Will BofA's Lewis survive shareholder backlash?

Wake up and good morning.

Florida's state pension fund is joining the ranks of Bank of America investors eager to take a whack at BofA Chairman and CEO Ken Lewis, the human punching bag, and the entire board of directors at BofA.

The Florida State Board of Administrationplans to oppose the re-election of Lewis as BofA chairman and support a proposal that would split the chairman and CEO roles. The Florida pension fund thus joins the State Teachers Retirement System of Ohio, teachers' pension fund TIAA-CREF and public funds in New Jersey, Connecticut and Illinois in advocating for a boardroom makeover at the nation's largest bank by assets, says the Wall Street Journal, and a dominating bank in the Florida market. (Lewis photo: St. Petersburg Times files.)

The critical vote takes place Wednesday when the banking company holds its annual shareholder meeting. Much of the controversy stems from last week’s release of testimony from  Lewis toNew York Attorney General Andrew Cuomo in which Lewis says he was strong-armed by former Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke to seal the deal to buy Merrill Lynch without telling his shareholders about the brokerage’s mounting fourth-quarter losses, which came to $15.4 billion.

So much for transparency by the government, or for CEOs who say they always keep their investors' interests in mind but prefer to keep their cushy jobs. This government-big bank melange is one big conflict of interest, to say the least.

Is Lewis in danger of losing his job? He's still three years away from the traditional retirement age of 65. And he has not identified a possible successor, a source of criticism from corporate governance watchdogs. Should Lewis lose his job in the short-term, reports BofA's hometown newspaper, the Charlotte Observer, the top internal candidates include Brian Moynihan, who runs global banking and wealth management; Barbara Desoer, who heads mortgage and insurance; and chief financial officer Joe Price. Outside candidates who may be in the mix include two former Bank of America chief financial officers: Jim Hance and Al de Molina.

 (DeSoer, by the way, was busy this weekend overseeing the start of the removal of the Countrywide Bank signsnationwide. BofA bought the big mortgage lender, whose name is considered tainted and no longer worth using.)

So, again, is Lewis' job really up for grabs? Three major proxy advisory firms – Glass Lewis & Co., RiskMetrics Group and Egan-Jones Proxy Services – have told shareholders to vote against re-electing Lewis. Reports the Observer:

"Political and labor groups, who say their position as taxpayers gives them a say in the bank's operations, plan to protest at bank branches Tuesday (Venture blog is interrupting here to note that Florida shows little if any participation in these protests) and are collecting petitions for the Treasury that say, 'Replace the leadership at the bailed-out banks, starting with Bank of America CEO Ken Lewis.'

"But Bank of America is mounting its own campaign. This year, it has hired two proxy solicitors to help with the vote. Georgeson Inc. and Laurel Hill Advisory Group help companies reach out to institutional shareholders and activist groups, provide advice on strategy, and canvass investors to try to persuade them to vote with the bank's recommendations."

So, a final time: Is Lewis' job in peril at the shareholder meeting? When was the last time you saw the CEO of a giant corporation taken down by a shareholder vote? It's rare. Lewis, in my opinion, will survive Wednesday's votes. But his clout, already diminished in this Merrill Lynch merger mess, will never be the same.

-- Robert Trigaux, Times Business Columnist 

At deadline, Colonial Bank finds Ocala rescuer

Down to the deadline we go... Colonial Bancgroup, a Montgomery, Ala., banking company prominent in the Tampa Bay area, skirted disaster yesterday by cutting a deal with a privately-owned Ocala mortgage banking company to invest $300 million in the struggling regional banking company.

Federal and state regulators had given Colonial until yesterday, March 31, to find more capital or face dire consequences, including a possible sale to another banking company.

Colonial's stock had dropped to an astonishing low of 29 cents in early March. It now trades at 90 cents a share -- hardly a comeback for a large bank to still trade under a buck, but definitely back from the brink. Exposure to Florida’s real estate collapse put Colonial in the red last year, losing $880.5 million.

The Ocala savior of Colonial Bancgroup is Taylor, Bean & Whitaker Mortgage Co. which agreed to make a $300 million equity investment in the bank. Taylor Bean, whose chairman is Lee Farkas, is hardly a household name even though it is headquartered just north of the Tampa Bay area, but it claims to be one of the "top ten" national wholesale mortgage lenders. It is also a savings and loan holding company regulated by the Office of Thrift Supervision through its ownership of Platinum Community Bancshares, the parent of Platinum Community Bank, a federal savings bank headquartered in Rolling Meadows, Ill. Taylor Bean also has numerous area affiliates, including an insurance company and a business called Citrus Land Title.

