the only time an "A" is most likely seen would be when a hotel manager or department manager signs the contract rather than the officer of the Fortune 100. I have done personally with Intel, HP, Bank of America, to name a few, many times.

(Dun and Bradstreet as well as other reporting agencies rate "A" credits as having a certain net worth, number of employees, and paying within 30 days, also may affect the credit.

(First, there is nothing wrong with a "C" credit, which is generally less than 50 employees, more often less than 25 employees, and can even be a physician, or dentists ((I have signed over 1,000 or more dentist leases in my career, maybe many more. The last two were in practice for over 20 years and their most recent tax returns with a net of $450,000 a year. Most, if not all, in this category do not report their financials or other information to D&B.))

(My old mentor Mac Pollock told me many years ago if the client pays out as agreed, as far as he is concerned, the client is an “A.” editor)

A-B-C-D Credits
http://www.leasingnews.org/archives/May%202008/05-16-08.htm#abcd

---

“I did laugh because when Verizon Fios blew in town, I dropped Comcast in a heartbeat. Mainly, however, because I could never get them to fix issues that involved downloading messages into outlook since they only ‘supported’ outlook express. What tickles me most is that Comcast offered to ‘upgrade’ my speed via a business account to the same address, same modem, and still didn’t support outlook – only cost twice as much.”

Lisette Johnson
Cash Flow Crisis Prevention
Integra Leasing & Commercial Finance
804.622.0497 804.622.0498 fax 888.622.0497 toll free
LJohnson@IntegraLeasing.com
www.IntegraLeasing.com
Keeping Your Cash Available
We adhere to NAELB code of ethics

My adventure with Comcast Blast
http://www.leasingnews.org/archives/May%202008/05-07-08.htm#blast

Six Leasing Schools/Franchises

“I just wanted to say that I went to Wildwood (a former leasing school that closed upon the passing of its founder Bob Baker, CLP. editor) and I am a ‘graduate’ who is still in the business.

“I don't take offense to any of the comments made, everyone is entitled to their opinion, but (Kit Menkin’s opinion on finding only)… one person from Wildwood still being in the business does not make you an expert on the success or failures of that particular program…

“I will say that I have been in my own businesses for over twenty years and that the people who have a better chance to succeed in this industry, and have gone the training school route, will most likely have had their own business or at least have been in sales.

“ I certainly agree that people who first worked in the industry as employees before going out on their own have an advantage, but I've met or spoken to many successful brokers who went in to the industry not taking that route. And I could give a list of people who either swear by or swear about the particular training program they went to. In the end you have to do the work, have some sales, business and organizational ability, continue to learn and enjoy the business.”

Thank you.
Dan Calabrese

The New York State Office of CCLG
Sunrise Funding Solutions
3 McCann Drive
LaGrangeville, NY 12540
(845) 223-7924 (Main Number)
(800) 689-1217 (Toll Free)
(845) 227-6425 (Fax)
Email: dan@sfsnys.com
Web Site: www.sfsnys.com

(Since writing the article, you are only the second to respond, which again shows either many who graduated from any school did not stay long in the leasing business, or perhaps they don't read Leasing News.

(Seriously, my challenge to hear from ex-graduates and hearing from only two since May 12th, confirms my research from three leasing associations as well as two software companies about how many joined or used their program, but are not around today
((or lasted more than a year or so.))

(I would say after at least 150 graduates a year for the various schools, who have also come and gone, the overwhelming majority are no longer in the equipment leasing business.
Let me add that 150 is a small guess estimate from them, as when I was chairman of the United Association of Equipment Leasing membership for 3 years, Bob Baker would win bringing in over 25 new members from his program ( and not all joined, he told me) that there should be more "graduates" in the business. Even if only 100 graduates per year, to receive only two responses confirms what the associations and software service companies have told me. Bob Baker, by the way, was one of the founding Leasing News Advisors and a good friend, too. He was an excellent teacher.

(The point being it is difficult to become a professional independent leasing broker in six months, especially in a declining, very competitive marketplace.

(I appreciate your comments and opinion. Editor)

Six Leasing Schools/Franchises
http://www.leasingnews.org/archives/May%202008/05-12-08.htm#school

----

From Brian Montgomery, past president, National Associations of Equipment Leasing Brokers (NAELB:)

--

“Next to the school of hard knocks, you are the best source of education. I read you every day!

“We are a 3 man office, with 3 outside salespeople. Our main focus is commercial trucks and autos, with about a 2 year concentrated growth on doing more non-titled assets. In short, I am probably like a shop many of the seasoned veterans started at in the 60’s-70’s- and early 80’s. Your newsletter helps me find out the facts, and that is what we need at my office! We need the facts so we can get: the lender, the vendor, the client, the manufacturer, and ourselves on profitable deals. Finding profit for all, is why my shop is allowed to exists per the basic laws of U.S. economics!”

Thanks

Scott Pearson
Robert Pearson Motor Sports
26944 Camino De Estrella
Unit D
Capristrano Beach, CA 92624
949-488-0338 (office)
949-488-0357 (fax)

949-422-0472 (cell)
www.RobertPearsonMotorsports.com

--

“This actually came from a girl at Puget Sound who loves baseball. I thought you would like it.”

Baseball begins in the spring, the season of new life.
Football begins in the fall, when everything's dying.

In football you wear a helmet.
In baseball you wear a cap.

Football is concerned with downs - what down is it?
Baseball is concerned with ups - who's up?

In football you receive a penalty.
In baseball you make an error.

In football the specialist comes in to kick.
In baseball the specialist comes in to relieve somebody.

Football has hitting, clipping, spearing, piling on, personal fouls, late hitting, unnecessary roughness.
Baseball has the sacrifice.

--sent by:

Bob Stewart
ACG Equipment Finance
9436 Hamilton Dr
Mentor, OH 44060
800-830-0084 ext 208
800-830-9855 fax
440-579-0408 Direct

[headlines]

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Top Stories --May 19--May 23

Here are the top ten stories most “opened” by readers last week:

(1) Marlin Confirms “Massive Layoffs”
http://www.leasingnews.org/archives/May%202008/05-19-08.htm#mrlin

(2) CIT to cut 1,000 jobs
http://www.leasingnews.org/archives/May%202008/05-21-08.htm#cit

(3) Paul Raynault of CFI Financial passes away
http://www.leasingnews.org/archives/May%202008/05-21-08.htm#pass

(4) Look Out CIT, here comes Rick Wolfert!
http://www.leasingnews.org/archives/May%202008/05-21-08.htm#tygris

(5) April: Major Drop in Leasing Employment
http://www.leasingnews.org/archives/May%202008/05-21-08.htm#zrg

(6) Cartoon---Marlin HR Department
http://www.leasingnews.org/archives/May%202008/05-19-08.htm#toon

(7) More on Passing of Paul Raynault
http://www.leasingnews.org/archives/May%202008/05-23-08.htm#mourn

(8) How David Cook won 'American Idol'
http://ap.google.com/article/ALeqM5iwXD4BoO2HF6nbttn2FU7Cw_ZtowD90QSJIO0

(9) Leasing 102 by Mr. Terry Winders, CLP
“Don’t count Operating Leases Out”
http://www.leasingnews.org/archives/May%202008/05-19-08.htm#102

