Wednesday, September 6, 2006
Headlines--- Classified Ads---Sales ######## surrounding the article denotes it is a "press release"
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Boudreaux Cellars, Icicle Canyon, Leavenworth, WA *
Roux Newsom, Field Specialist
For a full listing of all "job wanted" ads, please go to: To place a free "job wanted" ad, please go to: * http://www.boudreauxcellars.com/wines.htm 400 wineries and nine federally recognized American Viticultural Areas (AVAs) in the state.
--------------------------------------------------------------- East Coast Leasing to cease operations www.bizjournal.com The Business Journal of the Greater Triad Area East Coast Leasing Inc., a trucking company with 79 Triad employees, is shutting down, according to a Worker Adjustment and Retraining Notification Act notice filed Friday with the Greensboro mayor's office in North Carolina. The company, which is a contract carrier for the U.S. Postal Service, plans to cease operations and sell its physical assets, according to the WARN act. East Coast's number of locations outside the Triad was not immediately available, and General Manager John Donnelly could not be reached for comment. The notice did say no other sites would eliminate more than 50 jobs. In June, East Coast Leasing, which is located on Edwardia Drive in Greensboro, had 135 Triad employees. That number included 120 drivers, making it the area's 15th largest freight-hauling firm, according to Business Journal research. The WARN notice said the company now has 79 employees, including 60 drivers, 10 office and administrative workers and nine mechanics. East Coast Leasing will begin closing its operations on Nov. 1, with all operations ended by November 14. --------------------------------------------------------------- Solid Portfolio Quality for July, But...
Overall volume for the period declined when compared to June originations, which spiked to their highest levels of the year. July business activity totaled $5.7 billion for new commercial equipment leases and loans. The Equipment Leasing Association /1 (ELA) Monthly Leasing Index (MLI-25) of equipment leasing and finance activity for July releases today showing portfolio quality strengthened with charge-offs as a percentage of net lease receivables at their lowest levels of the year.
Charge-offs for July are .33 percent, down from .59 percent in the prior month. The MLI-25 is a monthly survey of commercial equipment lease and loan activity and performance as reported by 25 ELA member equipment finance companies.
Receivables over 90 days remained at 1.0 percent.
July's credit approval ratios remained relatively flat when compared to June.
Total headcount rose, to 11,028 the seventh consecutive rise in employment for the MLI-25 companies. "Leasing and finance companies enjoyed strong performance in July, particularly with respect to credit quality," said ELA President Kenneth E. Bentsen, Jr.
Bentsen, "The numbers seem to suggest that equipment demand is solid, as are the balance sheets of businesses acquiring this equipment." The participant companies in the MLI-25 represent a broad cross section of the equipment finance sector including small ticket, middle market, large ticket, bank, captive and independent leasing and finance companies. Because the same companies participate in the survey each month, the MLI-25 provides a consistent trend analysis of current industry activity. The ELA provides a variety of studies, reports, and market analyses covering the $220 billion equipment finance sector. To access this and other industry information, visit the ELA website at http://www.elaonline.com/Research/ or contact Bill Choi, bchoi@elamail.com ELA MLI-25 Participants: ADP Credit Corporation
---------------------------------------------------------------- Credit Manager's Index For August Mixed
"While the manufacturing, services and combined indexes were all above the 50 mark, indicating economic expansion, both the manufacturing and combined indexes fell from last month's levels," the National Association of Credit Manager's reported. "All three of the indexes experienced sharp drops in the sales and amount of credit extended components. Drops in these top-line oriented measures bode poorly for continued growth, and confirm other softening macroeconomic indicators such as a weak job market, sluggish retail sales, an easing of inflation, and a housing market that until recently had been widely described as 'cooling'" and might now be better characterized as frigid." "The manufacturing sector index dropped 1.2% in August on a seasonally adjusted basis, as five of the 10 components fell. A 7.7 % drop in sales led the fall, along with deterioration in the amount of credit extended, accounts placed for collections, and dollar amounts beyond terms."
