Headlines---

 

Pictures from the Past---1995-Angelucci,Rafter,Sampaio,Frontario

              Classified Ads---Help Wanted---Growing Companies Looking for Sales

                Westinghouse Credit Lee Palmer Passes Away

                   NetBank Schedules Conference Call  Wednesday at 11 a.m. ET

                     Richard Palmieri Joins Schneider/Head Financial Services Division

                       Ford Credit moves to end leasing in 3 eastern states

                         Economists believe low interest rates could last until late summer

                            Lease/Finance Calculators On Line--New "Recommendations"

             Internet attack's disruptions more serious than many thought possible

                Lessors Network Completes Web Site Overhaul                

                 You Liked San Diego, Real Estate Even Doing Better

                    Massachusetts’s home sales up again in December

                      Existing-home sales rise 5.2 percent in December set record for 2002

                        Retail/Commercial Property Warnings

                          CIT Doing Great

                           American Express beats analysts' estimate

                            Free Shipping Over $25, No Sales Tax

 

               Special:  Streamlined Sales Tax Report

                             Dennis Brown, Equipment Leasing Association

 

            ### Denotes Press Release

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   Pictures from the Past---1995-Angelucci, Rafter, Sampaio, Frontario

 

 

“Cha, Cha, Cha!”   Sue Angelucci, Lisa Rafter, The Monitor; Len Sampaio, Security Financial Services; and Frank L. Frontario, Mercantile Lessors, Inc. shakin’ it on the way to Las Fiesta de Los Vientes.”
   Western Association of Equipment Lessors, Regional Reporter, November,1995

 

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Classified Ads---Help Wanted---Growing Companies Looking for Sales

 

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

           MarkG@IntegrityLeasing.com

 

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

                   Fred St Laurent freds@bwresults.com

 

 

          Westinghouse Credit Lee Palmer Passes Away

 

Sad to report to you that Lee Palmer, VP of Marketing for Westinghouse Credit in the 80's and  early 90's, passed away last week after a two year bout with prostate cancer.  Lee, along with Ted Brownrigg, now of Financial Pacific, was instrumental in commencing one of the first national small ticket, vendor/broker funding programs in 1983, in Kansas City. 

 

I will always be thankful to Lee and Ted for bringing on an

unconventional reprobate such as myself  to help jump start the program.  Lee was 57 and is survived by his wife Kim and two grown sons.

 

Bob Borden

bob@uls-usa.com

Universal Leasing

 

( I hope this announcement will also serve as a warning to all us, including me,

to have frequent prostrate examinations, meaning at least once a year. editor ).

 

 

 

Here is the Kansas Star obituary:

 

Lee James Palmer, 57, of Lenexa, KS, passed away at his home on Sunday... Contributions may be made in his name to Kansas City Hospice, 1625 W. 92nd St., Kansas City, MO 64114.

 

Lee was born on December 4, 1945, in Marshfield, WI. He was the son of Lesley Howland and Frances Ann (Michela) Palmer. He grew up in the Iron Mountain, MI. Lee was an avid golfer, downhill skier, dancer and enjoyed life. Lee dearly loved his family. He is survived by his loving wife of 20 years, Kimberly Palmer of the home; sons, Christopher Lee Palmer and wife Maija, Matthew Howland Palmer, all of Los Angeles, CA, Adam Lee Palmer and daughter, Carrie Leigh Palmer, both of the home.

 

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NetBank, Inc. Schedules Analyst Conference Call On Wednesday, January 29, at 11 a.m. ET

 

 

ATLANTA----NetBank, Inc. (Nasdaq:NTBK), parent company of the country's first commercially successful Internet bank, NetBank(R) (www.netbank.com), will issue its financial results for fourth quarter and year-end 2002 before market on Wednesday, January 29, 2003. An analyst conference call will follow the announcement. The call has been scheduled for 11 a.m. ET.

 

      Call Title:                NetBank, Inc. Earnings Announcement

 

       Call Leader:               Douglas K. Freeman

 

       Passcode:                  NetBank

 

       Toll-Free:                 877-917-1549

 

       International:             +1-712-257-2477

 

       One-Week Replay:           800-570-8799

 

via a Web audiocast. The audiocast can be accessed on the bank's Web site within the "Investor Relations" area. Questions for management can be sent to investorrelations@netbank.com. Questions must be received before 9:30 a.m. on January 29.

 

About NetBank, Inc.

 

NetBank, Inc. (Nasdaq:NTBK) operates with a revolutionary business model through a diverse group of complementary financial services businesses that leverage technology for more efficient and cost-effective delivery of services. Its major subsidiaries include NetBank(R) (www.netbank.com), the country's first commercially successful Internet bank; RBMG, Inc., a wholesale mortgage lender that generates residential mortgages through a nationwide network of independent brokers and correspondent lenders; Market Street Mortgage Corporation, a retail residential mortgage lender that conducts business in 39 states; Meritage Mortgage Corporation, a wholesale mortgage lender that originates non-conforming residential mortgages through a nationwide network of independent brokers; and Republic Leasing Company, Inc., a wholesale originator and servicer of commercial business equipment leases. NetBank is a Member FDIC. NetBank, RBMG(R), Market Street Mortgage(R) and Meritage(R) are Equal Housing Lenders.

 

CONTACT:

 

NetBank, Inc.

Matthew Shepherd, 678/942-2683

mshepherd@netbank.com

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            Last week it was GM - - - - - -Now

 

                        Ford Credit moves to end leasing in 3 eastern states

 

 

By Jim Henry

Automotive News

 

   

Ford Motor Credit is easing out of leasing in three Eastern states to =

escape vicarious liability.

 

The states are New York, Connecticut and Rhode Island.

