2003 is over and I think most of us are glad to see it gone. It has been a very strange two years in, not only the factoring industry, but also throughout the economy. Unlike many other economic cycles we have seen come and go in our great American economy, this cycle was not a matter of liquidity, but a matter of confidence. It started heavily with the dot-com bubble burst (how could we be so blind), then the 9-11 tragedy, followed by Enron, WorldCom and then the shenanigans over at Tyco., not to mention a war in Iraq. No, our economy was in the tubes simply because of a little thing called trust and confidence. What was safe? Who could we trust? Where was there a safe haven? For once, the old saying in the factoring industry "In the good times, it is good and in the bad times it is great" just did not hold true. Like a cancer patient on chemotherapy, many portfolios across the US dwindled to less than half of their former robust selves. New business was gaunt, hairy and ugly. Competition was tougher than ever with factors scrambling to replace the runoff and bankrupt clients. With the interest lower than it has been in 40 years, the banks held on to their clients and battened down the hatches. It was ugly and not a good time for us. However, we are Americans with the spirit of giants. We are back on the road to recovery and it feels good. Deal flow is up tremendously. Leading indicators say that 2004 will be a banner year for recovery. At the American Staffing Association convention a few months ago, there were a little over 2000 attendees which was over double from a year ago. Management Recruiter's International year end hiring survey for the coming six months says activity in the permanent placement industry is better in the coming year than since 1999. Economists all point to less unemployment, more manufacturing, etc… So, it seems that 2004 will be a banner year and aren't we all glad. It is my fervent hope that this has two effects on our industry. The first is that the deals may flow again and our portfolios will gain in strength as they should in a recovering economy. The other is the wholesale rate-cutting that competition and portfolio run-off has caused will stop. Our business is about risk -vs- reward. The reason that we charge what we charge is that we risk our money. When you have wholesale rate-cutting, the industry as a whole is severely damaged. It is essential that the reward is consistent with the risk taken. The credit card industry knows and understands this. You have not seen them lowering their rates to the same type of customers that are risky, because they know they have to make a return or falter. The reward must be worth the risk. So, my challenge to our great industry this year as we move forward; Sell the service your company has to offer. Don't cut the rates to get the business. In the end, you will only hurt yourself. Let the risk determine the rate, not the competition. In this manner, in 2005, you will still be around to say "What a great year 2004 turned out to be". Lastly, I would like to thank all of the industry for the strong support that you have shown for FactorHelp. We are here to assist your companies be more successful. We invite you to send us your press releases to shamelessly promote your company to the industry. Additionally, we have the latest news posted daily to keep you informed on the latest and greatest happenings in our industry. Come visit us for all of your needs. We are here for you; we exist for you. May 2004 be your greatest year ever and don't forget to have a good time and spend time with your families. They are the most important parts of our lives. David Rains, President FactorHelp, Inc.