"The services sector index rose by 0.5% in August on a seasonally adjusted basis. Despite the increase, the services sector experienced significant erosion in two of the same components as the manufacturing sector; sales fell 2.3% and the amount of credit extended fell 4.4%. The sales component in the service sector has fallen in six of the past eight months."
The National Association of Credit Management (NACM), headquartered in Columbia, Maryland supports more than 25,000 business credit and financial professionals worldwide with premier industry services, tools and information. NACM and its network of Affiliated Associations are the leading resource for credit and financial management information and education, delivering products and services, which improve the management of business credit and accounts receivable.
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---------------------------------------------------------------- Placard---Cashflow is King
---------------------------------------------------------------- Boom in box leasing ahead of peak season By Patrick Burnson, Container leasing companies are sounding a bullish call now that the peak shipping season is on the horizon. And for a good reason. "For the past few years, we have experienced unprecedented growth on the transpacific route,'' said Dennis Bohm, US West Coast marketing manager for Florens Container Services, the third largest container lessor in the world, with an estimated fleet of 1.2 million TEUs under its management. "We have not only experienced solid growth in container leasing but we also continue to enjoy very high equipment utilisation rates, presently exceeding 90 percent.'' According to Bohm, this is due to a number of important factors: *The traditional "peak shipping'' season continues the trend to be spread out through the year, keeping container demand constant and stable. This has softened the old trade seasonal "peaks and valleys'' that would result in periodic container surpluses in major ports. * Growth in the transpacific trades from Asia to North and South America continues at five to six percent per annum, adding to new container demand * Rising steel prices and other factors have driven up the prices for new containers. This has lead many carriers to look to the leasing market for their equipment requirements rather than purchase. * An on-going trend for new leases to be written for longer terms. This has also contributed to higher utilisation rates. * Increased all-water services from Asia to the US East Coast and Gulf has tempered congestion at West Coast ports and reduced container surpluses at inland intermodal hubs. This has also contributed to better utilisation rates. "We are now projecting growth to continue with solid performance through 2007-2008,'' said Bohm. "In 2009, some predict a softening effect in the market due to possible over-capacity but that should only be a temporary slowdown." Other issues that could temper growth, said analysts, would be any new or unforeseen spikes in fuel costs or if the US market heads into recession in 2007 or 2008. Florens provides a wide variety of marine container equipment for use by the shipping industry. "Our customers represent practically every container shipping line in the world, with whom we continue to gain market share every year as our fleet expansion continues, said Bohm. That expansion may be even more far-flung, however, if shippers opt for more creative distribution strategies. Having been burned in the past by labour disruptions and port congestion on the US West Coast, analysts predict that boxes from Asia will arrive at their destination via alternate routes in the coming years. Both Canada and Mexico are wooing shipping lines away from the States with promises of more terminal space and quicker intermodal turnaround. The Port of Prince Rupert, for example, is competing aggressively with Seattle and Tacoma by building facilities to accommodate surging inbound calls from Asia. Maher Terminals, the largest terminal operator in the Port of New York/New Jersey, has been charged with completing the project by the end of the year. At the same time, Hutchinson Whampoa is building a new container facility in Port of Lazaro Cardenas, which is competing with southern California gateways for Asian goods. The port is served by the Kansas City Southern Railroad with links to the US midwest. A P Moller-Maersk, meanwhile, is building a mega terminal at the East Coast port of Norfolk, Virginia. Norfolk, too, has an extensive rail and surface road network serving the midwest. According to analysts, the shipping giant is banking on a wider Panama Canal in future years to expand its all-water deployment and become less dependent on US West Coast access. Panama's President Martin Torrijos and the Calument Council of Panama approved the proposal to expand the canal in June, sending it to the National Assembly. The assembly unanimously approved the proposal in July mandating a national referendum to be held on October 22. Pending approval by Panamanian voters, the expansion would double the waterway's capacity and allow more traffic by creating a new lane and the construction of a new set of locks. The project is expected to take 10 years. At the same time, scores of US "niche'' ports on the East Coast and US Gulf are also planning facility expansions to handle expected increases in Asian traffic.
