Monday, October 20, 2008

Headlines---

Correction: www.LearnLeasing.com
    Classified Ads---Sales
        Kit Menkin heard on the Grapevine
            Mortgage rates skyrocket
Housing recovery late 2010 or 2011
    Cartoon---Up to you, Miller
        Top Stories---October 13-October 17
    Highline secures $20 MM in Bank Lines
Leasing 102 by Mr. Terry Winders, CLP
“Method of Payment"
    Comerica Reports 3rd Quarter Earnings
        CVB Financial Reports 3rd Q Earnings
Deficit Rises, Consensus Is to Let It Grow
    Leasing Vendors Finance Tightens
        Several Georgia banks in jeopardy
Dutch govt. injects 10 bb euros into ING
    UPS to raising rates by 5.9 %
        News Briefs---
You May have Missed---
Rethinking Legal Fees for Lean Times
    Sports Briefs---
        Today's Top Event in History
            This Day in American History
Baseball Poem
    SuDoku
        Daily Puzzle
GasBuddy
    Weather , USA or specific area
        Traffic Live----

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

---------------------------------------------------------------------------

Correction: www.LearnLeasing.com

--Special----
“My Reaction to the Credit Crisis”
by Gerry Egan, www.LearnLeasing.com

While the introduction had a typo in the web address in the headline, the signature at the end had the correct web address.

Web Trend reports Gerry's article was very well read.

If you missed it, it is available at:
http://www.leasingnews.org/#reaction

[headlines]

--------------------------------------------------------------

Classified Ads---Sales

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

To place a free “job wanted” Leasing News ad:
http://www.leasingnews.org/Classified/Jwanted/Jwanted-post.htm

ELFA Career Center : Job Seekers ( free ):
http://careers.elfaonline.org/search.cfm

[headlines]

--------------------------------------------------------------

Kit Menkin heard on the Grapevine

In contacting presidents of leasing companies to obtain a comment about the leasing business today and what they see for the fourth quarter, many did not want to make a prediction. “Off the record” they were “worried,” some “insecure” and I would say quite serious about the government getting into the banking business and the decisions being made recently on the government getting into private business. They were also concerned about rumor that banks and other lenders were turning off leasing lines of credit, in fact, making some exit the leasing business.

Last week there were at least four telephone conversations they their company was not exiting, although emails sent to Leasing News reported otherwise. All leads are checked out, often direct with the president of the company. None that I spoke with were surprised. Several had already heard the same rumors, deciding how to address the rumors. To bring public and deny them would bring more attention. To remain silent was letting the rumors fly.

There have been many companies exiting lease funding, as well as cutting back, letting direct and indirect sales personnel (discounters and broker) go, some for poor portfolio performance, others because they are raising their criteria, also meaning not working with those who do not send them a steady stream of bookable leases.

One day we wrote stories on four, and the latest was on Friday with Textron's announcement that they are downsizing their commercial finance business. Even GE has been affected.

There definitely is fear in the consumer and commercial marketplace.

To deny this is not being realistic. Reaction by many banks and others involved in making “buy decisions” has been more due diligences where the lease is coming from as well backing away from “application only, “ meaning requiring financial statement and tax returns on smaller dollar leases, and backing away from "application only."

At the same time, there has been an increase from those in the "C" and "D" marketplace. One of the best campaigns I have seen comes from Brad Peterson at PredictiFund. He sent me a Federal Express package, that got my immediate attention, with a letter that starts the letter saying, “We want your C and D Paper Flow!" On the right side, circled, "PredictiFund Your Declines." The letter is signed Brad Peterson, DD (Declination Doctor, PredictiFund, Inc. P.S. We want your C and D paper. No credit cards needed! "

What I like best was the notepad included in the form of a doctor's prescription pad, as well as a RX bottle of pills with the instructions on front: "Take 1 Tablet by mouth as needed for leasing declination pain."

This cycle has also been good for those who the industry calls “super brokers.” Having the knowledge of who does what and why and getting the transaction done has become even more important.

Certainly the age of “app. only” is changing as delinquencies and write-offs on this business are definitely up.

Speaking of up, Collections are reportedly that way at Marlin Business Services, as noted by their SEC filing on the change of delinquency percentages, as well as the fact that Exec. VP, Corporate secretary, Attorney George Pelose is out of his office, reportedly using a cubicle in the collection department, making calls. The bad news is the head of Marlin Collections, Mike McGinnely(sp?) has resigned, Leasing News is told.