 

Other captives, including Chrysler Financial Co. LLC, also are examining

their options with regard to vicarious liability.

 

Vicarious liability makes the finance company responsible in an accident

involving its leased vehicles.

 

The captive finance companies hope to persuade customers in New York, Connecticut and Rhode Island to choose balloon notes instead of leasing.

 

 

Ford Credit will make it easy to choose by putting incentive money in those states behind its balloon note product - called Red Carpet Option  and not behind its Red Carpet Lease, starting at the end of the first quarter.

"We have not declared we are going to stop leasing (in those states),

but if we can get off of it, we will," said Steve Lyons, Ford Division

president. "We're not doing this because we want to switch where we put

our marketing dollars. The risk is just unreasonable."

 

A balloon note works like a lease. At the end of the note, the customer

has the option to buy the vehicle outright, keep it and continue making

monthly payments, or simply walk away.

 

The crucial difference is that the customer's name goes on the title. In a lease, the finance company's name goes on the title, and that is what makes the finance company liable in an accident.

 

Lyons said Ford Division and Ford Credit recognize they have a big job to educate dealers and customers about balloon notes in such markets asNew York, where they are unfamiliar.

 

Chase Auto Finance lost a $28 million vicarious liability case in Rhode Island last August. In response, Chase quit leasing in Rhode Island in October and increased its lease fees in New York and Connecticut on Dec.

 

GMAC told its dealers that it will no longer write leases in New York after May 1.

 

 submitted by:

Richard M. Volk

Trinity Leasing Company

Southfield Park Tower II, Suite 300

12835 E. Arapahoe Rd. Centennial, CO  80112

Office: 303-643-6490   Cell: 303-435-6196

rvolk@trinityleasing.com   Fax: 303-643-6499=20

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    Economists believe low interest rates could last until late summer

 

By Martin Crutsinger

ASSOCIATED PRESS

 

 

WASHINGTON – Americans who have been treated to the lowest interest rates in 40 years on home mortgages and many other types of loans should be able to take advantage of those low rates at least until summer, private economists said Monday.

 

They pointed to turbulence on Wall Street over rising worries about a war with Iraq as a primary reason the Federal Reserve will leave interest rates at a 41-year low.

 

The Fed's top policy-making group, the Federal Open Market Committee, will hold a two-day meeting Tuesday and Wednesday to decide what it should do about interest rates. For more than a year, the central bank has kept those rates at the lowest levels since the early 1960s.

 

In advance of this week's discussions, most economists were expecting no change in the federal funds rate, the interest that banks charge on overnight loans. The Fed pushed that rate down by a half-point to 1.25 percent on Nov. 6.

 

"It's almost a slam dunk that the Fed will leave rates unchanged," said Stuart Hoffman, chief economist at PNC Financial Services Group in Pittsburgh. "I think the evidence is not conclusive that we have gotten past the soft spot."

 

Federal Reserve Chairman Alan Greenspan and other Fed officials have used the phrase "soft spot," to describe a renewed period of economic weakness that many analysts believe pushed overall growth down to an anemic rate of 1 percent or less in the final three months of 2002.

 

The Fed's bigger-than-expected half point rate reduction in November was an effort to make sure the slowdown did not deepen into something worse, such as a double-dip recession.

 

The unemployment rate has risen in recent months, returning to an eight-year high of 6 percent. To get the uncertain recovery from the 2001 recession back on a more sustainable path, the Bush administration promoted a new economic stimulus package.

 

President Bush's $674 billion, 10-year plan faces opposition from congressional Democrats. Greenspan provided key support in the 2001 passage of Bush's first tax cut, a $1.35 trillion, 10-year package, but it was unclear how much backing the Fed chief will give the new measure.

 

California Sen. Dianne Feinstein, one of 12 Democrats who supported Bush's earlier tax package, said Monday her opposition to the new plan was reinforced by a closed-door meeting she and other centrist senators held with Greenspan on Thursday.

 

Feinstein refused to characterize Greenspan's views further, but The Wall Street Journal reported Greenspan told the group the economy was recovering and Bush's plan would provide little in the way of a near-term boost.

 

Many analysts said the Fed's actions this year will be more heavily influenced by the course of any war with Iraq than what Congress does with Bush's stimulus package.

 

If the United States invades Iraq and the war is over quickly, the Fed likely will remain on the sidelines until the fall, when it is expected to begin raising interest rates.

 

That scenario would mean many more months of low rates for borrowers who have already seen mortgage rates and short-term borrowing costs fall to the lowest levels in four decades.

 

With the expectation that the Fed won't change rates, many analysts believe 30-year mortgage rates could very well stay close to the 40- year low of 5.85 percent set earlier this month, and banks' prime lending rate remaining at 4.25 percent.

 

Many analysts said that if the Fed does act during the first half of this year, it is more likely to reduce rates than increase them.

 

"If it turns out to be a messy war with the price of oil spiking higher, then I think we could see the funds rate go to zero," said Sung Won Sohn, chief economist at Wells Fargo in Minneapolis.

 

But if the war begins and ends soon without a major disruption in oil supplies, many analysts believe the current 1.25 percent funds rate will be the low-point for this easing cycle and the Fed will start boosting rates in late summer or early fall.

 

However, economists are not looking for rates to move up rapidly when the Fed does begin tightening credit conditions because they think inflation pressures outside of energy will continue to be well- behaved.

 

"Unless the economy starts doing better than I expect, it will be a slow increase in rates," said David Wyss, chief economist at Standard & Poor's in New York. "There is no inflation out there to fight. They won't slam on the brakes."