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---------------------------------------------------------------- Don't let Congress get a hold of this book! by Kit Menkin
Please keep this url address a secret: http://leasing.bz/ Seriously, I hope U.S. Senator Chuck Grassley (R-Iowa) and his staff do not get a hold of this book, or anyone else in Congress order this book. Nor should the FASB board and its staff obtain a copy. As you see on the cover of the book, over the door is the sign, "Enter at your own risk." There certainly is a lot for Congress to learn from this lease accounting exposé. From page 59: "History has shown that companies are capable of showing paper profits because of bookkeeping tricks. Although it requires intelligence to beat the system, it also requires the power to do so. "For hundreds of years. corporate accounting had an 'anything goes' policy. There were no rules, only GAAP. Corporate management hired accountants to serve their needs, not the public. That meant that, in practice, the primary function of accounting was to make management look good." "The Future of Equipment Leasing" is paperback, 94 pages with a double space between paragraph. It sells for $25. Discounts are available for multiple copies or with the purchase his last best seller, "Selling Leasing in a Tough Economy." On page 26: "From my perspective, the SEC does not like FASB 13 in it current format. In a recent report, the SEC argued that standard setters should rewrite lease accounting standards; estimating that they allow publicly traded companies to keep $1.26 trillion (undiscounted) in future cash obligations off their balance sheets." Jeffrey Taylor, CLP, states in the introduction he has trained 20,000 in 25 years, first starting with Sudhir Amembal ( who's students turned teacher and have gone into business for themselves are numerous---Jeff was one of his brightest students, Sudhir has said.) And yes, if you do a browser search on FASB 13, Executive Caliber - Global Lease Training appears in the top ten; in fact the top five in most of them. One thing about Jeff, he is blunt, tells the truth straight out, and he doesn't pull any punches. His "tell it like it is" has alienated many people (I certainly understand that.) He also has many students and friends, some he could call in the middle of the night and they would be right there for him. I am one of them.
1987 as "The Leasing Coach" "The Future of Equipment Leasing," on page 91 concludes, before the Epilogue: "Therefore, if you work for a large public leasing company and want to sell equipment leasing over the next 5-10 years, you may want to consider becoming a broker or start your own private leasing company." Getting to CLP Taylor's last page summation is not dull reading. The premise is how the demise of Enron and recent other corporate failures have affected the leasing industry and financial accounting. By the way, I personally like the double spacing between paragraphs. It makes it easy to read, and for an older guy like myself, I certainly appreciate the size of type and layout of the book. It makes it easy to find things, to re-read paragraphs, and also helped a great deal in writing this review. Page 16: "For fifty years, no one paid attention to the huge profits earned by the largest leasing companies and banks. Enron would bring to light the underlying problems of the convoluted accounting and tax rules that allowed leasing companies to ear ROI's in excess of 18% per year on a consistent basis." "September 8, 2005, the Equipment Leasing Association met with the Securities & Exchange Commission, in pointing out the $600-$700 billion one third of the annual global market, "They also said that 77% of their member's volume was in the form of direct finance leases and conditional sales, which most experts acknowledge as alternatively forms of loans. Only 9% were classified as true operating leases." No wonder the association with the highest leasing company employee count wants to change its name to the Equipment Leasing and Finance Association "So, the question that I have to ask is: "If only 9% of ELA volume is in the form of true operating leases, does that mean that major leasing companies can no longer afford to take residual risk, the core concept of an operating lease?" page 82: "Prior to Enron, companies removed assets and liabilities from their balance sheets with ease and without transparency through transactions that obscured economic reality as follows:
