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Kit Menkin’s Leasing News www.leasingnews.org
Friday, October 4, 2002 Accurate, fair and unbiased news
for the equipment Leasing Industry Thursday’s Leasing News posted
www.leasingnews.org at 9:33am PDT -------------------------------------------------------------------------- Please Return to old Format--- Kit: No big deal, but I really like it better with the Headlines
at the very top. Barry S. Marks,Esq. (Thank you for your advice, Barry. Will do. Monday—Headlines back
to the top of the page. I always listen to you, and Joe Bonanno, upon
who’s advise we print our policy in every edition.
Editor) ---------------------------------------------------------------------------------------------------------
Leasing News—Presents ---Two Workshops
at UAEL Conference, San Diego Tomorrow, October 5,2002 (Walk
In Day Registrations Accepted) Kit Menkin along with Bob Rodi, CLP---- moderator sergeant-at-arms
Top Gun
"Sales Managers" Top Gun
"Sales Men" Moderator: Christopher “Kit”
Menkin, editor/publisher, Leasing News Sergeant-at-Arms: Robert “Bob”
Rodi, CLP, President, LeaseNow, Leasing News Advisory Director,.Internet Guru, Software Inventor, Semi-Professional
Wrestler (ex-Baltimore cop---tough guy Supreme---also
learned a thing or two as president of UAEL and being in
the leasing business for 25 years.) Full UAEL Conference Brochure http://www.uael.org/events/fall/UAEL_FallConfBro_2002.pdf
Sheraton San Diego Hotel and Marina
1380 Harbor Island Drive San Diego, California 92101 United States Phone (619) 291-2900 Fax (619)
692-2337 ---------------------------------------------------------------------------------------------- Headlines---- Picture from the Past—Jim Swander,
CLP Microsoft
Enters Leasing Fray by Christopher
Menkin Kuwait Leasing Club NOT a
joke Mortgage
Rates edge higher this week Sorry Virginia! Santa Claus got held up by
the West Coast ports History of West Coast
Port Strikes---from Seattle History Link Former millionaire (leasing executive)
could be deported over tax conviction Equipment Leasing Association Newsletter
Highlights Conseco's Troubles Outlast Reign
of a Would-Be Savior Majority of PayPal shareholders
approve eBay merger Fans should give credit
to Mariucci? ----------------------------------------------------------------------------- please send to a friend, as we
are trying to build our readership. ------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------
Contract Administrator: Fort Lauderdale, FL "EAEL" Contract/Document Administrator with leasing/ financing experience,
small ticket credit helpful,able to work well with sales people, for growing
fast paced company. Email:dstewart@performance-capital.com Sales: Detroit UAEL In search for experienced Small Ticket sales reps in MI. Base + commission. Contact
us for further information and for candidate email: emilyfitzpatrick@bellsouth.net services offered. Sales: Minneapolis, MN "NAELB" Establishing nationwide regional territories. Vendor/end
user experience required. Mini- ticket, small-ticket & lower, middle
market programs. Negotiable pay plan. Email:summitfunding@msn.com for full list, please
go here: http://65.209.205.32/LeasingNews/JobPostingsWanted.htm Rumor Has It : May
use CapitalStream for Processing Applications By Christopher Menkin Bouyed by the success of HP Financial, Microsoft Capital
promises low interest loans and leases, incluing offering up to $150,000 at 0% interest
for 24 months on certain purchases. Another program - originally a $25,000
credit line for computer builders - was expanded to $150,000. Due to the dollar amount of its software, Microsoft has not
entertaining financing until recently, seeing a better rate of return on their "cash"
and increased sales to their parent corporation. In September, Micosoft began promoting a vendor financing
plan, aimed at small businesses with a interest-free for 90 days to purchase
Microsoft software, as well as related computer hardware, technical services
and non- Microsoft software. The promotion targeted customers of Microsoft's Business
Solutions division, which sells the recently acquired Great Plains and
Navision products. The minimum loan is $10,000 and there's no maximum. "If the customer is creditworthy we will do the deal.
We've gotten applications over $1 million, but the average is about $100,000,"
says Jeff Edwards, director of product management at the Business Solutions
division. Many leasing companies and Banks are often hesitant to finance
software purchases or technical services because, training or other "soft
costs." Often the limit is
ten percent of the sale. There
are leasing companies who do software leasing but at a premium rate and
others who do 100% software but require top credit and a vendor profile
to insure maintenance and service. By balancing the margins Microsoft makes on its software
with the cost of the financing offer, Edwards says Microsoft can manage
its risks and cover the cost of its capital even with zero-interest offers.
"It's a major new strategy for us," he says. Microsoft has recently introduced other financing programs.
This week it began extending credit lines up to $150,000 to small U.S.
companies that build and sell computers with Microsoft software. It is
a similar program to HP Financial ( which merged with Compaq Financial
when the parents merged. ) The program, introduced in April 2001 as Microsoft
prepared for the launch of Windows XP, lets computer builders borrow money
to purchase Microsoft software, which they would install on computers
sold to customers. The entrance into the equipment/software leasing market appears
will definitely boost software sales at a time when PC shipments are weak
and spending on new technology remains depressed, analysts say. They also
come at a time when Microsoft has made a concerted push into the small-
business market, where financing deals are more common. These tailored programs account for a fraction of Microsoft's
current business. "It's not like they are going to finance PCs for
the world," says Rick Sherlund, software analyst at Goldman Sachs.
