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November 21, 2002
Headlines--- Pictures from the Past---1988---Millerbis
and Possehl Classified---Jobs
Wanted-Credit to Finance U.S.
Housing Starts Fall 11.4% - October 2002 Streamlined
Sales Tax Update--Dennis Brown, ELA Great
Christmas Gift---or Reward to a Colleague for business
or recommendation ITAA
---The New Customer for Equipment/Software Leasing Out
of 1,500 B2B, only 200 to Survive--Beth Cox, Internetnews.com Irwin
Financial Fourth Quarter Dividend HP
Reports Strong Profit 4th Quarter/Financial Services
up 5% Siemens
Fin. Services Names Lowry Fenton & Steven Taylor
VP's ###
Denotes Press Release New
Section Tomorrow---Recommendations ------------------------------------------------------------------------------------------------------------ Pictures from the Past---1988---Millerbis and
Possehl
1988 WAEL (Western Association of Equipment
Leasing President ) Ben Millerbis, CLP (left) of Pentech
Financial Services passes the gavel to 1989 President-elect
Jim Possehl, CLP of Republic Financial Corporation
during the Annual Business Meeting at Lake Tahoe Conference. Classified---Jobs Wanted—Credit to Finance Credit: Los Angeles, CA Over 15 years experience in Credit/Operations
with Small Ticket and transactions up to $500,000.00.
CLP, with excellent relationships with most major
lenders. Email:jonbh123@earthlink.net Credit:New York, NY. V.P.Credit & Collections w/23 years exp.looking
for a situation where I can utilize my varied &
extensive knowledge of credit/ collections/risk-management
& leasing. Email:rcouzzi@yahoo.com Credit: Mill Valley, CA Senior corporate officer with financial services
credit background. M and A, fund raising and workout
expertise. Email:nywb@aol.com Credit: Vista, CA +15 years experience structuring, underwriting,
and collecting leases to privately and publicly held
companies. Creative and results oriented. Proven ability
to achieve bottom-line results. Email:dkalitow@pacbell.net Finance: Lyndhurst, NJ CFO w/20+ years leasing/financing. Respected
by lenders/rating agencies full & fair financial
reporting. Outstanding record restructuring debt.
Adept at investor relations and mentoring people.
Email:joemcdev@aol.com Finance: Atlanta, GA Twenty five plus years experience in middle
market lease/ asset based/cash flow transactions.
Heavy banking and credit background, with particular
expertise in structure and negotiation. Email:brown235@bellsouth.net http://65.209.205.32/LeasingNews/JobPosting.htm ________________________________________________________________________ U.S.
Housing Starts Fall 11.4% - October 2002 Largest Drop Since 1994---except for the West “main concern looking forward is the potential
for disinflation (slow growth in inflation” US Government Report with Economic Forecast
Although starts fell 11.4%, to 1.6 million (SAAR),
the housing market remains much healthier than the
rest of the economy.
Single-family activity fell 7% (1.35 million
SAAR) from a very strong September number, while the
more volatile multi family sector fell 29%.
All regions posted losses except the West,
which was up a modest 3.6%. There were double digit
decreases in the Northeast (-18.8%), Midwest (-19.5%),
while the South (-14.5%).
Permits, an indicator of future activity, were
actually up 1.7%. Analysis and outlook: The housing market remains in good shape, thanks
to very attractive mortgage rates, continuing, albeit
slower income growth for most households, and price
appreciation of real estate. Mortgage rates (30 year fixed as reported
by Freddie Mac) have hit new historical lows seven
times this year, and now stand slightly below 6% at
time of writing.
And, the refinancing boom is supporting consumer
spending, partly compensating for the recent slowing
in income growth. Mortgage demand remains very strong, so lower consumer confidence
and a flat job market are not hurting demand for housing
yet. The main concern looking forward is the potential
for disinflation (slow growth in inflation - not to
be confused with deflation or an across the board
drop in prices).
The problem with disinflation is that firms
have little pricing power to recoup rising costs,
and if you have lots of debt, the burden of paying
it off becomes onerous. In such an environment, cost cutting, including
more layoffs, becomes the norm.
The problem is exacerbated by the fact that
we have too much capacity in most commodities (lumber,
panels, engineered wood products, steel, aluminum,
computers, chips, telecommunications equipment, ….). Furthermore, with the exception of a few countries
(Canada, South Korea, and a few SE Asian countries
including China), the U.S., even with slow growth,
is still the strongest of the major economies.