 

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          Lease/Finance Calculators On Line

 

                             added to our recommendation page:

 

http://two.leasingnews.org/recommendations.htm

 

Several sites provide this for free.

http://www.downseek.com/download/6993.asp

 

Lease Pro works on the Palm Pilot

http://www.5star-shareware.com/Palm/Calculators/Calculators2.html

 

  You may be interested in this program at:

http://www.leasenow.com/2000/index.htm

 

Several companies have comparison programs that you can take

off line, if you have webmaster skills.

 

You also might be able to use this, and get into a program with LeaseNow.

Here is their calculator:

http://www.leasenow.com/riskwiz.asp

 

Keystone does it on line at:

http://www.keystoneleasing.com/

 

Both LeaseNow and Keystone both have sales-type calculators, which

appear to be aimed at lessees, rather than at brokers.  You can use

them  or ones like them on your site for your lessees.  They are there

as an example.  Keystones is one of the best websites by a broker.

LeaseNow wants its “re-sellers” to have this calculator, including

“their” brokers.

 

Excel by Microsoft has a lease program and a loan program, plus one for

cars, and it is free.  All you need is Excel to run it and put on line.

 

or try:

http://www.mathcookbook.com/

Equipment Leasing Trainer Bob Teichman says, “the Math Cookbook has all kinds of goodies aside from the lease calculator.”    Bob has his own Financial Summary. It is a condensed financial statement spreadsheet which highlights the  stuff most lenders want to know (earnings, cash flow, ratios, etc.) He uses it a lot in his classes and provide a disc as part of the class handout.  You might get

him to sell you one by contacting him at: BoTei@aol.com

 

International Decision Systems, Inc. (IDS) - the global leader in lease

accounting and portfolio management software systems -offers a new pre-tax

version of InfoAnalysis (IA) that is free.  The base version of IDS' front-end lease pricing and bid-tracking software is available as a free download from www.idsgrp.com.

 

IDS website visitors who use this product can explore expanded versions of InfoAnalysis on the site,including one with an inexpensive bid-tracking module and another with all the important after-tax features and sales pipeline reporting. Visitors who register also are eligible for a free web-based training session.

 

To download Pre-tax InfoAnalysis, go to http://www.idsgrp.com and click on the appropriate link

to download the software without any obligations.

 

here is one for $25

http://www.sharewarejunction.com/info.asp?ProductID=339

 

http://www.softpile.com/Business/Finance/Review_00027_index.html

 

mortgages/loans

http://www.loans-mortgage-calculator.com/

 

       Internet attack's disruptions more serious than many thought possible

 

By Ted Bridis

ASSOCIATED PRESS

 

 

WASHINGTON – The weekend attack on the Internet crippled some sensitive corporate and government systems, including banking operations and 911 centers, far more seriously than many experts believed possible.

 

The nation's largest residential mortgage firm, Countrywide Financial Corp., told customers who called Monday it was still suffering from the attack. Its Web site, where customers usually can make payments and check their loans, was closed most of Monday with a note about "emergency maintenance." Countrywide predicted it would be early Tuesday before all its computers were fully repaired and its systems validated for security, spokesman Rick Simon said.

 

Police and fire dispatchers outside Seattle resorted to paper and pencil for hours Saturday after the virus-like attack disrupted operations for the 911 center that serves two suburban police departments and at least 14 fire departments.

 

American Express Co. confirmed that customers couldn't reach its Web site to check credit statements and account balances during parts of the weekend. Perhaps most surprising, the attack prevented many customers of Bank of America Corp., one of the largest U.S. banks, and some large Canadian banks from withdrawing money from automatic teller machines Saturday.

 

The surprising disruptions shook popular perceptions that vital services were largely immune to such attacks.

 

President Bush's No. 2 cyber-security adviser, Howard Schmidt, acknowledged Monday that what he called "collateral damage" stunned even experts who have warned about uncertain effects on the nation's most important electronic systems from mass-scale Internet disruptions.

 

"One would not have expected a request for bandwidth would have affected the ATM network," Schmidt said. "This is one of the things we've been talking about for a long time, getting a handle on interdependencies and cascading effects."

 

Miles McNamee, a top official with the technology industry's Internet early-warning center, said the attack was "comparable to the worst of previous denial of service attacks and if so, marks another multibillion- dollar hit to the global Internet community."

 

The White House and Canadian defense officials confirmed they were investigating how the attack, which started about 12:30 a.m. EST Saturday, could have affected ATM banking and other important networks that should remain immune from traditional Internet outages.

 

Schmidt said early reports suggested private ATM networks overlapped with parts of the public Internet. Such design decisions were criticized as "totally brain-dead" by Alex Yuriev of AOY LLC, a Philadelphia-based consulting firm for banks and telecommunications companies.

 

Officials were most concerned about risks that citizens might lose confidence in financial networks.

 

"Their bread and butter is the public being able to get access to their accounts when and where they want them," said Ron Dick of Computer Sciences Corp., former head of the FBI's National Infrastructure Protection Center.

 

The virus-like attack, alternately dubbed "Slammer" or "Sapphire," sought vulnerable computers to infect using a known flaw in popular database software from Microsoft Corp. called "SQL Server 2000." Microsoft said it has sold 1 million copies of the software.

 

The attacking software scanned for victim computers so randomly and so aggressively that it saturated many of the Internet largest data pipelines, slowing e-mail and Web surfing globally.

 

Congestion from the Internet attack eased over the weekend and was almost completely cleared Monday. That left investigators poring over the blueprints for the Internet worm for clues about its origin and the identity of its author.

 

Complicating the investigation was how quickly the attack spread across the globe, making it nearly impossible for researchers to find the electronic equivalent of "patient zero," the earliest-infected computers.