He recommends purchase of Microsoft shares and doesn't own the stock.
"This is an effort to facilitate the purchase of Microsoft software
for the small- and mid-sized company market." The push into the financing business is also an effort by
the software giant to find a use for its more than $50 billion in cash
and equivalents, something investors and analysts have called upon the
company to do. Despite potential bad debt risks, a financing program is
a profitable way for Microsoft to deploy some of its cash, analysts say.
More importantly, vendor financing could help Microsoft compete with the
likes of International Business Machines Corp., which has used financing
extensively to sell a broad range of products and services, as well as
Hewett-Packard, Dell, and Gateway, to name a few. "Financing has proved an important tool for IBM,"
wrote George Gilbert, software analyst at Credit Suisse First Boston,
in an August research report. Gilbert rates Microsoft stock at outperform
and doesn't own the shares. "With financing (Microsoft) could offer
end-to-end solutions through its partners and pioneer a new channel for
small and medium enterprises." Microsoft is entering the financing business at a time when
others are exiting it or have had to take large charges for bad debt expenses.
Xerox, a big provider of equipment financing, is outsourcing its financing
program to lighten its debt load and reduce risk. Tyco International divested itself of the CIT
Group and even the giant GE has come under scrutiny because of their complex
financing arms. While Microsoft has an enviable balance sheet, it is assuming
risks by lending out its money. It has taken steps to mitigate potential
liabilities. It has hired a handful of former bankers to run Microsoft
Capital under the direction of Chief Financial Officer John Connors, one
analyst said. Microsoft will focus on financing software purchases and
avoid unrelated markets. It has partnered with Household International
Inc. (HI), a large provider of consumer loans and credit cards, to screen
applicants, make credit decisions and handle customer billing. It is rumor an announcement with CapitalStream, located in its home state
and with a proven track record, will be made shortly. Recently this company was rated very highly by Deloitte and Touche in Washington State Technology Fast
50 winners. http://www.leasingnews.org/archives/Sept2002/9-30-02.htm#capitalstream Vendor financing is not entirely unknown in the software
business - many companies let customers stretch out payments or lease
products. For example, Oracle Corp. sold 14% of its software licenses
through its financing division last quarter. But Oracle and most other
vendors typically sell their loans to banks, finance and leasing companies..
Microsoft is putting its own money on the line. Many are saying, “Look out, GE, you finally have competition.” Analysts aren't overly concerned about the downside to Microsoft
Capital.. In addition to more than $50 billion in its treasury, Microsoft
generates about $1 billion in free cash flow every month, notes Goldman's
Sherlund. "I would not suspect they would have to dip into their
existing cash balance" to fund these programs, he says. The New York Times recently reported that more than any other
time in its 27-year history, the personal computer industry has found
itself in a quandary, having to concoct new reasons to persuade the world's
500 million PC owners to replace their existing machines. And the problem
goes beyond the computer makers themselves: no new computer generally
means no new copy of Microsoft Windows sold, no upgrades to word processing
or spreadsheet programs. Computer and chip manufacturers have long used advances in
speed as a central point to sell new computers. To be sure, such marketing
will still appeal to people who edit video or process complex photographic
images, for example, or make calculations with large masses of data, or
play video games on the PC. They still see big benefits when they upgrade
to faster chips for their processor-intensive tasks. But even some of them are having second thoughts. Norman
H. Nie, a political scientist at Stanford who has long thought of himself
as a PC power user, was the co-inventor of a widely used and computer-power-hungry
software program known as the Statistical Package for the Social Sciences.
For more than three decades the software has taxed the power of first
mainframes, then minicomputers and finally PC's. Dr. Nie has always acquired new, more powerful computers
as they became available. But he was stunned not long ago to discover
that his faster new computer did not improve the speed of his software.