(10) Bruce Kropschot, Jim Billings, Hugh Swandel
All join the Alta Group
http://www.leasingnews.org/archives/May%202008/05-21-08.htm#alta

[headlines]

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[headlines]

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Leasing Industry Help Wanted

Collector

Collector Lake Success, NY --Referral Fee Available--- Full Time, entry or jr. level collector, auto and/or equip. collection exp. preferred. ekaye@advantagefunding.us or call Ed Kaye or Eric Coolbaugh: 866.392.1300 516-280-1786 Direct Dial 718-392-5427 FAX resume Lake Success is the western most village in Nassau County, conveniently located by car from the Long Island Expressway and Grand Central Parkway.

www.advantagefund.com

Leasing Sales Representative

“A Top Producers Dream” Outstanding Back Office Support High Commissions – Up To 80% Elite Training Program Access to many Major Funding Sources with the ability to obtain approvals not available elsewhere Click Here if you want to achieve more!

www.matrixbusinesscapital.com

[headlines]

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Leasing 102

by Mr. Terry Winders, CLP

Thirteen Questions You Should Ask

Traditional balance-sheet lending works well for commercial loans, but it is not adequate for equipment leasing, where characteristics of the equipment affect the creditworthiness of the transaction. Too many bank leasing departments decide to make a lease without considering important facts about the equipment itself. Asking the proper questions about the equipment may help you strengthen the credit or make you question it.

Here are 13 questions you should ask about the equipment underlying every lease.

Can You Describe the Equipment Completely?

A complete equipment description sounds simple; however, an adequate description rarely makes it to the lease agreement. Vendors have idiosyncratic identification systems that may be unclear to you. Even after you have the invoice in hand, you usually must telephone the vendor to understand the equipment, how it is identified, and what is or is not an attachment or special part. Many lessors have tried to retrieve their equipment from bankruptcy trustees, landlords, or other creditors, only to find that a poor description makes it difficult or impossible to identify and claim the leased equipment.

It is important to include a plain English description of the equipment—as well as the more technical information—on a Uniform Commercial Code (UCC) filing. Otherwise, inexperienced purchasers may think your equipment is lien free and buy it from the lessee. The UCC filings would give you the right to retrieve your equipment, but once it has been sold out of trust, it is almost impossible to discover who purchased it and where it is. Even if you can learn who purchased the equipment, you probably will face a legal fight to establish your right to the equipment.

Proper description also allows you to use guidebooks to distinguish the particular equipment being leased form similar equipment and to verify the proper purchase price. Many times vendors give sloppy descriptions to conceal price increases to handle payoffs on poor trade-ins, unpaid repair bills, or even kickbacks to your customer. Lack of proper or complete equipment descriptions indicates that something is amiss in your lease request.

Who is the Manufacturer and How Strong Is the Distributor or Vendor?

Manufacturers and distributors of new technology sell equipment with lots of sizzle, but they themselves tend to be

low on experience. Leasing equipment based on a new technology is a major risk if the manufacturer or distributor does not have the staying power to remain in business over the life of the lease. The manufacturer must be financially secure to supply spare parts and to live up to warranties and guarantees. A strong lessee is little comfort when equipment fails to perform and the distributor is out of business. Lessees hate to pay for equipment that doesn’t work and will use every legal method available to stop paying rent.

Even for proven equipment, a distributor or vendor in weak financial condition could cause hardship and expense for your customer. This could have a material effect on the creditworthiness of the transaction.

In general, distributors that are in poor financial condition make promises that are difficult to keep. Discuss with your lessee all warranties and guarantees, both verbal and written, offered by the vendor. View unusual promises with skepticism; avoid distributors who make such promises.

How Do Total Costs Break Down?

Vendors usually are very reluctant to break down the total cost of the equipment. By investigating the proper description and identifying each individual piece of equipment or attachment, you can learn what proportion of the total cost is hard costs, or costs for the equipment itself. The remaining soft costs are generally irretrievable. They include installation, transportation, site preparation, permits, taxes, training, after-the-sale support, technical assistance, extended service, extended warranty, insurance, operating software, licensed software, and so on. The mere existence of soft costs should not cause alarm about a potential lease. However, it is important to identify soft costs in order to assess the value of the leased equipment.

Occasionally, improper sales tax is assessed because soft costs such as transportation, site preparation, and technical assistance are included in the equipment cost. If these items are separated out, the extra sales tax may be avoided. Also, proper identification of all costs is necessary to evaluate the term and structure of your lease.

What is the Useful Life of the Equipment?

Unfortunately, many bankers and lessees are accustomed to arranging leasing terms that match loan terms. Just because the customer may have used five-year financing before does not necessarily mean that five years is the correct term for the lease. The term should match the period that the lessee plans to use the equipment. In many cases, the useful life of the asset depends on use. For example, a forklift may be used either in a foundry to handle forms of molten metal or in a candy factory to load boxes of marshmallows on the back of a delivery van. The useful life of this equipment varies substantially because of these two uses. The collateral value of equipment under lease is therefore very dependent upon its use. It is necessary to determine how your lessee is going to use the equipment and then match the term of the lease to the useful economic life of the equipment.

Leases with terms that do not match the use of the equipment generally incur larger losses in default because customers had sought longer terms to improve cash flow. The lessee who seeks a term of lease that is longer than the useful life of the equipment ultimately presents a risk to the lessor.

Where Will the Equipment Be Located?
Will It Be Moved?

The location of equipment is important for many reasons, especially for tax considerations. Your lessee is responsible for paying all taxes assessed on the equipment (except your income tax). Nevertheless, if the lessee fails to pay, you will be responsible for the unpaid tax because you are the registered owner of the equipment. Lessees often move equipment from one tax authority to another (usually from one state to another). If the equipment is on site when the local tax is assessed, taxes may be due and neither you nor the customer may know about them.

A change in location sometimes signals a change in use. Many companies start out with an assumption about how the equipment will be used, but changes in business may cause them to make a change. This is common with companies that have multiple subsidiaries engaged in different types of business. It also is not uncommon for your equipment to be subleased for idle periods. Explain to your lessee that any change in location or use must be reported and that this change may result in an adjustment in rent or term. It may be wise to require in the lease documents that any change in location must be reported or be held in default.

Who Will Operate the Equipment?

Asking who will operate the equipment gives you the opportunity to inform your customer about unauthorized use. The equipment should be used only by company personnel on company business. As the owner of the equipment, you must be sure that no one outside the company can operate the equipment and that no employee can use if for personal use. Unauthorized use generally invalidates insurance and sometimes invalidates the manufacturer’s warranties and guarantees.

On occasion, some types of equipment may require special technicians or operators. You should investigate how this affects the value of your equipment. Often, equipment values can suffer as much from a shortage of experienced personnel as from the lack of a secondary market.

When Will the Equipment Be Delivered?

The delivery date determines when your equipment lease begins; often this can be up to 90 days in the future. Therefore, you may quote a lease rate as a function of prime or some other benchmark to maintain your spread if interest rates change.

