Banking's overhaul gathers momentum
Wake up and good morning. Since it's Columbus Day -- a salute to an explorer who left Spain well capitalized in search of new riches in a new world -- it seems only fitting to start with news of a Spanish bank looking to expand its turf in the United States. Spain's Banco Santander SA said today it's in advanced talks to acquire full control of Sovereign Bancorp Inc., a Pennsylvania institution hobbled by souring loans. Santander, you may recall, eyeballed Wachovia (check out the details on Wachovia's "silent run") closely before the bank eventually fell into the hands of Wells Fargo (a deal blessed Sunday by the Federal Reserve, that should close be the end of this year). Watch the AP news video and read the hometown Charlotte paper's take on Wells Fargo's challenges. Banco Santander has been seeking a bigger foothold in fast-growing Hispanic American markets like Florida, Texas and Arizona.
We care about this because the turmoil in the banking industry is only going to get more intense for awhile as regulators push banks to merge and continue to shut down others. Some area banks are also under pressure, as this Sarasota report suggests. The government is switching gears and, rather than focus on buying bad mortgage assets, now wants to invest directly in certain banks to shore them up. Is this a national bailout or a nationalized bailout? Or does it matter any more? Here's my latest print column in the St. Petersburg Times asking that question and more. What do you think?
All of this instability is not helping consumer nerves. Americans' confidence in their own financial security has tumbled alongside dizzying declines in stock prices and home values, according to a new Washington Post-ABC News poll. Less than half now believe they will have enough money to last through retirement, and two-thirds fear for their family's economic situation.
Finally, cheers to the Tampa Bay Rays dramatic comeback in Game 2 of the American League Championship Series. Rays owner Stu Sternberg is profiled anew in the New York Times this past weekend basking in the payoff in his long-shot investment in the Tampa Bay baseball franchise. Sternberg's still a season ticketholder for the New York Mets, we learn, but as Rays' owner he's also enjoying his one-thirtieth take of Major League Baseball’s Internet and television cash cows. Yet he still questions the viability of staying at Tropicana Field. And a new Forbes ranking lists the Rays as one of the "Top Ten" franchises most likely to move. As a business, a strong season like this one for the Rays will only enhance Sternberg's leverage for a new stadium -- somewhere. And if there's anything we've learned in this Wall Street crisis, leverage is a powerful tool.
-- Robert Trigaux, Times Business Columnist