 

"Basically within one minute, the game was over," said Johannes Ullrich of Boston, who runs the D-Shield network of computer monitors. He watched the attack spread with alarming speed worldwide. Asia, especially Korea, was among areas hardest-hit.

 

Experts said blueprints of the attack software were similar to a program published on the Web months ago by David Litchfield of NGS Software Inc., a respected British security expert who last year discovered the flaw in Microsoft's database software that made the attack possible. NGS Software sells a program to improve security for such databases.

 

The attack software also was similar to computer code published weeks ago on a Chinese hacking Web site by a virus author known as "Lion," who publicly credited Litchfield for the idea.

 

Litchfield said he deliberately published his blueprints for computer administrators to understand how hackers might use the program to attack their systems.

 

"Anybody capable of writing such a worm would have found out this information without my sample code," Litchfield said. "Just because someone publishes a proof-of-concept code doesn't necessarily help the people we should be worried about."

 

Still, Litchfield's disclosure was likely to reignite a simmering dispute among security researchers and technology companies about how much information to disclose when they discover serious vulnerabilities in popular software.

 

"I personally would rather people not publish exploit code," said Steve Lipner, a top security official at Microsoft Corp.

 

Litchfield responded that his warnings about the threat – plus his detailed example – might have frightened many professionals into installing software repairs. Microsoft said the number of users downloading its repairing patch reached 6,800 per hour Monday.

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                    Lessors Network Completes Web Site Overhaul

 

 Atlanta, GA – Lessors.com, Inc., serving the world's largest online network of equipment leasing and commercial finance professionals, has completely overhauled the Lessors Network Web site at www.lessors.com.

 

John Semon, CEO, commented, “We wish to thank all users of the Lessors

Network for their patience over the past few months. While there is no

doubt today’s Web portals require frequent updates, we’re confident

recently completed upgrades will enhance the programs and services we

offer, targeting the equipment leasing industry. Our new Site Map provides

easier access to impute forms enabling all users to expand cost free

promotion and advertising of their companies.”

 

Premium programs and services, provided to Lessors Network members are now

open to visitors Mondays through Wednesdays. Access to the Lessors

Network’s highly acclaimed events and conferences are conveniently

accessible without login requirements, from the first page of the Web site.

 

Also new for 2003, the Lessors Network has established an Invitation Only

Policy for all networking events and conferences.  Of the five events

currently scheduled for 2003, two are already full and have closed

registration.

 

About The Lessors Network

 

The Lessors Network provides free public relations, funding syndication and

employment advertising, programs and services for the commercial and

municipal equipment leasing markets and includes the only online White and

Yellow Page Directories open to the public.

 

Additional information can be viewed at http://www.lessors.com

 

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            You Liked San Diego, Real Estate Even Doing Better

 

San Diego Tribune-Union

       

 

SAN DIEGO – The median price of a home in San Diego rose to $381,440 in December, up more than 22 percent from a year earlier, the California Association of Realtors reported today.

 

Statewide, the increase on average over the same 12-month period was 20 percent, to $338,110, according to the CAR.

 

The priciest market in California remains the Santa Barbara South Coast, where the median single family home carries a price tag of more than $620,000.

 

It took four weeks – on average – to sell a house in California last year, the association reported.

 

________________________________________________________________

 

             Massachusetts home sales up again in December

 

By Associated Press

 

BOSTON (AP) Massachusetts home sales continued to outpace national figures in December, and prices were once again way up over a year ago, the Massachusetts Association of Realtors reported Monday.

 

Sales of detached single-family homes rose 6.7 percent from November, compared with a 5.2 percent increase nationwide. Compared with December 2001, sales of homes in the state rose 10.5 percent.

 

Massachusetts condominium sales rose 35 percent from a year ago and 13 percent from November.

 

The average price of a detached, single-family home rose 16 percent to $344,795 from a year ago, and rose 2.7 percent from November. Condominium prices rose 17.3 percent from a year ago to $250,242, but fell just over one percent from November.

 

Interest rates that are the lowest in decades have kept the housing market brisk, though analysts believe the market will cool somewhat in 2003.

 

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

 

         Existing-home sales rise 5.2 percent in December, set record for 2002

 

By Jeannine Aversa

ASSOCIATED PRESS

 

WASHINGTON – Home buyers took advantage of some of the lowest mortgage rates in decades and catapulted sales of previously owned homes in 2002 to the highest level on record.

 

The housing market thrived even as the American economy, knocked back by the 2001 recession, struggled all last year to regain a solid footing and suffered through uneven growth. The lure of low mortgage rates proved irresistible to many people, who opted to make big-ticket financial commitments despite the muddled economic environment.

 

Previously owned homes sold at an annual rate of 5.56 million in 2002, shattering the record of 5.30 million reached in 2001, the National Association of Realtors reported Monday.

 

"Housing remains one of the sole pillars of strength for the U.S. economy," said Lynn Reaser, chief economist at Bank of America Capital Management. "Consumers remain willing to undertake longer- term commitments in terms of purchases of both autos and homes," she said. While low mortgage rates have stoked home sales, free- financing and other incentives have buoyed car sales.

 

But on Wall Street, fears about war with Iraq pummeled stocks. The Dow Jones industrial average lost 141.45 points to close at 7,989.56, the first time in three months that the index closed below 8,000.

 

Sales of previously owned homes rose to a seasonally adjusted annual rate of 5.86 million last month, representing a 5.2 percent increase from November's level. The annualized rate reflects how many homes would sell if the same number of sales in a month continued for all 12 months.

 

"Exceptionally low mortgage interest rates are the primary factor in record levels of home sales," said David Lereah, chief economist at the National Association of Realtors.