This covers your rate risk, but delivery dates also raise other issues to discuss with the customer. For example, an immediate delivery generally means that the equipment being replaced has failed and the need for a replacement is critical. This should make you ask whether the replaced equipment was used beyond its useful life and question whether or not the lease term is appropriate. The equipment may have failed during a period of heavy use; therefore, a new lease in full years would end at the wrong time of year in the middle of the heaviest use. Try to decide the best time for a lease to end, so your customer does not have to make important end-of-the-lease decisions at inopportune times.

Is This Replacement or Additional Equipment?

The question of whether the equipment is replacement or additional leads to the cash flow to pay rent. If the equipment is additional, it may depend on revenues form increased production to pay your rent. These revenues may be in the future after the product has gone to market. Therefore, rent may need to be smaller at the beginning of the lease to compensate for lack of funds.

If the equipment is being replaced, information about the useful life of the old equipment would be valuable for structuring the lease.

What Will Be the Costs of Removing the Equipment?

The value of equipment that requires special wiring, major site preparation, or unusual installation procedures can be eroded seriously by the cost of removing it. High removal costs usually eliminate residual value of the equipment and give rise to serious tax questions. If removal costs cancel out the value of the equipment, it can be said that the equipment has a single use—good only to the user. Therefore, the IRS would consider it to be purchase or financed—not leased for tax purposes. To qualify for a lease, the equipment must have multiple purposes, and it must be possible to remove and reassemble it at moderate expense.

Will the Equipment Need Major Maintenance during the Term of the Lease?

If the equipment will require major expenditures for overhaul or repair, the customer may not be able to meet rental payments and pay for the overhaul simultaneously. Compare the number of hours the manufacturer suggests the equipment be used before an overhaul to the number of hours your customer plans to use the equipment. Then plan your rent to compensate for major repairs or overhauls.

If a major overhaul is necessary when your lease ends, keep this in mind when evaluating your residual risk. Also, knowledge of the timing of major repairs should affect your collection effort if your customer begins paying slowly. Lease terms that do not take repairs into consideration generally increase risk and guarantee losses in default.

What Are the Vendor’s Payment Terms?

Interest begins accruing on loans when the bank disburses the funds to the customer. In an equipment lease, there is no connection between when the customer begins paying rent and when the bank pays for the equipment. You should review each vendor’s invoice to ensure that you comply with the vendor’s payment terms. Many vendors do not require payment until 30 days after the customer accepts the equipment. You can enhance the yield on an equipment lease by 35 basis points or more for each month that you can delay payment to the vendor. Many vendors are on manufacturer programs that allow them to pay for equipment up to six months after the sale. If your vendor is a customer of the bank or you know the vendor, find out exactly when the equipment must be paid for. If possible, take advantage of delaying payment to the vendor to enhance your yield.

Is Insurance Protection Adequate?
Is the Insurer Reliable?

In today’s volatile insurance market, rates and coverage can vary substantially. Carefully evaluate both the insurance coverage and the insurance carrier. Large deductibles and exceptions combined with weak insurers have left many leasing companies with damaged equipment and no recourse to the insurance company. Do not place insurance policies in the customer’s file until the proper personnel read and qualify them. Explain insurance requirements before the customer takes delivery of the equipment.

Will the Customer Modify the Equipment to Perform a Special Task?

Many customers take good, solid equipment and alter it for a special purpose. On the surface, the equipment appears valuable. However, when the equipment is altered its purchase price is inflated to make it handle a special task. In default, altered equipment must be returned to its base state. The cost of reconfiguring the equipment to make it marketable and the increased purchase price may eliminate any equity or even create a serious loss. Exercise special care when leasing equipment that will be used for a limited or unusual task.

Summary

For an equipment lease, evaluating the equipment is as important as evaluating the customer’s creditworthiness. By knowing as much as you can about the equipment, you can structure the lease to take into consideration facts that will identify the true risk of this particular credit.

In this column, I have addressed questions that apply to all types of equipment. Naturally, there will be other questions that apply only to special kinds of equipment within specific industries. For a computer lease, for example, you might want to ask whether it has been around for a while and is therefore subject to change. Or you might want to know whether or not the computer could be upgraded or expanded.

Knowing the right questions not only will protect your bank from risk but also will help you to structure the lease to best serve the customer’s needs. Taking care of the customer’s true needs always makes a better customer than reacting to the customer’s assumptions.

Mr. Terry Winders, CLP, has been a teacher, consultant, expert witness for the leasing industry for thirty years and can be reached at leaseconsulting@msn.com or 502-327-8666. He invites your questions and queries.

Previous #102 Columns:
http://www.leasingnews.org/Conscious-Top%20Stories/Leasing_102/Index.htm

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### Press Release ###########################

Continued Housing Downturn Drives First Quarter Thrift Industry Loss

Washington, D.C. — The Office of Thrift Supervision (OTS) reported yesterday that the nation’s thrift industry posted a $617 million loss during the first quarter of 2008 after setting aside record provisions for loan losses expected from the continued downturn in the housing market.

The loss was an improvement from a net loss of $8.75 billion in the fourth quarter of 2007, but down from net income of $3.61 billion in the first quarter one year ago.

Thrifts have set aside a total of $16.6 billion in loan loss provisions over the most recent three quarters. First quarter loan loss provisions were an all-time industry high of $7.6 billion, up from $5.5 billion in the previous quarter and $3.5 billion in the third quarter 2007. One year ago, provisions were $1.2 billion.

“I have been urging managers of OTS-regulated thrift institutions to be aggressive in setting aside provisions for expected loan losses,” said OTS Director John Reich. “This forceful response to the housing market crisis continues to depress industry earnings, but it also strengthens institutions to withstand future challenges.”

Capital is another source of strength for the thrift industry. The equity capital ratio remained solid at 9.05 percent in the first quarter, down from 9.26 percent in the previous quarter and from 10.70 percent in the first quarter one year ago.

However, pressures from the continued housing market distress were evident not only from losses in earnings and profitability in the first quarter, but also an increase in troubled assets.

Other highlights include:

Profitability, as measured by return on average assets (ROA), was a negative 0.16 percent in the first quarter, an improvement from a negative 2.31 percent in the fourth quarter of 2007, but down from 0.97 percent in the comparable quarter a year ago. The median ROA increased to 0.43 percent in the first quarter from 0.39 percent in the previous quarter, but was down from 0.51 percent in the first quarter a year ago.

Troubled assets (noncurrent loans and repossessed assets) were 2.06 percent of assets during the first quarter, up from 1.66 percent in the previous quarter and from 0.80 percent one year ago.

OTS supervised 831 thrifts with industry assets of $1.52 trillion at the end of the first quarter. OTS also supervised 479 holding company enterprises with approximately $8.4 trillion in U.S. domiciled consolidated assets.