He predicted that for many people, the upgrade cycle might be ending. "We're beginning to see a time where — except for the
third world — the replacement cycle for computers looks like Detroit,"
where the desire for a new car every year yielded to a slower turnover,
he said. That new attitude is shown clearly in a recent national opinion
survey by Odyssey Ventures, a San Francisco market research firm. Among
households with PC's, the intention to buy a new computer in the next
six months has fallen to just 11 percent from 21 percent in early 2000
and the lowest level in five years. And half of PC owners now have home
computers that are at least two years old — more than at any time since
1994, when Odyssey began keeping track. The pace of upgrades is crucial
because, according to the Gartner market research organization, they account
for 80 to 85 percent of new computer sales. "We've come to a plateau," said Nicholas Donatiello
Jr., the chief executive of Odyssey, "What we're seeing is there
are other digital needs in the home, and people may be spending money
around the TV rather than the PC." The computer industry's boosters insist that growth has leveled
off before and that slumps have been only temporary. Each time the PC
business has appeared to run out of steam in the past it has been revived
by an burst of software creativity — from the spreadsheet to video games
to the Internet — that has attracted millions of first-time buyers followed
by successive waves of up graders. There is no doubt Microsoft Capital will make its major mark in the leasing industry, perhaps
almost as significant as when it introduced its internet browser. At the time, Netscape had 85% of the market share. Today the opposite is true. Leasing News was
unable to confirm that the company is taking "private label"
leases or accepting lease brokerage business at this time. ------------------------------------------------------------------------------------------------ Kuwait Leasing Club NOT a joke http://www.leasingnews.org/archives/October2002/10-2-2002.htm#rahim “This was a legitimate inquiry by Mr. Mohammad of A'Ayan
Leasing. I lectured at the Mid East Forum this May in Kuwait (sponsored by A'Ayan
Leasing and the Kuwait Chamber of Commerce), met the senior management
team of A'Ayan Leasing and did some training with them (along with Jeff
Taylor) regarding pricing and operating leasing. A'Ayan Leasing is majority
owned by the Kuwait Finance House, one of the largest financial institutions
in Kuwait and highly regarded. As Mr. Mohammad stated in his e-mail,
A'Ayan is interested in promoting leasing throughout the Gulf States
and is taking a number of steps to educate both members of the industry and
governmental authorities of the benefits of leasing as a methodology of
capital financing . Robert Sammis Sammis & Associates rsammis@msn.com (Mr. Sammis formerly
was Executive Vice President of
GATX Capital prior to his retirement in January having worked
in the industry for 26 years, been an active member of the ELA and past Chairman
of both the ELA Global Committee and the ELA Equipment Committee. ------------------------------------------------------------------------------------------------- Mortgage Rates edge higher this week By Associated Press WASHINGTON (AP) Rates on 30-year mortgages edged up this
week but hovered near the lowest level on record, which was reached last
week. In a nationwide survey released Thursday, Freddie Mac, the
mortgage company, reported that the average interest rate on a 30-year
fixed-rate mortgage rose to 6.01 percent this week. That was up from to
5.99 percent last week, which marked the lowest level since Freddie Mac
began tracking 30-year mortgage rates in 1971. Last week's rate surpassed the previous low of 6.05 percent
set last week and marked the fifth time this year that 30-year rates hit
record lows. Mortgage rates have been falling amid a spotty economic recovery
and a turbulent stock market that has sent investors to the bond market,
helping to push long-term rates down. Low mortgage rates are feeding a boom in mortgage refinancing.
Savings or extra cash coming out of refinancing deals is helping to support
consumer spending, including home buying, amid uncertain economic times
and eroding consumer confidence. ''Low mortgage rates should reinforce the growth in housing
and mortgage markets, spurring additional home sales and refinancings,''
said Freddie Mac's chief economist Frank Nothaft. The Mortgage Bankers Association of America reported Wednesday
that mortgage loan applications reached a record level last week. Refinancing
activity accounted for 76.9 percent of total applications last week, up
from 74.8 percent in the previous week. Rates for 15-year fixed-rate mortgages, a popular option
or refinancing, dipped to 5.40 percent this week, the lowest level since
Freddie Mac began tracking these rates in August of 1991. Last week, 15-year
mortgages averaged 5.41 percent. For one-year adjustable-rate mortgages, rates rose to 4.29
percent, up from 4.22 percent last week. This week's mortgage rates do not include add-on fees known
as points. Each loan type carried an average 0.5 point fee this week.
A year ago, 30-year mortgages averaged 6.64 percent, 15-year
mortgages were 6.11 percent and one-year ARMS stood at 5.34 percent ------------------------------------------------------------------------------------------- Sorry Virginia! Santa Claus got held up by the West Coast
ports by René Tankersley, feature editor Landline Magazine ( The Official Publication
of the Owner-Operator Independent Drivers Association) While the dockworkers' union and port management stare each
other down in a stalemate over technology and job security, the U.S. economy
and trucking industry loses more each day the ports remain closed. Who
will blink first - the dockworkers' union or management? The Pacific Maritime Association closed the ports Sunday,
locking out the International Longshore and Warehouse Union in response
to union work slowdowns. Now, the PMA refuses to reopen the ports unless
the ILWU agrees to extend their expired contract while negotiations continue.
But, the ILWU won't budge until management reopens the port. In the meantime, trucks loaded with fresh produce and other
exports wait in a holding pen with no hope of being unloaded any time
soon. Retailers are calling on President George W. Bush to take immediate
action to reopen the West Coast ports, warning the shutdown could lead
to retail store closings, layoffs and shortages of consumer products during
the holiday shopping season. And, the national economy loses $1 billion
dollars each day the ports are closed, according to research by the University
of California Berkley. The National Retail Federation President and CEO Tracy Mullin
wrote a letter to the president, asking for his intervention to reopen
the ports. "With the retail industry and consumer spending largely
propping up a weak economy, the inability to get goods off the ships will
quickly result in idling of distribution centers, closure of stores and
layoffs of workers," Mullin wrote. "U.S. consumers will also
quickly see an impact as goods become unavailable and prices rise." ____________________________________________________________ History of West Coast Port Strikes---from Seattle History
Link ___________________________________________________ Former millionaire ( leasing executive) could be deported
over tax conviction (Guardian Capital.