For Colonial, Taylor Bean's rescue comes at a steep cost. First, Taylor Bean immediately becomes Colonial's 75 percent majority owner, which means the Alabama bank is now effectively controlled out of Ocala.

Second, Colonial -- which operates as a holding company of a commercial bank (Colonial Bank), will drop its bank charter and instead become a thrift holding company, in effect becoming apples to apples with Taylor Bean's existing thrift business.

And third, Taylor Bean also gets five seats on Colonial’s 15-member board and will have a say on five other board members, in collaboration with Colonial.

By attracting new capital, Colonial also met a separate federal deadline to qualify for $550 million in federal bailout or TARP funds. Colonial CEO Robert E. Lowder, in a press release, may win this week's award for understatement about a transaction that effectively saved Colonial:

"We are pleased to announce this proposed equity investment and to welcome TBW and the Investors as shareholders. This transaction should strengthen our financial position and allow Colonial to continue to offer its customers high quality banking services."

Colonial has 30 days to shop around for a better deal. If it finds one, it has to pay a $10 million termination fee to the investors, the release said.

-- Robert Trigaux, Times Business Columnist

Regulators: 27 days left to fix Colonial Bank

Wake up and good morning. While bank regulators are putting renewed heat on Alabama's Colonial BancGroup, whose Colonial Bank offices are scattered across Florida and the Tampa Bay market, the troubled banking company is reportedly reaching out to southern regional banks with a For Sale sign.

After writing a St. Petersburg Times column last month about troubled Colonial, readers emailed me saying as Colonial customers they had asked their bank branches about the concerns expressed in the column. The typical Colonial response: "The newspaper just decided to pick on us."

That column "picked" on Colonial, a $27 billion banking company in Montgomery, Ala. for a good reason. At that time, the bank company's stock had faded to an astonishingly low 59 cents per share. When a company's stock gets that low, there's little cushion left between 59 cents and zilch.

So what's happened to Colonial since then?  First, its stock is down again, by a third, closing Tuesday at 37 cents a share. And -- finally -- it's been disclosed that Colonial BancGroup is now operating under a "memorandum of understanding" with regulators as it tries to raise capital or find a buyer. According to an SEC filing this week, Colonial has an informal agreement with Alabama state bank regulators, the Federal Deposit Insurance Corp. (which insures Colonial deposits) and the Federal Reserve Bank of Atlanta (which regulates bank holding companies).

The goal? To shore up its balance sheets by the end of the first quarter of 2009. That gives Colonial just 27 days. And counting. What then? "Formal" regulatory orders or, possibly, seizure and a federally arranged sale to another banking company. Colonial CEO Robert Lowder is clearly on the hot seat to pull off a miracle.

As reported in the Birmingham Business Journal, the bank has more than 50 percent of its real estate assets in the troubled Florida market. It posted a fourth quarter net loss of $880 million and divulged that it must raise $300 million before it can cash in on the $553 million capital infusion of TARP (Troubled Asset Relief Program) funds being dangled out there by the U.S. Treasury Department.

Context: Plenty of other big banks have seen their stock prices drop. I mean, Citigroup is trading at a remarkable $1.22 and Bank of America is at $3.65. But aside from Colonial, none of the bigger interstate banking companies operating in Florida have stock prices under a dollar, much less under 50 cents.

Colonial has indicated in the past that a private equity firm, SunTx Capital Partners in Dallas, is considering a 24.9 percent stake. And the Wall Street Journal (subscription required), citing an unnamed source, says the bank "is talking to three other potential investors."

The Journal also reports Colonial also has reached out to larger Southeastern rivals -- including Atlanta-based SunTrust Banks Inc., Birmingham, Ala.-based Regions Financial Corp. and Winston-Salem, N.C.-based BB&T Corp. -- to ask about an acquisition. It's doubtful any of these three are looking to buy in such difficult times without extraordinary federal guarantees.