Most of Europe is either in recession or headed
there, while Japan is back in recession again. That means offshore economies won't provide
much help (e.g. export potential) for the U.S. economy
in the near future. In fact, most of the world will be shipping
as many products as they can to the U.S. to shore
up their economies. Looking forward, housing should continue to
be the main economic driver, although with each passing
month, the consensus forecast for 2003 drops a little.
The consensus (NAHB, RISI, and the big banks)
is now about 1.6 million total starts with 1.3 million
single family. The
key for the U.S. economy in 2003 is consumer spending
(as usual) because business spending isn't expected
to strengthen until 2004 according to most analysts.
The
"challenging business environment" means
the "jobless recovery" will probably continue
into 2003, and that means income growth will be weaker
than it has been for some time.
Furthermore, wealth loss in the stock market
will impact spending to some degree too.
Overall, consumer spending is expected to slow
next year, and that means weaker remodeling activity
too. Despite
all this, housing is expected to remain relatively
healthy, fueled by low interest rates and favorable
demographics. Furthermore, the mid term election results
should accelerate decision making by our Federal government,
and that may mean progress in favorable tax legislation,
homeland security, and other matters that impact consumer
(and business) confidence which is needed to support
consumer spending.
from Carl Villella,Jr , CLP Onyx
Capital Corporation CVillella@msn.com -------------------------------------------------------------------------------------- Streamlined Sales Tax Update - Implementation
Questions & January Meetings Dennis
Brown, Equipment Leasing Association Issues covered in this update are: Questions About The System SSTP Meets In January NCSL Task Force Meets In January Questions About The System http://www.leasingnews.org/articles.doc/newsletter9.htm The Executive Committee of the Streamlined Sales
Tax Project has requested questions from the business
community relating to implementation and administration
of the new sales tax system. Steve Kranz at the Council On State Taxation
(COST) has agreed to compile these issues for submission
to the Project. Please forward issues you wish addressed to Steve Kranz at SKranz@statetax.org As stated in a previous update, questions that
arise about the system could fill billboards with
12-point type. Some examples of the concerns expressed
by business are provided below. Please send your questions to Steve Kranz so
they can be presented to the Project. If vendors are held harmless for errors in the
system does the burden fall on the purchaser for penalties
on an audit? The audit process has not been defined. Will the system hire a 3rd party? What are the standards for a Model 1 Certified
Service Provider (CSP) contracted as an agent to perform
all sales tax functions for businesses volunteering
to join the system? As states debate the model legislation, who
will resolve questions that arise about specific provisions
of the Agreement? SSTP Meets In January The Streamlined Sales Tax Project (SSTP or Project)
will meet Thursday and Friday, January 23-24, 2003
in Tampa, Florida.
The sessions will begin at 8:30 am on Thursday
and continue until 4:00 pm on Friday. The agenda is being developed for distribution
by December 1. However,
it may include a special public session on Thursday
morning for those wishing to learn more about telecom
issues. The meeting will be held at the Hyatt Regency
Tampa Downtown, located at 211 North Tampa Street
about six miles from the airport.
A block of rooms has been set-aside for Wednesday
and Thursday nights (Jan. 22-23), and a limited number
of rooms are available for Friday and Saturday evenings. The rate is $93 single/$118 double plus tax.
Please make your hotel reservations directly by calling
813/225-1234; be certain to indicate you are part
of the FTA Streamlined Sales Tax meeting room block
to receive the appropriate rate.
The cut-off for making reservations is December
18, 2002. The registration fee for the meeting will be
$200. The
fee will cover breakfast and lunch on both Thursday
and Friday as well as the requisite breaks. You may register (and pay if possible) online
at http://www.taxexchange.org/meet/0103sales.taf NCSL Task Force Meets In January The National Conference of State Legislatures
(NCSL) Task Force monitoring the Project will meet
in conjunction with the NCSL Executive Committee in
Tucson, Arizona on Friday and Saturday, January 24-25.