More details, as well as charts and selected indicators, are available on the OTS website at www.ots.treas.gov

Thrift Industry Summary Report-full (5 pages)
http://leasingnews.org/PDF/Thrift_Industry_Highlights.pdf

Thrift Industry Charts (14 pages)
http://leasingnews.org/PDF/Thrift_Industry_Charts3.pdf
--in slide presentation format:
http://leasingnews.org/PDF/Thrift_Industry_Charts.pdf

Thrift Industry Selected Indicators (55 pages, 2.52mb download
http://leasingnews.org/PDF/Thrift_Industry_Selected_highlights2.pdf

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News Briefs----

Auto Industry Feels the Pain of Tight Credit
http://www.nytimes.com/2008/05/27/business/27auto.html?ref=business

Measure of Consumer Mood Hits 16-Year Low
http://www.nytimes.com/2008/05/28/business/28econ.html?ref=business

US in Recession, Says Warren Buffett
http://www.time.com/time/nation/article/0,8599,1809396,00.html?xid=rss-topstories

Despite Tighter Rules, More Strapped Americans Seek Debt Relief
http://www.washingtonpost.com/wp-dyn/content/article/2008/05/27/AR2008052703330.html

Linens Mulls closing 50-100 additional stores
http://www.nypost.com/seven/05272008/business/linens_mulls_closing_50_100_
additional_s_112708.htm

Credit Crunch in UK---the Alta Group
http://www.thealtagroup.com/doc_files/486_LLmarch%2008.pdf

Housing Prices Fall 14.4% in Sign of Continuing Slump
http://www.nytimes.com/2008/05/28/business/28home.html?_r=1&hp&oref=slogin

Housing skid leads to exodus of builders
http://www.signonsandiego.com/news/business/20080527-9999-1n27builders.html

Horizon Air cuts flights in Northwest as fuel costs soar
http://seattletimes.nwsource.com/html/businesstechnology/2004441321_webhorizon27.html

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You May have Missed---

Coyote attacks in Los Gatos, Monte Sereno, Saratoga
(We have seen them not only by the fence around our house, but on the street during the day.
No joke.)
http://abclocal.go.com/kgo/story?section=news/local&id=6168907

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California Nuts Briefs---

Other Troubled Cities Watch Vallejo, Calif., Chap. 9 Filing
http://www.cfo.com/article.cfm/11441393/c_11442040?f=home_todayinfinance

Harwood lumber seeks bankruptcy protection
http://www.pressdemocrat.com/article/20080527/BUSINESS/513469770/1036/
BUSINESS01&title=Harwood_lumber_seeks_bankruptcy_protection

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“Gimme that Wine”

Wine: Good to the last drop
http://www.contracostatimes.com/ci_9393456?nclick_check=1

Louisiana vineyard struggles for recognition
http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2008/05/27/national/
a012245D25.DTL&hw=wine&sn=001&sc=1000

UC Davis students uncork an award-winning wine cap
http://www.sacbee.com/103/story/960679.html

Online bidding begins for Auction Napa Valley
http://www.napavalleyregister.com/articles/2008/05/23/news/local/
doc483704c7be0e1004218505.txt

Wine Prices by vintage
http://www.winezap.com
http://www.wine-searcher.com/
US/International Wine Events
http://www.localwineevents.com/
Winery Atlas
http://www.carterhouse.com/atlas
Leasing News Wine & Spirits Page
http://two.leasingnews.org/Recommendations/wnensprts.htm
The London International Vintners Exchange (Liv-ex) is an electronic exchange for fine wine.
http://www.liv-ex.com/

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Calendar Events This Day

Amnesty International Day
http://holidayinsights.com/moreholidays/May/amnestyintlday.htm

Azerbaijan: Day of the Republic
Public holiday. Commemorates the declaration of the Azerbainjan Democratic Republic in 1918.

Ethiopa:
National Holiday. Commemorates the downfall of the Dergue, the military government that ruled Ethiopia from 1974 to 1991.

National Brisket Day

National Hamburger Day
http://www.dailycelebrations.com/052800.htm
http://homeschooling.about.com/od/unitssubjgeog/ss/louislunch.htm

Saint Bernard of Montjoux: Feast Day
Patron saint of mountain climbers, founder of Alpine hospices of the Great and Little St. Bernard, died at age 85, probably on May 28, 1082.

Whale Day
http://homeschooling.about.com/od/unitssubjsci/p/sealesson14.htm

Saint feast Days

• St. Bernard of Montjoux
• St. Mariana
• St. William of Gellone
• Bl. Thomas Ford
• St. Senator
• St. Caraunus
• St. Emilius
• St. Heliconis
• Bl. John Shert
• St. Justus of Urgel
• Bl. Margaret Pole
• Bl. Robert Johnson
• St. Paul Hanh
• St. Podius
• St. Accidia

http://www.catholic.org/saints/f_day/may.php

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The Apollo 11 plaque left on the Moon says, "Here men from the planet Earth first set foot upon the Moon July 1969, A.D. / WE CAME IN PEACE FOR ALL MANKIND."

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Today's Top Event in History

1937-The Golden Gate Bridge opens to cars At noon, President Franklin Roosevelt presses a telegraph key in the White House, and the bridge is opened to vehicular traffic. The previous day, the bridge was inaugurated and opened to pedestrian traffic.
Until the Verrazano Narrows Bridge was completed in 1964, the Golden Gate's structural steel suspension span was the longest in the world. (Today, the Akashi-Kaikyo Bridge in Japan boasts the longest span at over 2000 meters.). The Golden Gate Bridge was designed by Clifford Paine, who submitted the final blueprints for approval in 1930. It then took three years for the builders to attain the approval of the military, the city financiers, and the voting public. Construction of the bridge began on January 5, 1933.
The Golden Gate Bridge cost the community nearly $35 million during its five-year construction. Its name is derived from the body of water over which it spans, Golden Strait. The "gold" comes from the strait's location at the mouth of the North Bay, beyond which lies the gold of California. Other have mentioned that the Golden Gate Bridge is the Gateway to the Land of the Setting Sun, but they didn't mention this until nearly thirty years after the bridge was originally erected.

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This Day in American History