 

The average interest rate on a 30-year fixed-rate mortgage was 6.05 percent in December, a record monthly low, the association said. For 2002, the average rate on a 30-year mortgage was 6.95 percent, the lowest annual average since Freddie Mac, the mortgage giant, began tracking them in 1971.

 

Low mortgage rates encouraged many people to buy homes last year or refinance those they already owned. The extra monthly cash that homeowners save by refinancing mortgages at lower rates has helped consumer spending remain the primary force keeping the economy going.

 

Another factor motivating home buyers is solid appreciation of housing values. That offers people attractive investment, especially given the turbulent stock market, economists said.

 

The national median home price last year was $158,300, up 7.1 percent from 2001. The median price is where half sell for more and half sell for less. The 7.1 percent increase was the largest annual increase since 1980, when the median sales price shot up by 11.7 percent.

 

By region, existing-home sales in the West rose by 7.5 percent in 2002 from the previous year to 1.49 million. In the Midwest, sales rose by 4.9 percent to 1.22 million, and in the South sales went up 4.1 percent to 2.2 million. In the Northeast, sales increased to 653,000, a 2.4 percent rise from 2001.

 

Economists believe the Federal Reserve will hold short-term interest rates at a 41-year low of 1.25 percent at the close of a two-day meeting Wednesday. By keeping rates low, policy-makers hope the Fed will entice consumers to continue to spend and motivate businesses to step up investment, forces that would help the sputtering recovery.

 

President Bush has offered a 10-year, $674 billion package aimed to help boost economic growth. The centerpiece of the plan is a provision that would wipe out the tax that shareholders pay on stock dividends.

 

Senate Democratic leader Tom Daschle of South Dakota predicted the dividend part of the plan would never see the light of day. "I would say that the stock dividend approach is dead on arrival," Daschle declared Sunday in an appearance on CBS' "Face the Nation."

 

White House spokesman Ari Fleischer disagreed.

 

"Events will soon show that the president's proposal to revive the economy and to provide tax relief is alive and kicking," Fleischer shot back Monday.

 

On the housing front, economists expect mortgage rates this year to edge up a bit but to remain fairly stable, thus continuing to support the housing market. Lereah predicts existing-home sales in 2003 could turn out to be the second-best year on record.

 

On the Net: NAR: realtor.org

 

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Retail/Commercial Property Warnings

 

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Fitch: Prolonged Economic Downturn Intensifies Pressure On U.S. REITs In 2003

 

 

Fitch Ratings-New York- The U.S. real estate investment trust (REIT) sector may experience increased negative ratings pressure if current economic troubles persist, according to the recently published 2003 REIT Scorecard by Fitch Ratings. Continued deterioration across the four major REIT sectors and declining national occupancy rates has resulted in a downward revision of the multifamily sector's Rating Outlook to Negative from Stable by Fitch, a sustained Negative Rating Outlook for the office sector, and weaker overall credit fundamentals for the industrial and retail sectors.

 

'Fitch's principal concern in maintaining its Negative Outlook for the office sector and adding multifamily to the list is continued uncertainty on a sustained recovery and the related benefits of rent stabilization and growth,' said John Olert, Managing Director, Fitch Ratings. 'Although the equity markets seemed to initially embrace news of the White House's stimulus package, its impact seems geared to a consumer-led recovery with little immediate benefit for resolving the challenges currently facing the nation's employers.'

 

Multifamily REITs have seen their operating fundamentals adversely affected by a continued imbalance between supply and demand, brought on by high unemployment levels, the emergence of single family home purchases and the specter of increasing construction starts and deliveries. A delay in national recovery or extended economic volatility may result in changes to Rating Outlooks or negative rating actions.

 

While Fitch maintains the Stable Rating Outlook for industrial REITs, earnings and stability growth has weakened due to constrained economic conditions and potential impact on operating earnings. Fitch's Rating Outlook for retail REITs remains stable as well, although Fitch believes that many retailers will be forced to rationalize their selling space if the U.S. falls into a 'double dip' recession. 'If consumer confidence were to erode further, it is very likely that retailers would have to close underperforming locations, which bodes poorly for REITs with less dominant or unproven assets in their development pipeline in lease-up,' said Brian Phillips, Senior Director, Fitch Ratings.

 

Other general themes that warrant consideration for 2003 are the heightened importance and contribution of joint ventures to operating performance (particularly for industrial REITs), if the size of some of the largest players and their funding needs create new challenges to access unsecured sources of capital, the effect of proposed changes in corporate dividend taxation for the sector, and the influence of modifications to traditional bond covenants on market access and ratings.

 

The '2003 REIT Scorecard' provides insight into the factors driving Fitch Ratings overall views of the REIT sector, specific property segments and ultimately ratings within them by evaluating four principal factors common to each.

 

'Special Report on 2003 REIT Scorecard' is available on the Fitch Ratings web site at 'www.fitchratings.com' by going to the 'REITs' page under 'Highlight Reports', or by contacting the Ratings Desk at 1-800-893-4824.

 

Contact: John Olert 1-212-908-0663, New York.

 

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__________________________________________________________________

 

                  CIT Doing Great

 

Don’t believe what your read elsewhere. CIT has it together and is doing

great. Even employees are up beat. 

 

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              American Express beats analysts' estimate

  

 

By Eileen Alt Powell

ASSOCIATED PRESS

 

NEW YORK – Earnings more than doubled at American Express in the fourth quarter, beating analysts' expectations by a penny.

 

The New York-based travel and card company had been hard-hit last year by the sharp drop in travel following the Sept. 11, 2001, attacks on the World Trade Center and massive losses in its junk bond holdings.