Allegedly Marlin has a law suit against previous employees, many at Latitude Equipment Leasing, Marlton , NJ , with claims of proprietary information, calling ex-customers and vendors, as well as disclosing inside information to Leasing News!!! They tried that with Direct Capital, and you don't cross Chris Broom for many reasons, including he is more active in protecting his company in court and wins many settlements. (Yes, don't fool around with Broom.) The fact that Gary Kester left a long time ago or Mike Bennie was fired by George Perose and if he is calling past relations that is certainly not illegal.

No one at Latitude will confirm or deny the lawsuit, and as soon as we can locate it in Pacer, we will print it for readers to verify our reporting.)

At the NetSol Conference in Emeryville, I sat at various tables before my talk, most of them were automobile people, captive lessors, and one was from Nissan. I told him I had just written a story that 600

car dealerships were reportedly going to close this year. He said they probably were all Detroit as they have been out of touch for a while. He said his company was gearing up to produce electric cars, as there was no profit in hybrids and Nissan thinks it will be electric cars that will become the most popular.

Look for ELFA to get some new members from the EAEL-UAEL merge.
On January 1st, everyone else let go for Meeting Enterprises, Atlanta , Ga. to take over. Woodley and Alison remain as liaison, everyone else let go, including membership executive Bill Grohe (both he and Woodley took the position only for an interim, but that was a few years ago.) Also the merger is well financial: $300,000 in UAEL positive and $100,000 in EAEL positive. They reported NAFA (National ***** intend to go after small to middle size lessors and professional brokers who find ELFA too expensive and NAELB primarily for beginners (that's what several directors told Leasing News.)

At the end of Shawn Halladay's great report on the Equipment Leasing and Finance Association Conference in New Orleans , he ended with "Ride, Sally, Ride." I thought our best writer was making a comment about the economy:

"Ride, sally, ride
Its not your time or way of confusion
Ride, sally, ride
cause if you don't, you'll get a contusion."

He emailed back: "Sorry, Kit, not that song. The band did Mustang Sally as one of their last songs, and ELFA's Sally Maloney, who planned the conference, got up on stage and danced with the singer. People loved it.”

Wilson Pickett made this song popular in 1965.

(You can hear it here, takes a few seconds to load or view the lyrics below:

http://www.jango.com/music/Wilson+Pickett?l=0

Mustang Sally, think you better slow your mustang down.
Mustang Sally, think you better slow your mustang down.
You been running all over the town now.
Oh! I guess I'll have to put your flat feet on the ground.

All you want to do is ride around Sally, ride, Sally, ride.
All you want to do is ride around Sally, ride, Sally, ride.
All you want to do is ride around Sally, ride, Sally, ride.

One of these early mornings, oh, you gonna be wiping your weeping eyes.
I bought you a brand new mustang 'bout nineteen sixty five
Now you come around signifying a woman, you don't wanna let me ride.
Mustang Sally, think you better slow your mustang down.
You been running all over the town now.
Oh! I guess I'll have to put your flat feet on the ground.

All you want to do is ride around Sally, ride, Sally, ride.
All you want to do is ride around Sally, ride, Sally, ride.
All you want to do is ride around Sally, ride, Sally, ride.

(Rock'n”Roll fans will note in all Leasing News “This Day in American History”
we highlight events and songs.)

[headlines]

--------------------------------------------------------------

Mortgage rates skyrocket

By Holden Lewis • Bankrate.com

Mortgage rates skyrocketed this week as Wall Street tried to discern the ever-shifting contours of the Great Bailout.

The benchmark 30-year fixed-rate mortgage rose 54 basis points to 6.74 percent, according to the Bankrate.com national survey of large lenders. A basis point is one-hundredth of 1 percentage point. The mortgages in this week's survey had an average total of 0.42 discount and origination points. One year ago, the mortgage index was 6.16 percent; four weeks ago, it was 6.49 percent.

The benchmark 15-year fixed-rate mortgage rose 45 basis points to 6.4 percent. The benchmark 5/1 adjustable-rate mortgage rose 40 basis points to 6.61 percent.

It was the biggest weekly rise in the Bankrate.com index in more than 21 years. In April 1987, the benchmark mortgage rate jumped 86 basis points in one week, from 9.44 percent to 10.3 percent. Between then and now, the biggest one-week increase occurred exactly 10 years ago this week, when the 30-year jumped 44 basis points, to 6.9 percent.

[headlines]

--------------------------------------------------------------

Housing recovery late 2010 or 2011

For over five years Leasing News has been printing analyst Al Schuler's housing reports. He works out of the USDA Forest Service in Princeton , West Virginia . His reports on housing have been way ahead of the rest. Several years ago readers asked why Leasing News

was reporting these. At the time, it was indicated how much the housing market was affecting the economy, as well as the accuracy of Mr. Schuler. In the last year, his superiors have put guidelines on his reporting as his viewpoint has conflicted with administrative statements.