    1539 - Hernando de Soto sailed from Cuba to Florida with 13 pigs to help sustain his 700 men on his gold-hunting expedition.
He trades with Indians, bringing pigs to America.
    1732-protecting the environment and particularly the fishing industry is not new. New York City enacted a law for “preserving fish in fresh water ponds...Fishing by hoop-net, draw-net, purse-net, catching-net, cod-net, bley-net or with any other engine machine, arts, or ways and means whatsoever, other by an by angling with angle-rod, hoot, and line, was subject to a fine of 20 shillings.”
    1754-the first bloodshed in the French and Indian War occurred on an isolated mountainside a few miles east of Uniontown, PA. Lieutenant Colonel George Washington, at the head of several companies of Virginia militia, reached the Monogahela River and overtook a French reconnoitering party from Fort Duquesne ( the future site of Pittsburgh). Jumonville, the French commander was slain and his force captured. In a surprise attack, the Virginians killed 10 French soldiers from Fort Duquesne, including the French commander, Coulon de Jumonville, and took 21 prisoners. Only one of Washington's men was killed. The French and Indian War was the last and most important of a series of colonial conflicts between the British and the American colonists on one side, and the French and their broad network of Native American allies on the other. From this base, he ambushed an advance detachment of about 30 French, striking the first blow of the French and Indian War. For the victory, Washington was appointed a full colonel and reinforced with several hundred Virginia and North Carolina troops. On July 3, the French descended on Fort Necessity with their full force, and after an all-day fight Washington surrendered to their superior numbers. The disarmed colonials were allowed to march back to Virginia, and Washington was hailed as a hero despite his surrender of the fort. The story of the campaign was written up in a London gazette, and Washington was quoted as saying, "I have heard the bullets whistle; and believe me, there is something charming in the sound." Reading this, King George II remarked, "He would not say so if he had been used to hear many." In October 1754, Washington resigned his commission in protest of the British underpayment of colonial offices and policy of making them subordinate to all British officers, regardless of rank. With the signing of the Treaty of Paris in February 1763, France lost all claims to the mainland of North America east of the Mississippi and gave up Louisiana, including New Orleans, to Spain. Fifteen years later, French bitterness over the loss of their North American empire contributed to their intervention in the American Revolution on the side of the Patriots, despite the fact that the Patriots were led by one of France's old enemies, George Washington.
    1774-- First Continental Congress convenes in Virginia.
    1807-birthday of Louis Agassiz, professor of zoology and geology at Harvard, born at Motier, Switzerland. He was a major influence in spawning American interest in natural history and helped to establish the Harvard Museum of Comparative Zoology. “ The eye of the trilobite,” Aggassiz wrote in 1870, “ tells us that the sun shone on the old beach where he lived; for there is nothing in nature without a purpose and when so complicated an organ was made to receive the light, there must have been light to enter it.” Died at Cambridge, MA, Dec. 17, 1873.
    1814-birthday of Daniel Reaves Goodloe, emancipatist; A Crusading Abolitionist in Reconstruction North Carolina
http://docsouth.unc.edu/nc/goodloe/title.html
http://docsouth.unc.edu/nc/goodloe/menu.html
http://www.lib.unc.edu/mss/inv/g/Goodloe,Daniel_R.html
    1818-Former president Thomas Jefferson set forth in a letter to a Jewish journalist his opinion of religious intolerance: 'Your sect by its sufferings has furnished a remarkable proof of the universal point of religious insolence, inherent in every sect, disclaimed by all while feeble and practiced by all when in power. Our laws have applied the only antidote to this vice, protecting our religions, as they do our civil rights, by putting all on equal footing. But more remains to be done.'
    1830-The Indian Removal Act was signed by President Andrew Jackson. It called for resettlement of all Indians east of the Mississippi River to lands west of it. The sum of $500,000 was appropriated by Congress to compensate Indians and pay the cost of resettlement.
    1831-birthday of Eliza Ann Gardner, underground railroad conductor, “known as the Julie Ward Howe of the Negro race.” http://digilib.nypl.org/dynaweb/digs-b/wwm97253/@Generic__BookTextView/2438
    1851-The Ohio Woman's Rights Convention met in Akron, an historic meeting of women calling for equal rights.
http://memory.loc.gov/ammem/today/may28.html
    1855- Abby Leach birthday; U.S. teacher whose profound knowledge of Greek impressed Harvard professors enough to open their doors a crack in 1879 for women through what they called the Harvard Annex. It would become Radcliffe College.
http://www.vroma.org/~bmcmanus/macurdyperformance.html
http://www.vroma.org/~bmcmanus/life.html
http://www.radcliffe.edu/quarterly/199902/rad_har-5.html
    1858- Lizzie Black Kander birthday - U.S. philanthropist. Thousands of immigrants and poor in the Milwaukee area received a help because of this remarkable woman. Starting with organizations that distributed food and clothing to needy immigrants, she helped form and headed the city's first settlement house (1900-1918). As a 1901 fund-raiser, she supervised the printing of a cookbook. She expanded it and used the profits for charity. Still in print many years after Lizzie's death in 1940, The Settlement Cook Book, Treasured Recipes of Seven Decades, sold more than a million copies in 23 editions.
http://search.eb.com/women/articles/Kander_Lizzie_Black.html
http://www.jsonline.com/Entree/cooking/apr01/settle18041601.asp
http://www.uwm.edu/Library/arch/jews/image7.htm
    1863-The 54th Massachusetts Infantry, the most famous African- American regiment of the war, leaves Boston for combat in the South. For the first two years of the war, President Abraham Lincoln resisted the use of black troops despite the pleas of men such as Frederick Douglass, who argued that no one had more to fight for than African Americans. Lincoln finally endorsed, albeit timidly, the introduction of blacks for service in the military in the Emancipation Proclamation. On May 22, 1863, the War Department established the Bureau of Colored Troops to recruit and assemble black regiments. Many blacks, often freed or escaped slaves, joined the military and found themselves usually under white leadership. Ninety percent of all officers in the United States Colored Troops (USCT) were white. Colonel Robert Gould Shaw, the idealistic scion of an abolitionist family, headed the 54th. Shaw was a veteran of the 2nd Massachusetts infantry and saw action in the 1862 Shenandoah Valley and Antietam campaigns. After being selected by Massachusetts Governor John Andrew to organize and lead the 54th, Shaw carefully selected the most physically fit soldiers and white officers with established antislavery views. The regiment included two of Frederick Douglass's sons and the grandson of Sojourner Truth.
On May 28, 1863, the new regiment marched onto a steamer and set sail for Port Royal, South Carolina. The unit saw action right away, taking part in a raid into Georgia and withstanding a Confederate attack near Charleston. On July 16, 1863, Shaw led a bold but doomed attack against Fort Wagner in which he and 20 of his men were killed. The story of Robert Gould Shaw and the 54th Massachusetts was immortalized in the critically acclaimed 1990 movie Glory, starring Mathew Broderick, Denzell Washington, and Morgan Freeman.
http://www.54thmass.org/