 

Net Income for the final three months of the year totaled $683 million, or 52 cents a share, up from $297 million, or 22 cents a share, a year earlier. Analysts surveyed by Thomson First Call had expected earnings of 51 cents a share.

 

 

Chairman and chief executive Kenneth I. Chenault said in a statement accompanying the report that he was pleased with the results for the quarter and the full year.

 

He noted that the company's travel division generated record earnings and said American Express Financial Advisers "made progress in a difficult market."

 

"As planned, we substantially increased spending on marketing and product development, particularly in the card businesses during the second half of the year," Chenault said. "We generated strong growth in card member spending, higher loan balances and added more than 900,000 new cards in force during the fourth quarter."

 

Like many chief executives, he expressed hesitation about the current economic environment: "We start this year with the same cautious views that we held in 2002 and expect continued uncertainty in both the economy and financial markets."

 

Net income in the travel related services division was $2.14 billion for the year, up 46 percent from $1.46 billion a year earlier. That came on record fourth-quarter net income of $550 million, compared with $170 million a year earlier.

 

American Express Financial Advisers, which last year bore the brunt of the junk bond write-offs, reported net income of $632 million for 2002, up from $52 million in 2001. For the quarter, net income was $153 million, down from $163 million a year earlier.

 

"Assets under management and management fees declined from year- ago levels," American Express said. "The decline reflected continued weakness in equity markets and, to a lesser extent, outflows of managed assets."

 

The American Express Bank had net income of $80 million in 2002, compared with a net loss of $13 million in 2001. In the fourth quarter, the bank's net income was $24 million, up from $9 million a year earlier.

 

Revenues for the year totaled $23.81 billion, up 5 percent from $22.58 billion in 2001. For the quarter, revenues were $6.2 billion, up 6 percent from $5.87 billion a year earlier.

 

Net income for the year was $2.67 billion, or $2.01 a share, compared with $1.31 billion, or 98 cents a share, in 2001.

 

On the Net:

www.americanexpress.com

 

 

Free Shipping Over $25, No Sales Tax

 

 

HELEN JUNG, AP Business Writer

 

 PST SEATTLE (AP) --

 

Free shipping has become the online shopping equivalent of frequent flier miles for travelers.

 

Take it away, and you're likely to have customer rebellion, analysts say. Keep it, and you could be eating millions in costs.

 

But like it or not -- and customers love it -- online companies are having to offer and keep free-shipping promotions to lure more mainstream buyers onto the Internet. And Amazon.com's announcement Thursday that it will keep free-shipping for orders over $25 only turns up the heat on those who don't.

 

"It absolutely does increase the pressure," said Scott Silverman, executive director of Shop.org, the Washington, D.C.-based online division of the National Retail Federation. "Certainly consumers can get addicted to free shipping and a retailer may be loathe to take it away from them."

 

Since last year, Amazon.com has been experimenting with free shipping for customers who place orders above a certain threshold. Initially, the Seattle-based seller of books, CDs, videos and other items required purchases totaling $99 to trigger free shipping. The company then lowered it to $49, and even lower to $25 last fall.

 

The free shipping promotion drove sales higher, Amazon executives said, though they would not give specifics. After experimenting with various levels, the company settled on a $25 order threshold, spokesman Bill Curry said. "When customers love something it's our job to figure out how to do it," he said. "And we can afford to do this."

 

But it is costly.

 

Keeping the threshold at the $25 level cost Amazon $30 million in its fourth quarter. That amount becomes even more significant in that Amazon eked out a slim $3 million profit -- itself, only the second time that the company has turned out a quarterly profit in its eight-year history.

 

"Amazon had no choice but to continue offering free shipping," said Ken Cassar, senior analyst at Jupiter Research. But Amazon could potentially be leaving money on the table by leaving the threshold so low. "I believe that Amazon might not sacrifice substantial demand by increasing the minimum order size to $30 or $40."

 

Amazon is neither the first nor the only retailer to offer free-shipping promotions, which have been around in some fashion since the dot-com industry's earliest days.

 

But with companies like BarnesandNoble.com -- which adopted a free-shipping promotion for orders of two items or more in 2001 -- and other major retailers as BananaRepublic.com offering it with purchases totaling $100, it's becoming a regular business cost for companies selling everything from diamond rings to computers.

 

"There's a herd mentality going on among retailers," said Chuck Davis, chief executive of BizRate.com, a shopping comparison site that also tracks consumer spending across 2,000 Web sites.

 

On the day after Thanksgiving, 120 retail sites listed free-shipping promotions for a limited-time, Davis said. Now, 158 sites have active promotions, and many elected to extend the expiration date for the promotions to continue through 2003, he said. The company does not track the average threshold level that triggers free-shipping.

 

Free shipping also can help build customer loyalty.

 

Ivan Dunmire, 44, of New York, said he regularly shops online and favors sites that offer free shipping. "I would buy more online if I knew shipping was going to be free," he said.

 

While free shipping ranks as the top lure for consumers -- even higher than special sales or discounts -- consumers need to be aware of various restrictions on promotions, Davis said.

 

"Merchants have figured out that the words 'free shipping' get consumers into their online stores," said Davis. "But they build walls up or conditions so that many of those consumers will not qualify for free shipping."

 

He noted statistics, drawn from BizRate.com customers surveys, that show 39 percent of online shoppers said they were drawn to order at the Web site by an offer of free shipping, although only 9 percent of orders ended up being eligible. And Amazon.com, for instance, lists numerous exceptions to free-shipping on its Web site, including toys, clothing, and video games. Others, including TheSportsAuthority.com have free shipping policies for only selected items.