Tanner reportedly owns Guardian Capital, Guardian Shield, Guardian Holdings
and the Guardian Group, many leases with the now bankrupt Commercial
Money Center) By Patricia Orwen and Dale Brazao Tronoto Star Staff Reporters The failure by police agencies to record a conviction for
income tax evasion did not absolve a former Brampton millionaire( president of Guardian Financial Services, USA)
of his obligation to tell the federal parole board about it when he applied
for a pardon. That's what a justice department lawyer told a Federal Court
of Canada judge in Toronto in a case that may trigger Blaine Tanner's
deportation from the United States. Tanner, once considered one of Ontario's worst deadbeat dads,
received a pardon from the National Parole Board in June, 1999 for criminal
offences that included break and enter, fraud and making a false statement. But he neglected to tell the board about a 1993 conviction
in Brampton for income tax evasion. His guilty plea, arising out of fraudulent
claims for some $1.3 million in federal tax credits, was not entered in
the RCMP's central computer. The parole board revoked Tanner's pardon in August, 2000,
saying he obtained it under false pretenses by not disclosing the conviction.
And the fact that he hadn't paid the $100,000 fine levied at the time
made him ineligible to apply for the pardon in the first place. "An administrative error on the part of the police forces"
did not "relieve the applicant of his obligation to tell the parole
board about all his convictions," justice department lawyer Charleen
Brenzall told Mr. Justice John O'Keefe yesterday. But Tanner's lawyer, Brian Greenspan, argued that the parole
board member who revoked Tanner's pardon had acted in a "capricious
and unreasonable" manner in not accepting his explanation that he
didn't know he had to include it in his application because it wasn't
on a criminal record he'd obtained from the RCMP. Tanner, 49, did not attend court. But the outcome of the
hearing could be crucial to him. He has lived in Cleveland since 1997,
when he married prominent civil rights lawyer Ellen Simon, and anyone
who enters the United States and is later found to have a criminal record
in another jurisdiction could be at risk of deportation, U.S. immigration
officials say. American and Canadian authorities began looking at Tanner
after a Star investigation on deadbeat dads two years ago disclosed how
the entrepreneur had obtained a pardon without having paid his $100,000
fine. At the time, Tanner was involved in a bitter legal fight
with his former wife, Pamela Tanner, over his failure to pay any support
for their three children, two of whom are so severely disabled the family
qualified for provincial disability benefits. Tanner, who was under a
1991 court order to pay $4,000 a month in support to his three children,
hadn't paid a penny until after The Star published its investigation. Both Greenspan and Brenzall agreed on one point in this case
— something went wrong in that Tanner's 1993 conviction was not entered
into the RCMP computer. "It was clearly some sort of glitch,"
Brenzall told reporters after the hearing. Justice officials say revocation of a pardon is a rare occurrence.
Of the 16,645 pardons granted in 2001-02, only 20 have been revoked. Most
are the result of someone reoffending. _______________________________________________________________________ Equipment Leasing Association Newsletter Highlights
LIST THEM--- ******************************** ELT E-Leasing Newsletter 10/3/02 ******************************** The Equipment Leasing Today E-Leasing Newsletter is published
every Thursday and is sponsored by the Equipment Leasing Association and
its co-sponsor. To get Full-Text Stories, go to the web page associated
with the story you wish to read. The links to news stories require an
ELA MEMBERS-ONLY NAME AND PASSWORD. To receive a password, please go to
http://www.elaonline.com/memberDir/Profile/IndivForm.cfm NOTE: Address change/unsubscribe instructions and contact
information can be found at the end of this e-mail. If you received this e-mail
(but it was NOT forwarded to you by someone else) you are ALREADY subscribed. ************** The E-Leasing Newsletter is SPONSORED by:
*************** NASSAU
ASSET MANAGEMENT Recovery
and Remarketing Specialists 1(800)462-7728
or 1(800)4-NASSAU GO HERE>>>>>>
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hour reporting via Web *Highest resale prices Call Nassau now
for a complete assessment of your needs!!! http://www.nasset.com ****************************** 2. FASB-Industry
Discussions Reveal More About SPEs ****************************** The Financial Accounting Standards Board (FASB) met on September
29, 2002 in two 3-hour roundtable sessions with invited participants to
discuss the proposed Interpretation for Consolidation of Special Purpose
Entities. The guests represented a spectrum of industry, banking and financial
concerns. Moderated by Ed Trott, member of the Board responsible for the
project, the meeting allowed participants to voice issues in their comment
letters and the Board to pose questions about various attributes of the
Exposure Draft. The "information-gathering" session didn't yield
much new information nor was it the Board's intent to reach any conclusions
during the session. However, the meeting was invaluable to ascertain which
way the wind was blowing - both from remarks made by Board members as
well as body language. The session confirmed the direction the Board headed
in its most recent meetings on September 11 and September 25, that is,
that the scope exception in paragraph 8(c) (SPEs consolidated into substantive
entities) is in jeopardy and that the recognition of "virtual"
SPEs within substantive entities is gaining support. Both issues threaten
many leasing transactions with substantive lessors whether or not an SPE
is used. SEC Weighs In. Probably the most telling comments of the
day, however, were closing remarks in both the morning and afternoon sessions
by Jackson Day, deputy chief accountant of the SEC. Mr. Day strongly urged
that the Interpretation be issued by year end and effective second quarter
2003 as proposed. Clearly, the SEC has put FASB on notice - the Interpretation
must get done, and done soon. SOE Carveout and Virtual SPEs. The Big Four accounting representatives
plus Grant Thornton had significant airtime to express their views on
many matters that touch on leasing. Consistent with their comment letters,
the public accountants spoke plainly concerning "rent a balance sheet"
effects of the 8(c) scope exception and the need to view segregation of
assets and liabilities without a corporate shell as an SPE ("virtual"
SPEs). Themes such as controlling financial interests and consolidation
of entities by an SOE with control over meaningful decisions were heard
throughout the day. Does having the variable interests mean you have control?