    1875-Birthday of American composer Fred Jewell, Worthington, IL. Died Feb. 11, 1936, Worthington, IL. Over the next two decades he rose through the ranks of the circus composers and bandmasters, becoming the Music Director of the Barnum & Bailey Greatest Show on Earth in 1908. His circus career ended in 1917, and he moved to Oskaloosa IA to assume the conductorship of the Iowa Brigade Band. There he started his own publishing company, which moved with him back to Worthington IN in 1923. He served as the high school band director, conductor of the Murat Temple Shrine Band and the Sahara Grotto Band in Indianapolis, and he continued to compose music for bands. His most famous marches are E Pluribus Unum (1917), Quality-plus (1913), Supreme Triumph (1920) and The Old Circus Band (1923).
    1879-Illionis prohibited employment of women in coalmines in their state.
The first law enacted in the United States to protect women in employment.
    1880 -Savoy, Texas was hit by an f4 tornado. 14 people were killed and 60 were injured. It leveled the entire business and northeast residential sections. The tornado was described as "a funnel blazing with balls of fire".
    1892---the Sierra Club was founded by famed naturalist John Muir. The Sierra Club promotes conservation of the natural environment by influencing public policy. It has been especially important in the founding of and protection of our national parks. www.sierraclub.org
    1888-birthday of James Francis “Jim” Thorpe, Olympic gold medal track athlete, baseball player and football player born at Prague, OK. Thorpe, a Native American, won the4 pentathlon and the decathlon of the 1912 Olympic Games, but later lost his medals when Olympic officials declared a stint as a minor league baseball player besmirched his amateur standing. He later played professional baseball and football and was acclaimed the greatest male athlete of the first half of the 20th century. Died at Lomita, CA, Mar 28, 1953(Thorpe’s medals were returned to his family many years after his death when the earlier decision was reversed.) http://www.yvwiiusdinvnohii.net/history/ThorpeAthleteOfTheCentury.htm
http://www.alphacdc.com/necona/athlete_of_the_century.html
(lower half of: http://memory.loc.gov/ammem/today/may28.html )
    1898-birthday of great bandleader Andy Kirk, Newport, KY.
http://www.redhotjazz.com/cloudsofjoy.html
    1900—Birthday of trumpet player Tommy Ladnier.
http://www.redhotjazz.com/Ladnier.html
http://atj.8k.com/noartist/atjladnier.html
    1910—birthday of singer/pianist/song writer Aaron Thibodaux “ T-Bone “Walker, Linden, TX. Died March 15,1975
http://www.rockhall.com/hof/inductee.asp?id=206
http://bluesnet.hub.org/artists/tbone.html
    1912—birthday of guitarist David Barbour, Flushing, NY
http://www.allaboutjazz.com/articles/late0202.htm
    1917-General John Joseph Pershing lead members of the American Expeditionary Force to fight in Europe, America’s first entrant into this war. The group included 40 regular army officers, 17 reserve officers, 2 Marine Corps officers, 67 enlisted men, 36 field clerks, 20 civilians, 3 interpreters, and 3 news correspondents. They left New York City on the “Baltic” and arrived in Liverpool England, on June 8, and reached Paris on June 13. The United States had been in a state of war with Germany since April 6, 1917, when it became the 13th national to declare war against the Central Powers.1922 - Otto Krueger conducted the Detroit News Orchestra, the first known radio orchestra, which was heard on WWJ Radio in Detroit, MI. The "Detroit News" owned the radio station at the time.
    1928 - Walter P. Chrysler merged his Chrysler Corporation with Dodge Brothers, Inc. The Dodge Motor Car Company had been purchased several years earlier, from the widows of the two founders, by Clarence Dillon's banking firm for $148 million. The merger of Chrysler and Dodge, the largest automobile industry merger in history at the time, placed the newly consolidated firm third in production and sales, just behind General Motors and Ford Motor Company. Their vehicles have always been popular with law enforcement, the Blues Brothers, and my son drives a Dodge truck, which he swears is the best made in the industry.
    1929 - Warner Brothers debuted the first all-color talking picture. The film debuted at the Winter Garden Theatre in New York City. Ethel Waters, Joe E. Brown, Betty Compson and Arthur Lake starred in "On with the Show," based on a story by Humphrey Pearson.
    1931-birthday of guitarist Sonny Burgess, Newport, AR
http://www.deltaboogie.com/deltamusicians/burgess.htm
    1931 - WOR radio in New York City premiered "The Witch’s Tale". The program was broadcast on the Mutual Broadcasting System (of which WOR was the flagship station) where it aired until 1938. My late father Lawrence Menkin started out as a radio writer, and wrote many of these and soap operas. In the late 1940’s, he became general manager of WOR-TV, producing the first early television drama’s, such as “Harlem Detective,” “Hands of Murder,” and the first “Captain Video,” all shows he created, wrote, produced and directed.
    1934 - The Dionne quintuplets were born near Callender, Ontario to Oliva and Elzire Dionne. They were the first quintuplets to survive infancy. This increase in Canada’s population became known as Marie, Cecile, Yvonne, Emilie and Annette. All five survived into adulthood, Cecile, Annette, Yvonne, Emilie and Marie. Their father, Elzire, signed to have them exhibited at the Chicago World's Fair only hours after they were born without permission from their mother. The Ontario provincial government intervened on behest of the doctor who delivered them. The government took custody of the children in what has been described more as a political move than a humanitarian one, and yet, at the time, it was a popular decision because of the family's poverty and the father's willingness to exploit the children in unsafe ways. The doctor became a wealthy man acting as their caretaker as he, as the government's representative, housed them in a modern home (across the road from the Dionne home) and showed them to the public from the porch. He and the government used their names and celebrity status in various ways to make millions. Hardly anyone around these children acted in their interest.
It took until 1997 for the surviving sisters to win monetary awards from the Canadian government for its exploitation of them. Their mother was not allowed any more intimacy with them than a tourist and she had no legal rights to claim them under the church dominated laws of the time in that area.
http://www.city.north-bay.on.ca/quints/digitize/dionne.htm
    1935-John Steinbeck’s Tortilla Flat is published. The novel's endearing comic tone captured the public's imagination, and the novel became a financial success. Steinbeck's next works, In Dubious Battle and Of Mice and Men, were both successful, and in 1938 his masterpiece The Grapes of Wrath was published. The novel, about the struggles of an Oklahoma family who lose their farm and become fruit pickers in California, won a Pulitzer Prize in 1939. Steinbeck's work after World War II, including Cannery Row and The Pearl, became more sentimental. He also wrote several successful films, including Forgotten Village (1941) and Viva Zapata! (1952). He became interested in marine biology and published a nonfiction book, The Sea of Cortez, in 1941. His travel memoir, Travels with Charlie, describes his trek across the U.S. in a camper. Steinbeck won the Nobel Prize in 1962 and died in New York in 1968.
    1937-The Golden Gate Bridge opens to cars At noon, President Franklin Roosevelt presses a telegraph key in the White House, and the bridge is opened to vehicular traffic. The previous day, the bridge was inaugurated and opened to pedestrian traffic.
Until the Verrazano Narrows Bridge was completed in 1964, the Golden Gate's structural steel suspension span was the longest in the world. (Today, the Akashi-Kaikyo Bridge in Japan boasts the longest span at over 2000 meters.). The Golden Gate Bridge was designed by Clifford Paine, who submitted the final blueprints for approval in 1930. It then took three years for the builders to attain the approval of the military, the city financiers, and the voting public. Construction of the bridge began on January 5, 1933.