 

But it's still a psychological tool to help Amazon and others attract new online shoppers, said Carrie Johnson, senior retail analyst with Forrester Research. Those shoppers tend to be more price- sensitive, have generally lower incomes than frequent online shoppers and are used to the bricks-and- mortar world than surfing the Internet.

 

Online shopping -- which totaled $78 billion including travel -- amounted to only 3.4 percent of total retail dollars spent by consumers in 2002, she said. Forrester projects that figure to grow to $95 billion, or 4 percent of the total, in 2003.

 

Johnson added that the $100 million that Amazon expects to spend on subsidizing the free-shipping offer is "not an outrageous cost when you consider the price of a Super Bowl ad" -- which averaged about $2.2 million for 30-second spot this year.

 

And it keeps customers loyal, she said: "Free shipping absolutely is a drug(like) promotion."

 

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Streamline Sales Tax Report---Dennis Brown, Equipment Leasing Association

 

Recent days have seen a double header for the Streamline process. The Streamlined Sales Tax Project (SSTP) met Thursday, January 23 - Friday, January 24.  The Task Force established by the National Conference of State Legislatures (NCSL) to track SSTP met in conjunction with the NCSL Executive Committee on Friday, January 24 and Saturday, January 25.  Regrettably, they met in different locations.

 

Issues covered in this update are:

 

          *          Non-Sales Tax States Protest BAT Linkage

          *          Task Force Hears BAT Issue

          *          Streamline Supporters/Opponents To Debate in Washington, D.C.

          *          Internet Tax Freedom Act

          *          Streamlined Sales Tax Project Meeting

          *          Digital Overview

          *          Sourcing

          *          Returns and Remittances

          *          Certification

          *          Exemption Certificates 

          *          New SSTP Co-Chair Elected

 

Non-Sales Tax States Protest BAT Linkage

 

Resistance expressed by legislators from sales tax states to linking Business Activity Tax (BAT) protections to congressional legislation sanctioning the Streamlined Sales Tax Agreement (SSTA) to collect from Internet and catalog sellers was a predictable element of NCSL deliberations.  Speculation regarding the ultimate policy adopted by NCSL on the issue involves conjecture as to the willingness of states to forego potential minor revenue enhancements from corporate income in exchange for the Internet sales tax bonanza they desire. In the end, NCSL might simply not take a position on the issue.  It remains to be seen.

 

Opposition voiced by non-sales tax states attending the NCSL Executive Committee meeting was added to the familiar skirmish over congressionally enacted BAT protections.  Delaware, New Hampshire and Oregon [non-sales tax states] expressed support for Streamline as a voluntary arrangement between sales tax states but balked at the prospect of a congressional mandate infringing on future revenue sources they may want to gain from corporate income. Their anxiety was triggered by fear that congressional legislation as yet unwritten might infringe on the underpinning of corporate taxation they consider vital to state revenue in absence of a sales tax.  They gave notice of opposition should NCSL move toward endorsement of such federal legislation. 

 

NCSL President Angela Monson (D-Oklahoma) felt NCSL would likely avoid endorsement of legislation containing federal preemption as part of a continuing effort to protect state sovereignty.  She reported NCSL support is at present confined to the voluntary agreement now being considered by state legislatures.  The issue of BAT linkage is a policy question that will soon come before the NCSL Executive Committee that she chairs.  Any position taken by the Executive Committee would be an interim authorization carried to a vote of the full membership body at the NCSL Annual Meeting in San Francisco scheduled July 21-25.  Although backers of BAT protection would benefit by NCSL support, I don't believe a neutral position would necessarily be a major setback in congress.

 

NCSL President Monson will address these issues at a luncheon appearance in Washington, D.C. on Wednesday, March 5. The event is open to all and details are provided in another section of this report.

 

Task Force Hears BAT Issue

 

The NCSL Task Force meeting preceding Executive Committee discussions was also predominated by debate over linking BAT protections to congressional legislation. The business community fears sales tax collection under a mandatory system will give cash hungry states a pretext to claim economic presence they insist creates BAT liability.  This issue is of less significance to many lessors than concern over prospective BAT issues when lessees move equipment to a new jurisdiction unbeknownst to the lessor. 

 

NCSL Task Force members heard arguments from business advocates favoring a BAT link while the Multistate Tax Commission (MTC) argued against any connection.  Art Rosen from McDermott, Will & Emery discussed an evolving proposal that would require collection by remote sellers but also establish a BAT physical presence test before state or local governments may levy tax on corporate income. MTC predictably expressed opposition based on fear such linkage involves extraneous tax levies and would be a violation of state sovereignty.  It is the application of this physical presence test to non-sales tax states that sparked opposition from Oregon, Delaware and New Hampshire at the subsequent Executive Committee meeting.

 

On issues of governance, many fear the Governing Board established to administer Streamline would overturn gains made by the private sector during deliberations resulting in adoption of the Agreement on November 12, 2002.  Art Rosen suggested the Federal Court of Claims as final arbiter while MTC favored congressional oversight so as not to "federalize" state sales tax.

 

Streamline Supporters/Opponents To Debate in Washington, D.C.

 

Streamlined Sales Tax is featured in two meetings planned in Washington, D.C. in March, one being a debate between supporters and opponents.  Both events are open to everyone. I will circulate registration information in a separate email update.

 

First is a presentation by NCSL President Senator Angela Monson to the Washington Area State Relations Group (WASRG) on Wednesday, March 5. Senator Monson is also Co-Chair of the Streamlined Sales Tax Implementing States. The second event features a debate between Streamline supporters and opponents in the Hall of the States at the foot of Capitol Hill on Wednesday, March 12. The Council On State Taxation (COST) and National Retail Federation (NRF) will speak in support of Streamline. The American Legislative Exchange Council (ALEC) will offer dissent.  I will soon circulate registration information.