In the meantime, law firms smell blood because, they claim, Colonial deceived investors by failing to say it would receive federal TARP funds only if it first raised $300 million on its own. Like ants at a picnic, class action lawsuits are being launched by more than a dozen law firms from Donaldson Guin and Coughlin Stoia to Faruqi & Faruqi and Brower Piven.

That will get ugly. But what really strikes me is Colonial BancGroup, despite its go-for-the-gusto plunge into Florida years ago which has put it among the Top 5 in the state, has absolutely nobody on its board of directors from Florida. Go figure.

-- Robert Trigaux, Times Business Columnist

Cape Coral bank becomes latest economy victim

Wake up and good morning. A Cape Coral bank in Lee County south of Tampa Bay on Friday became the second Florida bank to fail this year amid a severe credit crunch and recession. Riverside Bank of the Gulf Coast was closed by Florida bank regulators. The Federal Deposit Insurance Corp., as receiver and to protect most depositors, then sold Riverside to TIB Bank in nearby Naples.

Before we go further with the failed bank, consider this. Four Florida banks have failed since last summer and every one of them has been located along Florida's gulf coast, from Cape Coral (near Fort Myers) north to Ocala. Nationwide, Riverside was one of four banks seized by regulators Friday, bringing the national number to 13 failed banks so far in 2009.

Back to Riverside's failure. Not all Riverside depositors are protected. TIB Bank will not assume $142.6 million in brokered deposits held by Riverside Bank. The FDIC said it will pay the brokers directly for the amount of their funds. Customers who placed money with brokers should contact them directly for more information about the status of their deposits, the FDIC said.

It's getting almost funny to hear so many top executives of about-to-fail banks say they have things under controls and are "just about" to cut a deal to bring in fresh capital and save the bank. It happened again this week at Riverside. According to a story in the Fort Myers News Press, Riverside Chairman Elmer Tabor told the newspaper earlier in the week that he was in the final stages of signing a deal to get an infusion of private capital.

“All in all, everything appears to be going well,” Tabor said at that time.

Apparently not as well as expected. Riverside's failure follows on the heels of the January 30 closing of Ocala National Bank. And in the latter half of 2008, two other banks also failed in Florida: Freedom Bank in Bradenton (not to be confused with Freedom Bank of St. Petersburg), and First Priority Bank in Bradenton. Before this flurry, the last bank to fail in Florida occurred in 2004.

Several other Florida banks that looked dangerously close to failure were sold with regulatory assistance to other financial institutions. So their names stay off the rolls of failures but still are indicators that Florida's struggling economy is claiming more banks in the Sunshine State than might be thought at first. Here are three examples:

1. Last month, a struggling Florida Panhandle bank called the Bank of Bonifay and its parent holding company, Bonifay Holding Co., were purchased by an Alabama insurance company called Protective Life Corp.

2. Insurance giant Hartford Financial Services Group agreed to buy troubled Federal Trust Bank of Sanford -- as long as the purchase entitles Hartford access to $3.4 billion from the government's financial bailout initiative, known as TARP (Troubled Asset Relief Program).

3. Coast Bank of Bradenton, one of the early Florida banks to get into real estate lending trouble, was purchased with regulatory blessing by a St. Louis-based banking company.

Due to the observance of Presidents' Day on Monday, Riverside's nine offices will reopen on Tuesday as branches of TIB Bank. Depositors of Riverside Bank will automatically become depositors of TIB Bank. There's more information here and here from the FDIC.

Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers of both banks should continue to use their existing branches until TIB Bank can fully integrate the deposit records of Riverside Bank. Riverside Bank of the Gulf Coast is not affiliated with either Riverside National Bank of Florida, Fort Pierce, or with Riverside Bank of Central Florida, Winter Park.

Want to check on the health of your own Florida financial institutions? The St. Petersburg Times has a helpful and interactive list. Click here for information on banks and here for information on credit unions.

-- Robert Trigaux, Times Business Columnist

Federal bailout, round two, for Citigroup

Wake up and good morning. Hardly a surprise after last week's drubbing in the stock market, Citigroup Inc. just got a mega-sized federal bailout, a deal to inject $20-billion into the troubled firm and to guarantee hundreds of billions of dollars in risky assets. It had to happen. Citigroup shares closed at a puny $3.77 on Friday and a market value of about $20-billion -- a value that has shriveled from more than $100-billion in a matter of a few weeks.