Can there be a presumption that the party who has the greatest risk of
loss and reward must de facto have control over the asset? What's the
legal distinction with and without the use of a corporate shell? Leasing Issues. Leasing interests were also represented.
These representatives spoke most actively about the scope exception
and virtual SPEs, and the disturbing results of the variable interest
model in the credit tenant lease market. One suggested that the scope
exception be subject to current GAAP requirements (i.e., EITF 90-15 and
96-21). Q&A revealed that the Board often isn't familiar with leasing
practice (i.e., lessees under true leases normally don't guaranty residuals).
Ed Trott denied that the ED effectively amended lease accounting, stating
that there is no conflict between Statement 13 and the Interpretation.
An ELA Financial Accounting Committee member observed, "There is
a sense that the mere existence of synthetic leases is creating an obstacle
to constructive discussion which might lead to a positive outcome for
the leasing industry in the Interpretation." Securitization and the Fed. The comment letter sent by the
Federal Reserve last week weighed heavily in to the proceedings. The Fed
argued that consolidation of conduits, CDOs and the like would cause a
massive regulatory capital problem. FASB is listening carefully to this
argument. The scope exception for QSPEs also plays into the discussion
since the Board has to respect and work around the precedent of Statement
140. As a result, the heavily represented securitization/CDO/derivatives
interests got substantial air time. While
this constituency may have walked away unsatisfied, the Board is listening,
clearly trying to see if these interests can be accommodated. Some suggestions
included moving to consolidation of SPEs only when a party holds a majority
of the variable interests; this might create more breathing space plus
allow the Board to eliminate the concept of a financial SPE. Effective date and transition were discussed with some good
suggestions from industry to help manage implementation, but the Board
voiced opposition to any changes from the draft, consistent with the SEC's
urging. The Board is expected to have further discussion of this
matter as it redeliberates the Interpretation. The ELA is in the process
of setting up a meeting with the Board and staff over the next few weeks
regarding leasing practice and the use of SPEs.
Stay tuned. ****************************** 3. ELA Urges Treasury
To Make The Mid-Quarter Depreciation Convention (60/40 Rule) An "Election"
For 2002 ****************************** Yesterday, an ELA delegation led by ELA Vice Chairman, Ed
Dahlka (LaSalle), met with a group of high-ranking Treasury Department
officials and urged Treasury to unilaterally take immediate administrative
action, which would allow taxpayers to elect not to apply the mid-quarter
convention for property placed in service during the fourth quarter of
2002. The ELA group, which also included ELA President, Mike Fleming and
ELA Vice President, Steve Fier, explained that as a result of the slumping
economy, many taxpayers have encountered difficulty completing the acquisition
of equipment in accordance with plans developed earlier in the year when
economic growth projections were more positive. They also pointed out
that those who do go forward and acquire equipment will pay a premium
as there will be less funding sources available if the election is not
made available. Last year, following the tragic events of 9/11, Treasury
issued Notice 2001-70 allowing for such an election at ELA's request.
While urging Treasury to act immediately on its request, the ELA representatives
also urged the Treasury officials to support the Association's efforts
to have the mid-quarter convention repealed. ****************************** 4. 30% Bonus
Depreciation Syndication Problem expected to be Addressed In Legislation
****************************** According to ELA Vice President, Steve Fier, it appears that
the key tax staff on Capitol Hill has agreed to address a problem with
the bonus depreciation provision brought to their attention by ELA back
in June. The fix is expected to be included in what is called a "technical
corrections" bill. As enacted into law earlier this year, the 30%
bonus depreciation provision does not facilitate the syndication of lease
transactions. If an underwriter or syndicator closes a transaction, either
a direct lease or sale and leaseback within the 3-month statutory window,
and then sells a portion of the transaction to another lessor, neither
the syndicator nor the purchaser is entitled to the 30% bonus. While Hill
staff is keeping the technical corrections bill under wraps, Fier is hopeful
that it will contain a provision that will allow a syndicator a period
of up to 3 months to syndicate a transaction by treating qualifying bonus
depreciation property as originally placed in service by the person purchasing
from the syndicator. The legislation is expected to be introduced soon
and would be retroactive to the original date of enactment of the 30%
bonus provision. However, Fier cautions that with so few days left on
the legislative calendar, it is unclear how or exactly when the sponsors
of the bill will move the legislation. "But," Fier said, "the
introduction of the bill may be sufficient to allow Treasury to take administrative
action consistent with the language of the legislation pending enactment".