The Golden Gate Bridge cost the community nearly $35 million during its five-year construction. Its name is derived from the body of water over which it spans, Golden Strait. The "gold" comes from the strait's location at the mouth of the North Bay, beyond which lies the gold of California. Other have mentioned that the Golden Gate Bridge is the Gateway to the Land of the Setting Sun, but they didn't mention this until nearly thirty years after the bridge was originally erected.
    1938-Benny Goodman records “Big John Special.” Two points if you know who “Big John” was.
Other sites about the “King of Swing,” who also was a fine symphonic clarinetist.
http://www.nw-cybermall.com/JazzWorld/goodman.htm
    1938-birthday of former coach and basketball Hall of Fame guard Jerry Alan West, Cheylan, WV.
    1939- Helen Hadassah Levinthal birthday, becomes the first Jewish woman to receive a degree from a Jewish college of theology. She received a Master of Hebrew Literature from the Jewish Institute of Religion.
    1941 - Frank Sinatra joined Tommy Dorsey’s orchestra in recording "This Love of Mine" for Victor Records.
    1942 - The rest of the Japanese forces directed at Midway set out. Admiral Yamamato, commanding the operation overall, believes that, if the plan to invade the island succeeds, the American fleet can be forced into a decisive engagement and that their defeat will force a truce before American production can swamp the Japanese war effort.
    1944-birthday of Rudolph Giuliani, former Mayor of New York City, born Brooklyn, NY.
    1944-Gladys Knight, singer, born Atlanta, GA. The first hit was in 1961 with "Every Beat of My Heart." Her group continued to record hits throughout the 1960s, '70s, and '80s. Among their best-known songs are "I Heard It Through the Grapevine" (1967), "Midnight Train to Georgia" (1973), and "Love Overboard" (1987).
    1944--DAVILA, RUDOLPH B. Medal of Honor
Staff Sergeant Rudolph B. Davila distinguished himself by extraordinary heroism in action, on 28 May 1944, near Artena, Italy. During the offensive which broke through the German mountain strongholds surrounding the Anzio beachhead, Staff Sergeant Davila risked death to provide heavy weapons support for a beleaguered rifle company. Caught on an exposed hillside by heavy, grazing fire from a well-entrenched German force, his machine gunners were reluctant to risk putting their guns into action. Crawling fifty yards to the nearest machine gun, Staff Sergeant Davila set it up alone and opened fire on the enemy. In order to observe the effect of his fire, Sergeant Davila fired from the kneeling position, ignoring the enemy fire that struck the tripod and passed between his legs. Ordering a gunner to take over, he crawled forward to a vantage point and directed the firefight with hand and arm signals until both hostile machine guns were silenced. Bringing his three remaining machine guns into action, he drove the enemy to a reserve position two hundred yards to the rear. When he received a painful wound in the leg, he dashed to a burned tank and, despite the crash of bullets on the hull, engaged a second enemy force from the tank’s turret. Dismounting, he advanced 130 yards in short rushes, crawled 20 yards and charged into an enemy-held house to eliminate the defending force of five with a hand grenade and rifle fire. Climbing to the attic, he straddled a large shell hole in the wall and opened fire on the enemy. Although the walls of the house were crumbling, he continued to fire until he had destroyed two more machine guns. His intrepid actions brought desperately needed heavy weapons support to a hard-pressed rifle company and silenced four machine gunners, which forced the enemy to abandon their prepared positions. Staff Sergeant Davila's extraordinary heroism and devotion to duty are in keeping with the highest traditions of military service and reflect great credit on him, his unit, and the United States Army.
    1944-Singer Billy Vera is born.
    1945-birthday of guitarist/song writer John Fogerty, Berkeley, CA
Among the songs he writes are ``Proud Mary,'' ``Have You Seen the Rain'' and ``Bad Moon Rising.''
http://www.geocities.com/Heartland/Pointe/6508/fogerty.htm
    1948---Top Hits
Nature Boy - Nat King Cole
Now is the Hour - Bing Crosby
Baby Face - The Art Mooney Orchestra
Texarkana Baby - Eddy Arnold
    1951-After failing to get a hit in his first three major league games, Willie Mays of the New York Giants broke his 0-for-12 skein by hitting a home run off Warren Spahn of the Boston Braves.
    1951 - U.N. Forces drove the communists' back across the 38th parallel on most of the Korean battlefields.
    1951 - Eighth Army took Hwachon and Inje.
    1952-- *KELLY, JOHN D. Medal of Honor
Rank and organization: Private First Class, U.S. Marine Corps, Company C, 1st Battalion, 7th Marines, 1st Marine Division (Rein.). Place and date: Korea, 28 May 1952. Entered service at: Homestead, Pa. Born: 8 July 1928, Youngstown, Ohio. Citation: For conspicuous gallantry and intrepidity at the risk of his life above and beyond the call of duty while serving as a radio operator of Company C, in action against enemy aggressor forces. With his platoon pinned down by a numerically superior enemy force employing intense mortar, artillery, small-arms and grenade fire, Pfc. Kelly requested permission to leave his radio in the care of another man and to participate in an assault on enemy key positions. Fearlessly charging forward in the face of a murderous hail of machine gun fire and handgrenades, he initiated a daring attack against a hostile strongpoint and personally neutralized the position, killing 2 of the enemy. Unyielding in the fact of heavy odds, he continued forward and single-handedly assaulted a machine gun bunker. Although painfully wounded, he bravely charged the bunker and destroyed it, killing 3 of the enemy. Courageously continuing his 1-man assault, he again stormed forward in a valiant attempt to wipe out a third bunker and boldly delivered pointblank fire into the aperture of the hostile emplacement. Mortally wounded by enemy fire while carrying out this heroic action, Pfc. Kelly, by his great personal valor and aggressive fighting spirit, inspired his comrades to sweep on, overrun and secure the objective. His extraordinary heroism in the face of almost certain death reflects the highest credit upon himself and enhances the finest traditions of the U.S. Naval Service. He gallantly gave his life for his country.
    1953 - The first 3-D (three-dimensional) cartoon world premier at the Paramount Theatre in Hollywood, California and downtown Paramount Theatre, LA. The production, a Walt Disney creation/RKO picture, was titled, "Melody".
    1955-birthday of Ronald Lawrence (Ron” Wilson, hockey coach, born, Windsor, Ontario, Canada.
    1955-"The Ballad of Davy Crockett" is the most popular song in the United States. Billboard refers to the tune as "disc entity" and reports if the sales of the other versions were all added up, including the original done by Fess Parker, more than 18-million copies have been bought in six months.
    1956---Top Hits
Heartbreak Hotel/I Was the One - Elvis Presley
The Wayward Wind - Gogi Grant
The Happy Whistler - Don Robertson
Blue Suede Shoes - Carl Perkins
    1957 - National League club owners voted to allow the Brooklyn Dodgers to move to sunny Southern California and said that the New York Giants baseball team could move with the Horace Stoneham family to Northern California. The teams went on to establish themselves in Los Angeles and San Francisco.
    1957 - The National Academy of Recording Arts and Sciences (NARAS) was established. This is the organization that brings us the Grammy Awards for all forms of musical entertainment each year.
    1958 - The American League voted to divide itself into two divisions and reduce its schedule to 156 games.
    1959 - Abel and Baker were two one pound monkeys, one a rhesus, the other a spider monkey, survived a 15-minute flight trip into space in separate containers in the nose cone of Jupiter rocked launched at Cape Canaveral, FL. The cone was hot 300 miles into space and was recovered about 90 minutes later off the island of Antiqua, about 1,500 miles away, by Navy frogmen from the tug Kiowa. A previous attempt made on December 13, 1958, has been unsuccessful.
    1959-birthday of former football coach and player, David Donald Shula, Lexington, KY.
