So long, Merrill Lynch and Lehman Brothers
Wake up and good morning. Holy Darwinian poker game! Bank of America's $50-billion all-stock deal to buy Merrill Lynch is the equivalent of a desperate Lehman Brothers being left at the altar and losing a rich partner to her bigger sister. Out of rescue options, with a federal government apparently no longer willing to bail out big firms in trouble (Was it the right call? Consider this), Lehman early this morning announced plans to file for Chapter 11 bankruptcy protection. Here's the company's statement. Lehman's fall from grace was brutally fast. Until June, it had never even reported a quarterly loss as a public company.
Farewell, too, to an independent Merrill Lynch, now to become part of the juggernaut that is Bank of America. Here's Bank of America's announcement of the deal. Remember, this is the old North Carolina National Bank that absorbed about a bazillion financial institutions in the past two decades including Bank of America itself (and taking its name) and Florida's biggest-ever homegrown bank (Barnett Banks) -- in the process becoming a dominant banking force throughout the state of Florida. Consider this twisted logic. Without a hefty Bank of America in Florida, Adelaide "Alex" Sink would never have gained so much statewide influence when she was BofA's Florida president. And without that feather on her resume, she may never have been elected chief financial officer for the state and (dare we say it) fueled the chatter of her ambitions for governor or senator. How's that for a reach?
What's this, some federal sanity at last? The government on Sunday said departing Freddie Mac and Fannie Mae CEOs will not get the golden parachute payments in their contracts. Fannie's Daniel Mudd and Freddie's Richard Syron were eligible to get a total of up to $25-million, an amount that had come under heavy criticism by Tampa Bay area residents, among others, as the government took over the financially battered mortgage giants. That takeover, which occurred a week ago Sunday, dumped trillions of dollars of risk directly onto taxpayers' shoulders.
I would be remiss in not paying tribute to Bill Castoro, who passed away recently. Bill served for an amazing 37 years as the executive director of the Pinellas County Industry Council, the county's chief economic development arm. Among many projects he helped make happen, Castoro worked to convert the old Department of Energy/Martin Marietta nuclear trigger plant into what is now the Young/Rainey STAR Center used as a startup facility for high-tech businesses. Here's what long-time area observer Carlen Maddux, editor and president of the Maddux Business Report, said about Castoro: "I remember the day when I told Bill as a business writer at the St. Petersburg Times not to call me again about a new company coming to Pinellas unless there were a minimum of 250 employees involved. It was truly a golden era for economic development here." Well, we eagerly await the return of, if not golden, at least the bronze era. And thank you, Bill, for all that you did.
-- Robert Trigaux, Times Business Columnist