************* The E-Leasing Newsletter is sponsored by: **************** Asset Control Doing more for your bottom line. Providing expert individual attention that allows you to
preserve the value of your portfolio. Recovery, Collections, Remarketing, Appraisals, Inspections,
Auctions & Storage 1-888-227-0444 email: info@assetcontrol.com VISIT OUR WEBSITE >>>>> http://www.assetcontrol.com ********************************************************************* ****************************** 15. ELA Calendar
of Events ****************************** Please visit ELA's 2002 Calendar of Events online at http://www.elaonline.com/events/year2002.htm If you have any questions about ELA conferences and workshops,
please contact Lesley Sterling at lsterling@elamail.com October 7-9, 2002 Principles of Leasing Workshop Hilton Northbrook, Northbrook, IL http://www.elaonline.com/events/2002/principles/ October 9, 2002 Credit Scoring and Decision Automation in the Leasing Industry
A Practical Overview of Scoring in the Leasing Industry Philadelphia Courtyard Marriott ~ Philadelphia, PA http://www.elaonline.com/events/2002/credscore/ October 13-15, 2002 41st Annual Convention San Francisco Marriott, San Francisco, CA http://www.elaonline.com/events/2002/AnnConv/ November 7, 2002 MAEL 20th Annual Dinner Meeting Westin O'Hare, Chicago, IL http://www.mael.org/members/news.asp December 2-4, 2002 Principles of Leasing Workshop Embassy Suites, LaJolla, CA http://www.elaonline.com/events/2002/principles/ December 9-11, 2002 Principles of Leasing Workshop Philadelphia Marriott, Philadelphia, PA http://www.elaonline.com/events/2002/principles/ For more information on the events listed below, or to view
ELA's entire calendar, visit the ELA Conference & Training Home Page
at http://www.elaonline.com/events/ and click on the links to
programs of interest to you. **************************************************** Submit your own company news story for ELA'S E-LEASING NEWS!
Visit http://www.elaonline.com/news/newsaddedit.cfm **************************************************** *** FOR MORE NEWS For more leasing news, visit ELA Online's News Home Page
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Copyright 2002 by the Equipment Leasing Association http://www.elaonline.com/ Phone: 703/527-8655 Fax: 703/527-2649 Conseco's Troubles Outlast Reign of a Would-Be Savior By FLOYD NORRIS and JOSEPH B. TREASTER New York Times Gary C. Wendt, the former General Electric executive who
was hailed as a savior when he was hired to run Conseco, announced yesterday
that he was stepping down as chief executive of the troubled financial
services company. He said he would stay on as chairman, however. Conseco did not name a new chief executive, but said that
William J. Shea, the president and chief operating officer, would be in
charge of the company's negotiations with creditors to restructure its
$6 billion in debt. Mr. Wendt's tenure as Conseco's chief executive lasted a
little more than two years. Having gained a reputation as an outstanding financial
executive when he ran GE Capital, Mr. Wendt's hiring cheered investors
in 2000, even though his contract was among the most valuable ever given
to a new chief executive. The stock price leaped almost 50 percent, to
$11.38, on news of his hiring, and it climbed above $20 in the spring
of 2001 as Mr. Wendt issued a series of reports to investors that were
usually folksy and always upbeat. But in the end he could not turn Conseco around. The insurance
company had been built up by Steven C. Hilbert, who was ousted by the
board when Conseco ran into trouble after its acquisition of Green Tree
Financial, which specialized in the financing of manufactured housing. Shares of Conseco closed at 7 cents yesterday, up one-tenth
of a penny. Colin Devine, an analyst for Salomon Smith Barney and a longtime
critic of the company, said he expected Conseco to have to file for bankruptcy
protection. Mr. Wendt, however, was as upbeat as ever in the announcement
of the management change: "Our day-to-day operations are in the hands
of strong, capable leaders. Our management team, and in particular our
business unit leaders, are doing an exemplary job. We have great confidence
in them to keep the ship on course." Mr. Shea joined Conseco just over a year ago, having previously
been vice chairman and chief financial officer of BankBoston and vice
chairman of the Coopers & Lybrand accounting firm. When Mr. Wendt joined Conseco, he was given a $45 million
signing bonus, along with a promise of a bonus of $8 million to $20 million
this year, depending on the share price. He wound up getting the $8 million.
Conseco also bought an annuity for him that will pay $1.5 million a year
when he turns 65 in March 2007. That annuity, which will continue paying
Mr. Wendt and his wife until they both die, probably cost at least $22
million, Mr. Devine said. Mr. Wendt has quarreled with descriptions of his compensation
as generous, arguing that it merely repaid him for some of the retirement
benefits from G.E. that he forfeited by taking the Conseco job. While the company said yesterday it still hoped to reach
an agreement with its debtors, Mr. Devine said bankruptcy was almost a
certainty for Conseco by the end of the year. "They're not going to make it," he said. "They
have $6.5 billion in debt, and we don't think the company can be liquidated
for even $2 billion." Besides its big finance company, Conseco operates 15 insurance
subsidiaries around the country mostly dealing in life insurance, annuities
and supplemental health insurance. According to A. M. Best & Company,
Conseco is the 26th- largest life insurer in the country. Insurance regulators in several states have been closely
monitoring Conseco's financial woes. Mr. Devine said that regulators would
probably take control of the insurance operation if the company files
for bankruptcy protection. Insurance customers should "eventually be made whole,"
he said, but if regulators seized the insurance units, it might take as
much as eight years for policyholders to receive their money. As for investors in Conseco, Mr. Devine predicted "bondholders
will get some percentage of their money and equity holders will get nothing." Mark Lubbers, a Conseco spokesman, said that Mr. Wendt would
give up his $1 million annual salary and take the $50,000 annual pay for
outside directors. --------------------------------------------------------------------------------------------------- Majority of PayPal shareholders approve eBay merger By Bob Porterfield ASSOCIATED PRESS PALO ALTO – PayPal Inc. shareholders approved a $1.3 billion
merger with eBay on Thursday, brushing aside legal challenges to the deal
with the online auction giant. A majority of the company's 61.6 million outstanding shares
were voted in favor, and no one at the sparsely attended meeting voiced
the objections raised in lawsuits over the share price and patent infringement
allegations. The all-stock acquisition gives eBay control of the Internet's
largest purveyor of online payment services between individuals and businesses.