    1963 -- Medgar Evers gets agreement of negotiations in the All-American city of Jackson, Mississippi — which is then withdrawn; four students and a professor harassed during sit-in at Woolworth's lunch counter. A few days earlier the garage of his house was bombed and on June 12, a few hours after President John F. Kennedy had made an extraordinary broadcast to the nation on the subject of civil rights, Medgar Evers was shot and killed in an ambush in front of his home. Byron de La Beckwith, a white segregationist, was charged with the murder. He was set free in 1964 after two trials resulted in hung juries but was convicted in a third trial held in 1994.
    1964---Top Hits
My Guy - Mary Wells
Love Me Do - The Beatles
Chapel of Love - The Dixie Cups
My Heart Skips a Beat - Buck Owens
    1966 - Percy Sledge hit number one with his first -- and what turned out to be his biggest -- hit. "When a Man Loves a Woman" would stay at the top of the pop music charts for two weeks. It was the singer’s only hit to make the top ten and was a million seller.
    1966-Ike and Tina Turner's "River Deep, Mountain High" is released. It stays on the chart for four weeks and reaching as high as #88. The record's producer Phil Spector considers the song the high point of his legendary production career and is so embittered by it not doing well in America that he would go into seclusion for two years.
    1966-The Temptation's "Ain't Too Proud to Beg" is released and enters the Hot 100, where it will stay for thirteen weeks, peaking at #13. It will later be covered by the Rolling Stones on their album "It's Only Rock n' Roll, and will be a hit for them as well.
    1968 - No. 1 Billboard Pop Hit: ``Mrs. Robinson,'' Simon & Garfunkel.
    1968-The American League announced that it would split into two divisions for the 1969 season. Teams in the AL East included the Baltimore Orioles, the Boston Red Sox, the Cleveland Indians, the Detroit Tigers, the New York Yankees and the Washington Senators. The AL West was comprised of the California Angeles, the Chicago White Sox, the Kansas City Royals, the Minnesota Twins, the Oakland Athletics and the Seattle Pilots.
    1972---Top Hits
Oh Girl - Chi-Lites
I’ll Take You There - The Staple Singers
Look What You Done for Me - Al Green
(Lost Her Love) On Our Last Date - Conway Twitty
    1975 - The Doobie Brothers went gold with the album, "Stampede". The group, formed right here in San Jose, CA, recorded 16 charted hits. Two made it to number one, becoming million-selling, gold record winners: "Black Water" [March, 1975] and "What a Fool Believes" [April, 1979].
    1978 - No. 1 Billboard Pop Hit: ``Too Much, Too Little, Too Late,'' Johnny Mathis/Deniece Williams.
    1978-the first Casino outside the state of Nevada opened in Atlantic City, NY, after the state’s voters approved legalized casino gambling in 1977. Resorts International opened the casino in a hotel on the Atlantic City boardwalk. The first week’s take was $2.6 million.
    1980---Top Hits
Call Me - Blondie
Funkytown - Lipps, Inc.
Don’t Fall in Love with a Dreamer - Kenny Rogers with Kim Carnes
Starting Over Again - Dolly Parton
    1982 - The legendary train, "Orient Express", made popular through Agatha Christie’s thrilling mystery novel, "Murder on the Orient Express", was reborn. The 26-hour train trip resumed across the European continent after a long respite. While I have never had the pleasure, I am told by people who rode it, it was a great trip I know several chefs on the West Coast who said they learned to cook on this train, where food and wine was “the best,” they told me.
    1985 - Gay Mullins, a retiree from Seattle, WA, founded Old Cola Drinkers of America. This was an effort to bring back the original Coca-Cola, instead of the New Coke that the Atlanta-based company had foisted on the American cola-drinking market. By July of 1985, with arms firmly twisted behind their backs, Coca-Cola Company executives relented , kept the new formula on the market, but returned with: Classic Coke.
    1985 - "Vanity Fair" magazine, with a picture of President Ronald Reagan and First Lady Nancy kissing on the cover, went on sale. Whether you area Republican or Democrat, their “love affairs” was genuine, as expressed
in this book, “ I Love You, Ronnie.”
http://www.amazon.com/exec/obidos/tg/stores/detail/-/books/0375505547/reviews/
ref=pm_dp_ln_b_6/103-4369609-9927846
    1986-Viewers of Dick Clark's "America Picks the #1 Songs" chose Bill Haley's "Rock Around the Clock," "Simon & Garfunkel's "Bridge Over Troubled Water" and Lionel Richie's "All Night Long" as the greatest hits of the rock era.
    1987 -Thunderstorms produced torrential rains in Oklahoma and Northern Texas. Lake Altus, Oklahoma was deluged with 9 inches of rain. Up to 8 inches of rain drenched Northern Texas and baseball size hail was reported north of Seminole and at Knickerbocker. 10 To 13 inches of rain inundated central Oklahoma over the last 5 days of the month resulting in an estimated 65 million dollars damage. Flooding forced several thousand people to evacuate their homes, many by boat or by helicopter.
    1988---Top Hits
One More Try - George Michael
Shattered Dreams - Johnny Hates Jazz
Naughty Girls (Need Love Too) - Samantha Fox
Eighteen Wheels and a Dozen Roses - Kathy Mattea
    1989 - Unseasonably hot weather continued in Florida. Five cities reported record high temperatures for the date. The record high of 98 degrees at Lakeland, FL, was their fifth in a row. Thunderstorms produced severe weather in Florida late in the day, with golf ball size hail reported at Kissimmee.
    1990 - Two to five inches of rain over southeastern Ohio on the 28th and 29th capped an exceptionally wet month of May, and triggered widespread flooding. Flooding which resulted claimed three lives, and caused millions of dollars damage. Numerous roads in southeast Ohio were flooded and impassable, and many other roads were blocked by landslides.
    1996 -In a 12-8 win at the Kingdome, Orioles' third baseman Cal Ripken has his first career three-homer game and collects a career-high eight RBIs.
    1996-US President Clinton's former business partners in the Whitewater land deal, James and Susan McDougal, and Arkansas Gov. Jim Guy Tucker, were convicted of fraud. Tucker was charged with creating a sham bankruptcy to avoid paying taxes on profits from a sold cable TV company in which he was a partner. Tucker resigned after the verdict. He briefly reversed his decision, but finally stepped down in July. In 1998 Tucker pleaded guilty to a felony charge of fraud and agreed to cooperate with prosecutors of independent council Kenneth Starr.
    1998 - Elton John & Bernie Taupin's global hit "Candle In the Wind '97" is a double winner at the Ivor Novello Awards held at London's Grosvenor House Hotel. The song commemorating the late Princess Diana wins best-selling U.K. single and international hit of the year. Accepting the award, John calls his victory "bittersweet," noting, "I wish this record had never had to be made."
    1998-- First Hawaiian Inc. and BancWest Corp. joined forces to create a $14 billion banking major banking entity based in the western United States. The merger, which cost around $1 billion, gave First Hawaiian's stockholders a small majority stake in the new institution.
    2000- The Angels, for the first time in franchise history, hit four home runs in one inning. Anaheim goes yard four times in the fifth inning with Darin Erstad, Mo Vaughn, Tim Salmon and Garret Anderson supplying the fireworks in the 11-4 victory.
    2003 -When Rafael Furcal, Mark DeRosa and Gary Sheffield all go deep off Reds' Jeff Austin in the bottom of the first inning, the Braves become only the second team in big league history to begin a game with three consecutive home runs.
    2006-- At AT&T Park, Barry Bonds passes Babe Ruth the all-time home run list taking sole possession of second place as he hits the 715th homer of his 21-year big league career. The historic homer, which comes off a 90-mph fastball thrown by Byung-Hyum Kim of the Rockies, makes the Giants outfielder the most prolific left-handed slugger in baseball history.

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