He does communicate personally with views of the industry to those of us who have requested it. The latest:

"...the consensus is that there will be no recovery in housing until late 2010 or perhaps not until 2011.

"The most recent recovery package (i.e., $700 billion) is focused primarily on the credit freeze - that will take time to work - months perhaps as there are no explicit requirements for the banks to start lending again. Most analysts feels that additional measures will be needed to shore up housing - the key is for prices to stabilize. When that happens, lenders will see reason for lending again. Nobody wants to lend when prices are falling.

Now, we have some complicating factors - a recession or near recession in the U.S. and this is precipitating a global slowdown. One positive is oil prices – in the past two months, they have fallen from $145/barrel to $72/barrel today (West Texas Intermediate). That should help on the inflation front although longer term, one has to wonder about escalating government debt and its impact on the dollar and interest rates. Interesting times for sure.

Not a good picture for solid wood product markets, but when housing does eventually rebound, wood product prices will certainly benefit. I guess the key is to try and hang in there because things will eventually get much better.

Here is a 61 page report on the timber industry and its affect on hardwood and forestry throughout the world, summed up in this last powerpoint presentation:

Concluding thoughts

• Globalization factors forcing U.S. to “rethink competitive strategies”as U.S. secondary industry loses market share Future fiber prices to increase

– convergence of markets for fuel, fiber, and other forest products
– structural changes in world log markets as Russia hikes export tariffs
– forest ownership transfers
– Asia 's growing wood deficit

• Center of Economic activity moving to Asia
• Housing crisis impacts hardwood industry

Best strategy for future - Do what you can do better than anyone else!!!!!

Hardwood Report:
http://leasingnews.org/PDF/Ecological_Workshop.pdf

[headlines]

--------------------------------------------------------------

[headlines]

--------------------------------------------------------------

Top Stories---October 13-October 17

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

(1) GE Capital Rumors Confirmed
http://www.leasingnews.org/archives/October%202008/10-15-08.htm#gec

(2) GE becoming more “conservative”
http://www.leasingnews.org/archives/October%202008/10-13-08.htm#ge

(3) Business Direct Capital, Carlsbad , California
Bulletin Board Complaint
http://www.leasingnews.org/archives/October%202008/10-13-08.htm#bbc

(4) Balboa Capital says it has secured $100 MM
http://www.leasingnews.org/archives/October%202008/10-17-08.htm#balboa

(5) Bank Beat by Christopher Menkin
http://www.leasingnews.org/archives/October%202008/10-13-08.htm#bank

(6) Leasing Business is strong for many---
http://www.leasingnews.org/archives/October%202008/10-15-08.htm#strong

(7) Irwin Financial Up-Date
http://www.leasingnews.org/archives/October%202008/10-15-08.htm#ifc

(8) ELFA President Ken Bentsen on Fox News
http://www.leasingnews.org/archives/October%202008/10-17-08.htm#elfa

(9) Textron Cutting Back Its Finance Arm
http://www.leasingnews.org/archives/October%202008/10-17-08.htm#textron

(10) Peek calls CIT an “underdog”
http://www.leasingnews.org/archives/October%202008/10-17-08.htm#peek

Not counted for technical reasons: Extra
Stock Market Biggest Day in 21 Years

[headlines]

--------------------------------------------------------------

Highline secures $20 MM in Bank Lines

### Press Release#####

“Highline Capital Corp. ( Boulder , Colorado ) has recently obtained $20 million of credit lines to be used for funding leases and as a warehouse line for its $75 million securitization, which can be increased to $125 million.

“With $145 million in lines, John Mehalchin, Chairman & founder of Highline noted, ‘Financial Crisis? Not at Highline. We are prepared to provide funding, as we have been doing for over 29 years, as a direct lender, to sound businesses who have difficulty getting financing from banks and other leasing companies' .”

#### Press Release#####

Funder - Update

A -Accepts Broker Business | B -Requires Broker be Licensed | C -Sub-Broker Program
| D -"Private label Program" | E - Also "in house" salesmen

(KK) Highline Capital: Equipment Restrictions - Software Only

To view the complete list, please click here.

http://www.leasingnews.org/Funders_Only/Funders.htm#highline

Leasing News requested the name(s) of the line of credit for funding leases and warehouse use for securitizations, but Mr. Mehalchin stated it was company policy not to reveal their bank lines of credit.

Here is Mr. Mehalchin biography:

Highline Chairman and CEO John Mehalchin has been with Highline Capital Corp. for 29 years.