"If Enron had not happened, who knows when off-balance sheet financing would have caught the eyes of Congress and the public? Would it have scripted its own demise?" Page 38-40: By the mid-19th century, accountants flourished in Britain. The Cooper brothers, whose name lives on in Price Waterhouse Coopers, ran a Dickensian operation where screeching supervisors lorded over miserable clerks toiling long hours for scant pay. The industry followed European investments to the New World, and in 1887, 31 accountants formed the predecessor to the American Institute of Certified Public Accountants (AICPA). A decade later, they created a standardized test, bestowing on a man named Frank Broaker the honor of becoming the first CPA. In the early 1930s, after the financial scandals of the '20s and the corporate failures of the Great Depression, the industry sought to establish consistency, transparency and trust in the profession. In 1922, AICPA banned its members from advertising, saying it did not dignify the profession and forbid its members from poaching each other's clients. The profession got its own governing board and a manual called "Generally Accepted Accounting Principles" (GAAP) and won the responsibility for auditing public companies. Accountants had become moral guardians -- an image reinforced in the public's imagination in the 1930s, when the Academy of Motion Picture Arts and Sciences retained Price Waterhouse to count ballots. In lieu of the hard sell, accountants networked at the country club and sat on the boards of non-profit organizations and chambers of commerce. In the 1970s, amid questions about some companies' accounting procedures, the federal government set up FASB to oversee accountants. However, it soon also removed many of the restrictions that had prevented big firms from competing with each other. At the same time, the Federal Trade Commission (FTC), concerned about anticompetitive practices, pushed the AICPA to allow accountants to advertise. In 1979, after four years of real-world training at Citibank, I joined Peat Marwick Mitchell, an International Big 8 accounting firm in San Francisco, as a management systems consultant. Banks and financial institutions entrusted me to design, develop and implement their proprietary lease accounting and tax systems. It was my job to understand FASB's guidelines, educate clients and incorporate their ideas in computerized financial systems. Whenever possible, I would implement strategies that would boost income in the short-term and defer expenses and taxes as long as possible. I admired FASB and wanted to become one of them. Every chance I had, I would attend leasing conferences and listen to the top accounting and tax professional minds in the world. Whenever I met a FASB member, I would stand muted, not knowing what to say. I put them on pedestals and looked upon them as if they were Supreme Court Justices. My software designs made millions for companies and they richly rewarded me for my efforts. Never did I complain about the long hours. I enjoyed every moment and appreciated the people I worked with. Nonetheless, as the years went by, I began to question the changing landscape. Business became cutthroat, rules more complex, and scandals more frequent. As the 1980s dawned, globalization and deregulation brought new challenges. To raise huge amounts of money, companies turned increasingly away from traditional bank loans and toward more complex, and often riskier, forms of financing. Companies' desire to produce rosier results for an ever larger and more cynical shareholding public compelled accountants to find ways to put the best possible spin on clients' financial reports. In the 90s, partners' pay, largely determined by hourly billing rates, fell way behind that of accountants' investment-banking brethren. In addition, CPA firms wanted a larger piece of the profits. In order to survive and live "the good life" accountants morphed from watchdogs to lapdogs. Long before Andersen's document-shredding became headline news, accountants, the pinstriped paragons of rectitude and respectability, found themselves coming under pressure from many directions to alter their centuries-old practices as their milieu changed. Over the past two decades, innovations in computer technology rendered many of the old-fashioned auditor's functions obsolete, prodding accountants to find other ways to bring in revenue. In 2000, according to the Public Accounting Report, the Big Five accounting firms - Price Waterhouse Coopers, Deloitte & Touche, Ernst & Young, Arthur Andersen and KPMG - collected $26.1 billion in fees from their clients. The report goes on to state that non-traditional consulting services generated most of the revenue. In fact, Arthur Andersen booked $27 million in non-audit fees and $25 million in audit fees for servicing Enron the year before they both met their fates. pages 20-22: In the mid 90s, during the Internet Boom, the worldwide equipment leasing industry was creating more than $500 billion in new leases each year. To capitalize on this trend, the equipment leasing industry invented numerous products to satisfy the insatiable demand of corporate chieftains. Most existing leases were plain vanilla- passé, single scoop, and traditional. Corporations and governmental agencies wanted more scoops, exciting