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Archive for October 5th, 2009

Let’s Not Do What Winston Did

Thanks to our man on ground in the Triad, Sam Hieb, I’m dubbing Winston-Salem’s new taxpayer-built minor league baseball stadium Woulda Coulda Shoulda Park. What was supposed to be a $22m. 5500-seat stadium with $12m. in city money has ballooned to a $48m. confusion with taxpayers providing $27m. of that.

Is anyone in Uptown Charlotte paying attention?

Over the summer there had been whispers that the projected cost of a 10,000 seat Uptown park for the Knights might slide down from the $60m. price point given the weak economic conditions. If Winston is any guide, no. A stadium half the size being built in the teeth of one of the great construction corrections in history is right at $50m. The prudent number for a new Knights stadium then should be $75m. — more or less exactly what the new AAA park wound up costing Gwinnett County outside of Atlanta.

Keep that in mind when baseball talk heats up again after the November elections.

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BofA’s Darkest Day Still Ahead?

As Uptown bagman Mac Everett winds up some charmingly incoherent praise for Ken Lewis and Bank of America on WBT this AM, time to cut the crap. Enough of the local obsession with who will replace Lewis rather than bigger issue of what kind of institution will they run.

Let’s start with the big picture. September’s employment numbers were sobering — at least to anyone not already drunk on “recovery” Kool-Aid. With 25 million un and under-employed workers out there, a massive pull-back in consumer credit from zombie banks, where exactly is the money going to come from to drive corporate earnings? To make big ticket purchases? Who leads this supposed recovery? The Fed?

That is the macro. Now consider BofA’s place within it. For that look to Chris Whalen and Institutional Risk Analytics which just published a scathing critique of Lewis and BofA. Whalen notes that the bank still has a massive hang-over from both Countrywide and Merrill. Countrywide’s fantasy home-equity loans remain an acute problem despite BofA racing to redo them.

Whalen also points out that the chronic and sometimes out-right fraudulent under-collateralization of securitizations over the boom years still must be dealt with by BofA, and Wells for that matter. He sees tremendous vulnerability there over the next 12 to 18 months. In other words, forget about recovery or “normalcy” in analyst talk in the near term. Instead gird for another full-on banking crisis into 2011.

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