Comment and analysis on all things CharlotteRSS

Archive for April 24th, 2009

In Defense of Ken Lewis

Can’t believe I’m doing this….

As I’ve watched this story unfold the past few days it has progressed from tragedy, to comedy, to farce. For the SEC to come after Ken Lewis because the Bank of America CEO complied with the direct instructions of the US Treasury Secretary and the head of the Federal Reserve system would be lunacy.

You have to understand the midset of a banker — particularly that of Lewis during his run as head of BofA. Treasury and the Fed are the guidestars by which every banker steers his ship. If a federal regulator suggests changes to the color of the balloons in the lobby, a banker does not ask why, it just gets done. Same deal with loans, make more. OK. Done. And it has been this way for decades.

Then we have BofA, which for years before last fall’s financial meltdown cooperated closely with the Fed and federal regulators in expanding the availability of mortgage loans to “underserved” communities, for just one example. More pointedly, have we already forgotten Countrywide?

BofA took a $2b. stake in Countrywide in August 2007, months after federal regulators got a good look at the loosey-goosey bank’s books as Countrywide shifted to federal thrift status. By January 2008 Lewis was spending $4b. for a bank which ostensibly held $80b. in loans. Everyone understood what was going on: BofA was stepping in to help protect the feds, Fannie and Freddie especially, from exposure to Countrywide’s emerging toxic asset pool. Even Lewis admitted federal regulators had to be thrilled by the move, even though he steadfastly held the feds had not brokered the deal.

That official hands-off stance did not last.

Only nine-months later the feds were brokering bank deals left and right, matching up buyers and sellers, liquidators and the liquidated, often with only hours notice. In that environment Hank Paulson and Ben Bernanke tell Lewis they need him to buy Merrill and otherwise keep ML’s problems on the down-low.

What was Lewis supposed to do?

Read the rest of this entry »

Read full article » 10 Comments »

Big Cat Overpays Jake. By Millions.

Jake Delhomme just got a $20m. guarantee. And Jerry Richardson may have just crippled his franchise for years to come.

This move is eerily similar to George Shinn handing $100m. to Larry Johnson back in the heyday of the Hornets. The message the owners sent to the rest of their rosters, “This is my guy. The rest of you, not so much.”

There is a quaint bit of boldness in such moves that you admire, as well as the loyalty it displays in a normally cut-throat biz. But overpaying for talent — and not just by a little atta-boy number — kills any chance of working within finite salary caps to field the best team you can.

Besides, if you don’t think there isn’t more than a little Southern passive-aggressive “bless his heart” directed at Julius Peppers in Jake’s outsized deal you just do not get the role massive egos and damaged psyches play in this world. This coulda been you, the Big Cat is saying.

Right now the immediately impact is that the Panthers will likely have to shed talent and contracts elsewhere to be able to make Jake’s deal work. Yes, by putting more of his money in a signing bonus rather than salary the Panthers get short-term cap relief worth $2m. or so. But it is a five-year deal.

That’s why I wouldn’t be surprised to see Josh McCown move on. The guy now knows he’ll never start ahead of healthy Jake, no matter what. McCown got paid $4.5m. last year. You know who got paid less? Bills QB J.P. Losman.

See, this is why Charles Chandler and crew at the Uptown paper and Pat Yasinskas at S-PIN are foolish to dismiss a report from the official Bills site that the Panthers were sniffing around Losman. Losman was paid $3.3m. last year.

Read the rest of this entry »

Read full article » 2 Comments »

Latest Spin, It is an “Option” Not a Tax

Jennifer Roberts must’ve gotten word that local Tea Partiers were discussing the logistics of swamping the GovCenter with tax hike opponents. Check the wiggle room she constructed for Steve Harrison:

Commissioners may petition the N.C. General Assembly to allow Mecklenburg to levy an additional half-cent sales tax on top of the current 7.25 cents on every dollar. A bill approved by the House this week would allow several urban N.C. counties – but not Mecklenburg – to seek a transit tax.

“I may not vote to put it on the ballot (for voter approval), but why would we take away our option?” said commissioners Chairman Jennifer Roberts, a Democrat who placed the item on next week’s agenda.

Catch that? Roberts just wants the option to vote to put a tax hike on the ballot. Not that she would ever use it. This is brilliant. I am going to try that.

Honey, I want the option to date…yes, date…lingerie football players…yes, “those” women…not that I’d ever do SMACK!… OK, so that’s a no then? SMACK!

Local taxpayers should react the same way.

Bonus Observation: I think Harrison confused his Cookseys in this quote:

“I think the sales tax in Mecklenburg County is as high as it needs to be,” said Commissioner Warren Cooksey, a Republican. “If they need more money, they need to find it from a different source. It’s funny that when we were having this discussion (during the repeal debate), there was no indication there was a need for more money. It makes you wonder.”

Neil is the commissioner, Warren is the city councilman. And if I could slightly correct this observation, there were indications that CATS needed more money to build and operate trains, particularly the almost $100m. in tax-increment financing in the funding plan the MTC adopted for the North line.

Interestingly John Lassiter yesterday on BT declared that the plan all along had been to use TIF money exclusively to build the North. OK, would’ve been nice to tell voters that back in 2007, but in the here and now that means that two of the five trains in the 2030 plan — North line and streetcars — would be funded totally outside the existing half-cent.

In sum, then Roberts, Lassiter and company want a half-cent option to build a $1.12b. train to UNCC.

Update: Add City councilman Anthony Foxx to that list, per his comments a few minutes ago on WBT. Foxx too wants the “option” to levy the tax, not that we’d use it. To recap, that’s both candidates for mayor on the record supporting additional local taxes, er, options. Yay democracy in the QC.

Read full article » 7 Comments »
April 2009
« Mar   May »

You are currently browsing the The Meck Deck weblog archives for the day Friday, April 24th, 2009.

RSS Feeds


JLF Network Websites & Blogs