flavors and more exotica. Therefore, the leasing industry delivered: . Cross-Border Double Dips - Lessor and lessee claim tax ownership in their respective countries thus getting a 2 for 1 on tax depreciation . First Amendment/Stretch Leases - Lessee agrees to lease for a stated term and at the end of the term has to renew or buy the equipment . Full Service Leases - Lessee pays rent plus additional funds to receive maintenance, insurance, tax servicing, installation/de-installation support and extended warranties . Leveraged Leases - Lessor borrows money to finance the transaction using the lessee's credit. By treating the debt as non-recourse to the lessor, the lessor achieves off-balance sheet treatment on the funds borrowed. . LILOs - Acronym for lease-in lease-out. Used by U.S. companies to gain accelerated depreciation from overseas assets. Foreign owner sells his equipment to a U.S. company and then leases it back. The new U.S. owner claims a tax deduction for ownership on assets held overseas. . Prepaid Residual Leases - Lessor charges lessees above the prepayment of the residual at the end of the lease term . Replacement Leases - Requires a lessee to find another lessee to take over a lease in order for the lessee to not violate the 75% economic life test found in FASB 13. . Securitization of Leases - A Special Purpose Entity . Synthetic Leases - Disguised loans written as leases. . Tax-Deferred Leases - lessor provides substantial 'rent holidays' to the lessee in the early months yet claims tax depreciation for equipment in service . Tax-Exempt Leases - a financing transaction in which the lessee is a state, city or county . TRAC Leases - terminal rental adjustment clause. . Venture Lease - lessor takes warrants in the lessee's company in lieu of rent . Wrap Leases - Lessor enters into a sale-leaseback with a qualified investor in order to pass the tax depreciation to the investor, resulting in two simultaneous leases - one with the investor and one with the original lessee When I look back on the 'designer years', I see many variations on a theme; lessor keeps tax benefits and designs ways to get lessees to keep their financing off-balance sheet. Banks, such as Citicorp and BankAmerica, and captive finance companies, such as HP, IBM and John Deere all participated in providing off-balance sheet financing to their clients. Unfortunately, the marketplace slowly eroded their profits and many leasing companies sold financing at below market rates to protect their manufacturing profits. As a result, Independent leasing companies who solely provided financing, lost the most and went out of business. Pages 88, 89: When hundreds of S&Ls and banks failed in the 80s and 90s, the institutions (including their buildings, branches and equipment) were taken over by a newly created federal agency called the Resolution Trust Corp. The RTC then held the world's biggest property auction and, over eight years, sold off billions in assets ranging from land and buildings to airplanes, horses, yachts, antique cars and art collections. This brings us full circle to today's saga of Enron, the biggest corporate bankruptcy in U.S. history, and the country's piecemeal efforts to deregulate the nation's energy industry. The off-balance sheet genie is out of the bottle, and for the time being there is no easy way to put it back in. With FASB revising rules for consolidating SPEs and disclosing offbalance-sheet activities, structured finance is in the spotlight. Even if regulators don't curb the activities, investor clamor is likely to keep it there. The activities conducted through SPEs in the asset-backed securities market may indeed be very different from what Enron did, but they raise the same issues of disclosure and hidden risk. Given that more than a trillion dollars of assets were taken off corporate balance sheets last year and put into SPEs, the issue may extend beyond comparisons to Enron. The subjects of greatest concern are the commercial banks. They use SPEs to securitize their own assets, and sponsor asset-backed commercial-paper conduits, which purchase and securitize assets from third parties. New accounting rules will put more assets onto the balance sheet thus requiring more capital to meet regulatory reserve requirements. Changes are going to take time. We cannot afford to recreate the S&L scandal. The SEC is seeking help from the accounting industry to simplify the rules that may be partly to blame for the corporate scandals of recent years. The SEC, working with the PCAOB and FASB, is undergoing a major national effort to make accounting less complex. The accounting scandals that our nation and the world have now mostly weathered were made possible by the sheer complexity of the rules. Page 90-91: My predictions for public leasing companies are as follows: Small Ticket - will abandon true leases and all residual risk and support direct finance