The potential congressional linkage of Business
Activity Tax protections with the Streamlined Sales
and Use Tax Agreement drafted SSTP may be the primary
focus of their attention. Dennis Brown Equipment Leasing Association http://www.leasingnews.org/articles.doc/newsletter9.htm # ############################################# Great Christmas Gift---or Reward to a Colleague
for business or recommendation: Power Tools for Successful Leasing— the acclaimed book adopted for Equipment Leasing
Association workshops, and
on the recommended reading list for CLP and
CAUCUS certification programs, as well as Leasing News book recommendation. http://two.leasingnews.org/Books.htm Technology Leasing: Power Tools for Lessees--(c)
2002, the unique lessee focused book on the recommended reading list for CAUCUS certification. Both titles are available through year-end at
the reduced price of $59.95 each, with shipping and handling waived. Orders may be placed by phone (815.753.1116),
secure fax (630.365.5602) or email (phdleasing@fastmail.fm In addition, over 70 leasing websites and a
dozen leasing articles are available for complimentary download at www.leasingpress.com James M. Johnson, Ph.D. Graduate School, Northern Illinois University www.leasingpress.com Barry S. Marks, Esq. Berkowitz, Lefkovits, Isom & Kushner ITAA ---The New Customer for Equipment/Software
Leasing http://www.itaa.org/about/index.cfm Information Technology Association of America
(ITAA) web site. “With the market in 2001 spending over $800
billion, Information Technology (IT) is one of America's
fastest growing industries, encompassing computers,
software, telecommunications products and services,
Internet and online services, systems integration,
and professional services companies. Located just
across the river from the nation's capital in Arlington,
Va., ITAA today is the only trade association representing
the broad spectrum of the world-leading U.S. IT industry.
“The ITAA web site provides information about
the IT industry, its issues, association programs,
publications, meetings, seminars and more...plus links
to other valuable web sites. Enjoy your visit and
check back periodically because the industry is not
only fast growing...but fast changing. The ITAA Home
Page can be your best stop on the Internet for industry
news and perspective. It's also a great way to get
to know the Association and its many valuable programs.” Out of 1,500 B2B, only 200 to Survive By Beth Cox
Internet.com Of an estimated 1,500 B2B exchanges operating
in 2000, only about 200 will survive through 2003
if the current shakeout trend continues, according
to a new research study. The study, entitled "Shakeouts in Digital
Markets: Lessons from B2B Exchanges," tracks
what it calls the "amazingly compressed boom-
to-bust cycle" for Internet startups in B2B markets.
The research report was prepared by Prof. George
S. Day of the Wharton School of the University of
Pennsylvania and Pembroke Consulting President Adam
J. Fein. "Our study of eight industries found only
43 percent of independent B2B exchanges survived between
April 2000 and July 2002," said Fein. "B2B
exchanges thought they had a great value proposition
but actually misdiagnosed their advantage versus existing
ways of doing business." "One venture capitalist behind a prominent
industrial supplies B2B exchange was reluctantly forced
to admit: 'We thought buyers would want to surf the
Web for industrial supplies, but they had other priorities',"
Fein said. "This site was shut down after more
than $50 million had been invested." What happened to burst this particular portion
of the Internet bubble? "B2B exchanges were late movers -- not
first movers," Fein said. "They couldn't
replace longstanding relationships in the B2B supply
chain between customers and their distributors."
"B2B exchanges discovered that their greatest
competition was not other exchanges, but rather existing
ways of doing business," Fein said. "Business
customers are reluctant to disrupt systems that work,
even if those systems are costly or inefficient."
According to Fein a "first mover advantage"
versus another exchange was relatively meaningless
compared with the hurdle of competing against an in-place
system of buyers, wholesaler- distributors, brokers,
and other manufacturers. "Business customers care more about getting
the right product at the right time than about saving
a few incremental percentage points on price by perusing
an online site that lacks access to their preferred
brands," he said. "Only a handful of exchanges (and suppliers)
such as FreeMarkets (Quote, Company Info) ... have
capitalized on the breakthrough possibilities of the
Internet," Fein said. FreeMarkets, whose software has been hailed
for successfully enabling companies to save money
on goods and services by aggregating big orders and
purchasing online, recently reported its third-quarter
net loss narrowed to $3 million, or 7 cents a share,
from a loss of $7.9 million, or 20 cents a share a
year ago. Indeed, many B2B exchanges and related companies
are just gone, and others are hanging on by their
fingernails. Fairfield, Conn.-based General Electric
(Quote, Company Info) sold off its GE Global eXchange
Services B2B unit last June. And Goldman, Sachs at
one point bravely predicted a $1.5 trillion B2B playing
field in the United States by 2004. And VerticalNet (Quote, Company Info), for example,
once a player in the business exchange software game,
has recently seen its CEO and CFO step down and talk
is the firm is looking for a buyer, according to a
recent article at eMarketect.com. Pierre Mitchell, an analyst at independent research
and analysis firm AMR Research, goes on to say in
his VerticalNet piece that "companies are buying
tactically, and concerns about vendor viability indeed
loom large." Who will the winners be? Fein said that "our study identifies three
winning types of players: adaptive survivors who find
a protected niche by retooling their strategy for
re-formed markets; ... incumbents who acquire the
assets of pure-play companies at steep discounts;
and pure play start-ups that capitalize on their early
mover advantages in breakthrough markets." The full results of the study will be published in a forthcoming edition of "California Management Review," which is published by the Haas School |