Included in both "Who's Who in America” and “Who's Who in Finance and Industry”, Mr. Mehalchin was the Chief Financial Officer of Storage Technology Corporation as well as the founder and president of its finance subsidiary from 1974-1979. During that time, he pioneered the establishment of programs that permitted the sale of equipment with operating leases, non-recourse to third parties, in large volumes. The majority of Storage Tech revenue came from these third party sales.

Mr. Mehalchin's background includes financing of manufacturers with lease-base assets and financing of corporations, as well as management consulting and corporate planning. His professional experience includes employment as an officer with Smith, Barney & Co., and as a management consultant with Booz-Allen.

A member of the Financial Executives Institute since 1974, Mr. Mehalchin also serves on business advisory boards for the University of Colorado , a venture capital fund and a retail firm. He received the Mack Easton Award for Excellence in 1998 and was awarded a Doctor of Humane Letters (2002) from the University of Colorado .

He attended the University of Chicago from which he received a scholarship for doctoral studies in Finance. He completed his studies as a fellowship student at the University of California-Berkeley, receiving an MBA. He also received a BS with honors from Temple University .

http://highlinecapital.com/management.htm

[headlines]

--------------------------------------------------------------

Leasing 102

by Mr. Terry Winders, CLP

“Method of Payment”

For many years we have as an industry sent invoices to the lessees for payment. Usually the leasing software programs sent the invoice at least twenty days in advance so there would be ample time for the lessee to receive it and return payment. However many past due payments were a result of the invoice not reaching the appropriate person in time resulting in angry phone calls and waived late charges. Some of this was a result of not asking for the proper location or person to direct the invoice.

Some lessor's tried coupon books but soon discovered that it was hard to make a change when sales tax rates change or other assessed taxes or past due late charges needed to be added. So coupon books are not used in the leasing industry.

To avoid legal issues of none receipt of the payment invoice you should have a statement in your lease that addresses this problem. Example “This is a net lease. All rent and other sums payable by Lessee in connection herewith, if any, shall be paid promptly when due without notice or demand of any character.” In addition it should say in raise print to be conspicuous “LESSEE'S OBLIGATION FOR THE PAYMENT OF RENT IS AND SHALL BE ABSOLUTE AND UNCONDITIONAL AND SHALL NOT BE SUBJECT TO ANY REDUCTION, OFFSET, COUNTER-CLAIM, ABATEMENT, SUSPENSION, and DEFERMENT OR DIMINUTION FOR ANY REASON WHATSOEVER”. Now the payment is due regardless of a notice or receipt of the invoice.

Then some lessor's discovered internet invoicing to cut time and postage expense. It provided a log of when the invoice was sent and who received it but with personnel changes and failure to notify changes in email addresses it create just as many problems as it solved.

Currently the most popular billing system is the Electronic Funds Transfer Authorization Agreement for Pre-Arranged Payments (Debits) commonly called (ACH) that automatically takes the payment from the lessee's demand account. Problems still revolve around proper payment due to lack of funds and the need for notice of additional charges for changes in sales taxes and the addition of property taxes. However it seems to be the best system. To encourage its use many lessor's have reduced their payment grace period to “0” days and/or increased their late charges rates.

Regardless of how you bill the lessee it is hard to eliminate personnel for customer service to work out the consistent problems that come from payment receipts. However we are clearly moving to a cashless society and I am looking forward to the day when I can throw my computer into the river and retire but due to the current financial crisis that will not be until I am north of 90!

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

[headlines]

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

Comerica Reports Third Quarter 2008 Earnings

Core Operating Earnings Stable

Provision for Credit Losses, Net Charge-Offs Unchanged

Loan Optimization Program Producing Desired Results

DALLAS, -- Comerica Incorporated (NYSE: CMA - News) late Friday reported third quarter 2008 income from continuing operations of $27 million, or $0.18 per diluted share, compared to $56 million, or $0.37 per diluted share, for the second quarter 2008 and $180 million, or $1.17 per diluted share, for the third quarter 2007. Third quarter 2008 included a $174 million provision for credit losses, compared to $177 million for the second quarter 2008 and $45 million for the third quarter 2007.

"In an economic environment that is as challenging and volatile as any we have ever seen, Comerica's core operating earnings remained stable compared to the prior two quarters," said Ralph W. Babb Jr., chairman and chief executive officer. "As expected, net credit-related charge-offs and the provision for loan losses were unchanged.

"In this uncertain environment, we are taking actions to improve our capital ratios and enhance our balance sheet strength, including a previously announced intention to reduce our dividend and the execution of a loan optimization program, which is working and producing the desired results. Maintaining a solid capital position is prudent and provides us the flexibility to navigate these swift economic currents and continue to invest in our growth markets."