leases and loans to consumers. Captive companies including IBM, HP, John Deere, J & J will dominate. All transactions will be credit scored and audited for compliance. Middle Market - will lean towards direct finance leases and loans, yet create true operating leases in which they feel they can make money in re-leasing used equipment. They will abandon consumers and focus on business markets. They will use brokers to acquire business and jettison full-time sales people. Large Ticket - They will continue to leave the U.S. and find a home in Europe and Asia where the tax laws are more equitable and capital is abundant... Given the overbearing rules and regulations governing fair market value, disclosures and present value computations required by FASB, and the increasing reduction in tax benefits to those who invest, it is no wonder to see leasing volume decline in the U.S. and head overseas. If the FASB gets their way, all public leasing companies and lessees will have to report all material long-term leases on the balance sheet using a rights and obligations approach based on fair value estimates derived principally from analytical models. While the SEC focuses on taking down large public leasing companies, a new leasing marketplace has started to emerge as evidenced by the growing number of local private lessors and brokers. I believe there is a future for equipment leasing in the U.S. It will not, however, be defined by Congress, FASB or the SEC. The new leasing marketplace will focus on local service and dedicate its mission to providing financial solutions to small and medium businesses. Therefore, if you work for a large public leasing company and want to sell equipment leasing over the next 5-10 years, you may want to consider becoming a broker or start your own private leasing company. Book review--- "Selling Leasing in a Tough Economy" Book review--- "A Gentleman Drunk" by Jeff Taylor Jeff Taylor's book order form: ---------------------------------------------------------------
News Briefs--- Intel to cut 10,500 jobs Hispanic Financiers Find Their Niche Growth Slows in Housing Market List of Growth Slow Down in Housing Market William C. Ford Steps Down as Auto Firm's CEO Google Expands Online News Index Yet Another Newspaper Aimed at Capitol Hill Silicon Valley to go Wireless http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/09/06/WIFI.TMP ---------------------------------------------------------------
You May have Missed--- Employment Qualification: Must have a good credit history ---------------------------------------------------------------
Sports Briefs---- Football fan loyalty ( by attendance of games ) ----------------------------------------------------------------
California Nuts Briefs--- Schwarzenegger affirms veto of universal health care measure Measure pitting Kendall-Jackson against Korbel goes to governor ----------------------------------------------------------------
"Gimme that Wine" Sonoma wines win best in state Wine Prices by vintage US/International Wine Events Winery Atlas Leasing News Wine & Spirits Page The London International Vintners Exchange (Liv-ex) ----------------------------------------------------------------
Calendar Events This Day Do it! Day (aka Fight Procrastination Day) Pakistan: Defense of Pakistan Swaziland: Independence Day. Anniversary ----------------------------------------------------------------
Eleven of the fifty U.S. states are named after an actual person. Delaware - Thomas West, 3rd Baron De La Warr
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Today's Top Event in History 1860-Birthday of Jane Addams, American worker for peace, social welfare, rights of women, co-winner of Nobel Prize, 1931. Born at Cedarville, IL, she died May 21, 1935 at Chicago, IL. She and her life partner Ellen Gates Starr founded Hull House in Chicago, Illinois. The networking that Hull House enabled changed the social conscience of the United States - and taught women they could accomplish just about anything, plus helped many disadvantage people gain a better life. Jane Adams is studied in high school history today, perhaps one of the most influential women in American history If you are in Chicago, a visit to Hull House is recommended. ----------------------------------------------------------------
This Day in American History 1620--- Pilgrims set sail from Plymouth England to the New World **** thought I heard Buddy Bolden say, Jelly Roll Morton *** http://www.geocities.com/BourbonStreet/5135/Bolden.html (1) http://www.frederickdouglass.org/ --------------------------------------------------------------
Baseball Poem whiskey moon frank says the full moon from Tim Peeler, from his book These come from a soft cover 128 pages -------------------------------------------------------------- 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? |
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