When the deal closes later this year, PayPal insiders will collectively
reap, on paper, nearly $600 million. For eBay, the acquisition should fatten an already bulging
bottom line. About two-thirds of PayPal revenues come from fees generated
by eBay auction transactions. PayPal has some 20 million registered users,
including 3.7 million business accounts. Since 1999, PayPal says it has
moved an estimated $10 billion through the online service. Under terms of the merger agreement announced last July,
PayPal shareholders will receive 0.39 shares of eBay stock for every share
of PayPal. EBay's offer valued PayPal at $23.61 per share on the day of
the announcement, a price touted by both companies as an 18 percent premium
above PayPal's market value before the merger was announced. Based on eBay's close Wednesday, PayPal stockholders would
receive $20.79 per share. EBay closed Wednesday at $53.30, while PayPal
closed at $20.75. In trading on the Nasdaq Stock Market, PayPal shares fell
53 cents Thursday to close at $20.22 while eBay shares fell $1.40 to $51.90.
If eBay stock remains near its current level, former PayPal
CEO Elon R. Musk will receive nearly $148 million worth of eBay stock,
while Michael Moritz, a director, and his investment firm, Sequoia Capital,
will collect about $111 million. PayPal CEO Peter A. Thiel will reap nearly
$58 million and the company's chief technology officer, Max R. Levchin,
stands to make $36 million. Their big payday was the catalyst for at least six shareholder
suits filed in Delaware and California seeking to halt the merger. Plaintiffs
in those cases claim the eBay offer was inadequate and they should receive
more. The California cases have been placed on hold pending a decision
in the Delaware courts. On another legal front, Bank One Corp., the nation's third
largest credit card company, sued PayPal in Delaware on Sept. 6 alleging
infringement of its patents on an electronic payment system. The merger may put eBay into competition with itself for
awhile since one of PayPal's major competitors is Billpoint, an eBay subsidiary
that processes credit card payments for online purchases. Analysts believe
eBay will eventually fold Billpoint into PayPal's operations. By Jeannine Aversa ASSOCIATED PRESS WASHINGTON – New claims for jobless benefits rose last week,
highlighting the difficulties workers and companies are facing as the
economy struggles to return to full health. For the work week ending Sept. 28, new applications for unemployment
insurance climbed by a seasonally adjusted 5,000 to 417,000, the Labor
Department reported Thursday. The increase was slightly larger than analysts
were predicting and followed a drop of 18,000 in the prior week. For six weeks straight, new claims for unemployment benefits
have been above the 400,000 mark, a level associated with a stagnant job
market. "The claims data thus point to a marked deterioration
in job conditions in late summer – but the deterioration so far is not
cascading as it would do in a recession," said Maury Harris, chief
economist at UBS Warburg. Separately, the Commerce Department reported that orders
to U.S. factories were flat in August, after jumping by 4.4 percent in
July. While the performance was better than the decline in orders forecast
by analysts, a more forward-looking report released this week suggested
that manufacturing is stalling. A third report Thursday showed activity in the service sector
grew at a faster than expected pace in September, providing a dose of
good news for the economy. The Institute for Supply Management said its nonmanufacturing
index, which mostly includes businesses in the service sector, rose to
53.9 in September from 50.9 in August. Analysts were expecting a reading
of 52. A reading higher than 50 signifies growth; a reading under 50 indicates
a contraction. "The solid bounce ... provides some hope that the economy
really is not turning south," said economist Joel Naroff of Naroff
Economic Advisors. Nonetheless, the overall labor picture looks weak. The more stable four-week moving average of new jobless claims,
which smooths out weekly fluctuations, rose last week to 423,000, the
highest level since early May. The number of unemployed people still collecting unemployment
benefits increased to 3.68 million for the work week ending Sept. 21,
the most recent period for which the information is available. That is
the highest level since the middle of June and suggests that not a lot
of hiring is going on. Because profits took a hit during last year's recession and
are still hurting, companies have been reluctant to make big commitments
in capital spending and in hiring, factors restraining the economy's recovery.
Economic uncertainties, including worries about a possible war with Iraq,
are weighing heavily on businesses, economists said. On Wall Street, the Dow Jones industrial average lost 38
points to close at 7,717.61. The unemployment rate was 5.7 percent in August and many
economists believe it climbed to 5.9 percent in September as companies
sought to control costs and keep their work forces lean. The government
was releasing September's employment report Friday. Some economists believe that job growth for the month will
be a mediocre 20,000. But others are predicting that businesses will actually
cut around 25,000 jobs. Consumers, whose spending accounts for two-thirds of all
economic activity, have been the main force for growth. Low interest rates,
rising home values and a refinancing boom that has left people with extra
cash have supported spending this year. That has helped to blunt negative
factors such as the stagnant jobs market, the uncertain stock market and
eroding consumer confidence. Some economists worry whether consumers will have the energy
to continue buying at a strong enough pace to keep the economy afloat,
especially if the job market were to worsen. The Federal Reserve has kept short-term interest rates at
41-year lows this year in an effort to spur consumers and businesses to
spend and invest more. Some economists believe the Fed might decide to
cut rates for the first time this year at its next meeting in November.