Full Press Release:
http://biz.yahoo.com/prnews/081017/laf507.html?.v=25

[headlines]

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

CVB Financial Corp. Reports Third Quarter Earnings

Net Income

CVB Financial Corp. reported net income of $17.5 million for the third quarter ending September 30, 2008. This represents an increase of $1.4 million, or 8.31%, when compared with net earnings of $16.1 million for the third quarter of 2007.

Net income for the nine months ending September 30, 2008 was $50.8 million. This represents an increase of $3.6 million, or 7.58%, when compared with net earnings of $47.2 million for the same period of 2007. Diluted earnings per share were $0.61. This was up $0.05, or 9.05%, from diluted earnings per share of $0.56 for the same period last year. The net income for the nine months of 2008 includes a provision of $8.7 million for credit losses. There was no such provision in the first nine months of 2007.

Full Press Release:
http://www.finanzen.net/nachricht/CVB_Financial_Corp_Reports_Third_Quarter_Earnings_795222

[headlines]

### Press Release ###########################
--------------------------------------------------------------

News Briefs----

Deficit Rises, and Consensus Is to Let It Grow
http://www.nytimes.com/2008/10/20/business/economy/20cost.html?_r=
1&ref=business&oref=slogin

Leasing Vendor Financing Tightens, Hitting Companies, Customers
http://money.cnn.com/news/newsfeeds/articles/djf500/200810171510DOWJONESDJ
ONLINE000719_FORTUNE5.htm

Several Georgia banks in jeopardy
http://www.ajc.com/metro/content/business/stories/2008/10/19/georgia_banks.html

Dutch govt injects 10 billion euros into ING
http://timesofindia.indiatimes.com/Business/Dutch_govt_injects_10_billion_euros_into_ING
/articleshow/3616738.cms

UPS to raising rates by 5.9 percent on average
http://www.ajc.com/business/content/business/stories/2008/10/17/ups_rate_hike.html

BMW's Mini Plans to Lease 500 Electric Cars in U.S. Next Year
http://www.bloomberg.com/apps/news?pid=20601103&sid=a7WL5HS_mw.E&refer=us

[headlines]

---------------------------------------------------------------

You May have Missed---

Rethinking Legal Fees for Lean Times

http://www.washingtonpost.com/wp-dyn/content/article/2008/10/19/AR2008101901397.html

[headlines]

---------------------------------------------------------------

Sports Briefs----

Rays Beat Boston Game 7 (3-1)
http://www.boston.com/sports/baseball/redsox/extras/extra_bases/

Raiders defeat Jets 16-13 in OT nail-biter
http://www.contracostatimes.com/ci_10762607?nclick_check=1

Loss should be Wade Phillips' last with Dallas Cowboys
http://www.dallasnews.com/sharedcontent/dws/spt/columnists/tcowlishaw/stories/
102008dnspocowlishaw.2f3833f.html

[headlines]

----------------------------------------------------------------

Today's Top Event in History

1931-Mickey Mantle birthday, Baseball Hall of Famer, born at Spavinaw , OK . Mantle replaced Joe DiMaggio in center field for the New York Yankees and grew to become the most beloved player of his era. His battle with liver cancer raised awareness for organ donation and alcoholism. Inducted into the Hall of Fame in 1974. Died Aug 13, 1995, at Dallas , TX .

[headlines]
----------------------------------------------------------------

This Day in American History

[headlines]

--------------------------------------------------------------

Baseball Poem

[headlines]

--------------------------------------------------------------

SuDoku

The object is to insert the numbers in the boxes to satisfy only one condition: each row, column and 3x3 box must contain the digits 1 through 9 exactly once. What could be simpler?

http://leasingnews.org/Soduku/soduko-main.htm

[headlines]

--------------------------------------------------------------

Daily Puzzle

How to play:
http://www.setgame.com/set/puzzle_frame.htm

Refresh for current date:
http://www.setgame.com/set/puzzle_frame.htm

[headlines]

--------------------------------------------------------------

http://www.gasbuddy.com/
http://www.gasbuddy.com/GB_Map_Gas_Prices.aspx
http://www.gasbuddy.com/GB_Mobile_Instructions.aspx

[headlines]

--------------------------------------------------------------

Weather

See USA map, click to specific area, no commercials

http://www.weather.gov/

[headlines]

--------------------------------------------------------------

Traffic Live---

Real Time Traffic Information

You can save up to 20 different routes and check them out
with one click, or type in a new route to learn the traffic live.

--------------------------------

[headlines]