 

Internet Tax Freedom Act

 

There is no congressional moratorium against collection of sales tax from the Internet.  Nonetheless, when the Internet Tax Freedom Act expires in November many will seek to tie an extension of the Act to a sanction of Streamline as a mandatory system providing BAT protections.  Last year saw congress deliberate such a strategy, the Business Activity Tax Modernization Act of 2002. It is an interesting dynamic considering the Internet Tax Freedom Act only forbid new taxes on Internet access but no curtailment of e-commerce sales tax collection.  As voiced at the Task Force meeting, there is no federal preemption of the Streamline system in the Internet Tax Freedom Act.

 

Streamlined Sales Tax Project Meeting

 

Attendance at NCSL pulled me away from the bulk of the Streamlined Sales Tax Project (SSTP) deliberations.  I greatly appreciate the willingness of ELA State Government Relations Committee Chair Valerie Guerrieri, CIT to provide the following report.

 

Digital Overview

 

The session opened with presentations from Gartner Research consultants discussing emerging trends in building XML content for transaction based data exchange content service providers, web service providers and how such technologies may accommodate sales tax collection trends into the future.  Primary interest in the presentation was probably among the Chief Information Officers and Technology Officers in attendance that are working on the tax-XML standard. The presentation also enlightened business tax professionals and state revenue officials.

 

A panel of Gartner Consultants and revenue officials interactively discussed the definition of 'Digital Property'.  Gartner consultants found grasping logic in sales tax law as the most difficult hurdle to defining digital property.  In a non-tax world, reference to digital property implied ownership of it and an intangible right.  After much discussion it was determined the reference to 'property' was creating confusion and decided that 'product' appropriately conveyed the digital output (or digital equivalent to TPP) that the project seeks to define.   Hence, the last draft definition of digital property will be amended to Digital Product.

 

Sourcing

 

The sourcing workgroup began discussion on third party drop shipments and determined the Agreement should include a uniform explanation and treatment for these transactions. They are soliciting comments to better define the matter and recommend a direction to take. Also, they decided the current sourcing for florists would be grand fathered under an amendment to terms the Agreement until Jan 2006. 

 

Returns and Remittances

 

The uniform electronic return is gaining increased interest as activation of the Streamline system nears.  One big issue is the ability of a state system to take credits (negative amounts at local level) as several states currently cannot process negative amounts on the return and will require the taxpayer to track back to the original payment of the tax and amend those period(s) of returns to initiate a refund.

 

Credits are most often created by returned goods, for retailers, and by post receipt of an exemption claim for sellers reporting sales as shipped and collecting funds and certificate with a net 30 day invoice (standard for B to B). If enough money is collected in the local jurisdiction to offset the credit, the seller may recover tax paid by offsetting credit from current collection.  If the customer is in a remote jurisdiction where seller does not have enough activity to offset the credit, many states are expecting the seller to amend the prior period returns and await a refund. 

 

Business and the workgroup chairs find recovering by amended returns places hardships on sellers and appreciate difficulty placed on state system constraints.  The states with limitations on accepting credits will need to revisit this matter and identify their exposure and requirements to program systems to accept negative (credit) amounts. 

 

A further demonstration of administrative issues was discovered in Payment Restrictions providing that due dates on banking holidays shift to next business day.  Saturday and Sundays are not banking 'holidays'... technically, but are non-banking days.  Those present felt it should be amended to recognize the inability to transfer tax funds through the banks, EFT, wire or Federal Reserve on Saturdays or Sundays as well as holidays. 

 

Discussion on 6 month informational filings of exempt sales and other tax adjustments lead to informal discussions of what detail is actually maintained by business.  The exemption certificate workgroup appears undecided on such issues at this time.

 

Certification

 

A brief discussion covered conceptual guidelines for a Certified Service Provider (CSP).  CSP's may be responsible to ensure all seller's activity flows through to state.  'May' implied uncertainty as to how much responsibility the CSP can take for independent actions of the seller.  This will certainly be the topic of much debate at future certification meetings.  Each state will be responsible to test connections to the system, update in accordance with their statutes & rules and may also be required to perform continuous testing to ensure system determinations provide the correct results. There was some discussion on states desire to connect remotely to Model 3 seller systems to check certification by means of testing and verification of functionality.  Time limited discussion and some business representatives perceived it as equating more to a perpetual audit than a system check.  Testing Model 3 sellers and checking certification is premature, as the states have already noted the lack of resources and inability to certify the hundreds of sellers that do not wish to use a CSP.

 

Exemption Certificates 

 

The workgroup released their 'draft' issue paper titled 'Implementation and Operational Requirements For a Simplified Exemption Administration Process'.  The paper contained a working premise for sellers to be relieved from the 'good faith' requirement as well as concepts to consider for administration, operation and certificate contents.   Included were two 'draft' uniform exemption certificates as samples for discussion.  Sample form 1 was similar in content to many current state forms and asks for more detail that should be required under relaxed good faith requirements.  Sample form 2 was abbreviated by eliminating the description of buyers' business/organization and description of items covered by the exemption claim.  The workgroup is soliciting comments on the 'draft' issue paper and sample forms and will continue discussions through June of this year at which time it expects to finalize their work.

 

New SSTP Co-Chair Elected

 

Scott Peterson, Director, Business Tax Division, South Dakota Department of Revenue, was unanimously appointed to fill the SSTP co-chair position left vacant by the retirement of Charles Collins.  Marshall Stranburg, Deputy General Counsel, FL Dept of Revenue, was unanimously voted to fill the vacant position on the Steering committee.

 

Dennis Brown

Equipment Leasing Association

DBROWN@ELAMAIL.COM 

 

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