On the Net: Jobless report: www.dol.gov. Factory report: www.commerce.gov/ Institute for Supply Management report: www.ism.ws/ --------------------------------------------------------------------------------------------------- Fans should
give credit to Mariucci? Glenn Dickey, Chronicle Staff Writer DESPITE THE fact that the 49ers have come back from the dead
since the 2000 season to resume their place in the NFL elite, many fans
continue to call for coach Steve Mariucci's head. The chief complaint is that the 49ers should "open up"
their offense, throwing deep passes for quick scores, as the Rams did
the past three seasons. To have that kind of offense, a team needs what the Rams
have had -- a strong-armed quarterback, several fast receivers and an
offensive line that can pass protect long enough for the quarterback to
connect on deep passes. Does any part of that description fit the current 49ers? There is another way to approach the problem, with an offensive
scheme that exploits defensive weaknesses. When he coached the 49ers,
Bill Walsh did that in two obvious ways: -- Crossing patterns in which receivers such as Jerry Rice
and John Taylor caught the ball from Joe Montana in stride and ran for
significant yardage after the catch. Since then, after other offensive units adopted that strategy,
opposing defenses tightened up to tackle receivers immediately. Raiders
quarterback Rich Gannon caught the Tennessee Titans in a blitz and hit
a wide-open Rice on a slant pattern that went 75 yards, but that kind
of play rarely happens anymore. -- Against the "two-deep zone," in which two safeties divide up the field against deep passes and cornerbacks take the short routes, Walsh sent his tight end down the middle to catch a pass 25 yards downfield. Brent Jones, especially, made his career with that play. Some years back, though, when Tony Dungy was coaching at
Tampa Bay, he made a significant change in the two-deep zone. When the
ball is snapped, if the middle linebacker senses a pass play, he quickly
drops back into deep pass coverage, to take away the tight end route. If Walsh were still coaching, I'm sure he would come up with
a strategy that would beat these defenses. Mariucci is not Walsh's equal
on strategy, but almost nobody in the NFL is. Probably only Mike Shanahan
has an offensive mind comparable to Walsh's. Mariucci's strength, in addition to bonding with all players
not named Terrell Owens, is his flexibility. His first year with the 49ers,
when he had only rookie Jim Druckenmiller backing up Steve Young, he played
conservatively, limiting Young's passing to keep him healthy. The next year,
when the 49ers had an experienced backup quarterback in Ty Detmer, he
opened up the offense, and Young set personal and team records. Now, he's realistic enough to know what kind of team he has
-- and the direction the organization has taken. After the meltdown in the 4-12 season of 1999, the 49ers
knew they had to start with the defense in rebuilding the team. They've
done a remarkable job with that. The defense is very fast and still young
enough to have a significant upside. The pass rush seems much improved,
with Andre Carter as the focus, and this defense is capable of being a
dominating one. That cannot be said for the offense. Quarterback Jeff Garcia
has had two Pro Bowl years, but he has only one big-play receiver, Owens,
who receives double coverage on virtually every play -- and still drops
too many passes. J.J. Stokes is a reliable first-down receiver, but he's really
performing a tight end's function, without the blocking tight ends must
do. Tai Streets' injuries seem to have robbed him of the blinding speed
that originally made him such an intriguing possibility. The 49ers haven't drafted an offensive lineman in the first
round since 1987 (Harris Barton). Their highest pick in recent years is
center Jeremy Newberry, a second-rounder who's been a Pro Bowler. People
I talk to think the 49ers got a real steal in Stanford's Eric Heitmann,
a seventh-round pick in the last draft who will start in place of the
injured Dave Fiore and has a chance to be very good. In general, the offensive line is a patchwork group, made
to look better than it is by the coaching of Pat Morris and the mobility
of Garcia. The line does a creditable job of run blocking but its pass
protection is inconsistent. Given what he has, Mariucci's plan has to be to minimize
errors. Offensively, it makes sense to have Garcia roll out because he
throws well on the run and can run if necessary, to run the ball frequently
with Garrison Hearst and Kevan Barlow to control the pace of the game
and to just keep "moving the chains." It isn't spectacular but it's a winning strategy. 49ers fans
should be happy with that. E-mail Glenn Dickey at gdickey@sfchronicle.com (I’m not a Mariucci fan.
He is a PR guy who was only at Cal for not even a year. This should be an interesting game on Sunday—I’ll
be there to see who is the better coach: Mariucci or Martz. Although I am a 49er fan and the Rams are 0-4, I really don’t believe this is going to
be any blow out, and could go the other way, too. Leg of Lamb and Viader Merlot
at the tailgate. Editor ) http://www.leasingnews.org/archives/October2002/10-1-2002.htm#martz ------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------ E-Mail Removal Form: \http://65.209.205.32/LeasingNews/removalform.asp +++++++++++++++++++++++++++++++++++++++++++++++++ Subscribe, Unsubscribe, Make Changes E-Mail. You may subscribe
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