Hope this bailout works. We seem to have a habit of going back to the rescue trough over and over with these big financial firms. Witness insurance giant AIG, whose name has devolved to Always Insisting on Gimme's from the feds.

But here's the nasty underbelly: How can we gauge the depth of the broader problems when the stream of announcements of ever-growing rescues goes on and on? Drip. drip, drip. A little more and we're all under water. We gasped at the original size of the government bailout: $700-billion. Now the feds are committing (with the guarantees -- don't for get these) at least $300-billion just to Citigroup.

For those interested, here are the terms of the Citigroup bailout. And here's the now perfunctory statement of a big bank CEO, in this case Vikram Pandit of Citigroup, in announcing that it, too, is now owned in part by the U.S. taxpayer:

"This weekend, the U.S. government and Citi worked together in an unprecedented way to address market confidence and the recent decline in Citi's stock price," said Pandit. "We reached an agreement based on an innovative market solution to further strengthen our capital ratios, reduce risk, and increase liquidity. We appreciate the tremendous effort by the government to assure market stability. We are committed to streamlining our business and providing outstanding banking services to our clients around the world. We will continue to focus on opportunities and alternatives to further enhance the company's overall position and value."

Will it work? It better. Citigroup could not stem the bloodletting of its balance sheet on its own. There's a curve ball in all this, however. It's hard to instill fresh confidence in Citigroup when those running the federal bailout increasingly lack credibility. Citigroup may find itself tarred with the same doubts and, like AIG and Oliver Twist, be forced to go back cup in hand: "May I have so more, sir?"

A couple of early comments on the Citi deal here and here worth looking at, as well as this naked capitalism blog posting which points out the Citigroup bailout will lead soon to the GM bailout:

"I do not see how GM can be denied a rescue now (not that that outcome is really in doubt, merely how much pain will be inflicted on management and the UAW)."

Keep in mind. This is not the first but the second bailout infusion for Citigroup. This $20-billion cash injection by the Treasury Department will come from the $700-billion financial bailout package. The capital infusion follows an earlier one -- of $25-billion -- in Citigroup in which the government also received an ownership stake.

-- Robert Trigaux, Times Business Columnist

Will Citigroup become GM of banking?

Wake up and good morning. If the "Citi never sleeps" then how is it getting such a rude wake-up call? Perhaps the world's greatest icon of financial capitalism, New York's Citigroup Inc. is mulling the idea of putting itself up for sale. So says the Wall Street Journal this morning, which starts this way:

"Executives at Citigroup Inc., faced with a plunging stock price, began weighing the possibility of auctioning off pieces of the financial giant or even selling the company outright, according to people familiar with the matter."

Surely this is just talk, or maybe a "worst case scenario" that Citigroup's board is taking in the event of further stock swoons like Thursday's when already battered Citigroup shares drooped 26 percent. It was the worst one-day decline ever for the banking company. Worse, the fall occurred despite the announcement by Saudi Arabian investor Prince Alwaleed bin Talal bin Abdulaziz Al Saud that, in further support of the bank's management, he will increase his holdings in Citigroup Inc. to 5 percent.

Citigroup's shares sit at a puny $4.71 but this is still a company with a market value exceeding $25-billion. General Motors, for perspective, has dwindled to just $1.76-billion in market value. Says the New York Times this morning:

"Within the bank’s Manhattan offices, television screens have stopped displaying the company’s stock price. Traders have begun making jokes comparing Citigroup to the Titanic."

Are we really on the edge of such significant shifts in the American and even global economy? Sure, anyone paying attention is reconciled to the notion that GM, Ford and Chrysler will either disappear or be radically altered. But Citigroup? More than 3,000 people in the Tampa Bay area alone depend on Citigroup for a paycheck and a reason to go to work. But globally, this is one mega-sized company of more than 300,000 employees.

What's ahead? Here's what the Wall Street Journal says, boiled down to three points:

1. In addition to pondering a move to sell the entire company to another bank, executives are exploring the possibility of selling off parts of the firm, including the Smith Barney retail brokerage, the global credit-card division and the transaction-services unit, which is one of Citigroup's most lucrative and fast-growing businesses.

2.In Washington, Citigroup officials this week have been urging lawmakers and regulators to intervene by making it tougher for investors to place bets that the company's share price will fall, a strategy known as "short selling," according to people familiar with the matter. Banks are lobbying the Securities and Exchange Commission to reinstate the ban it temporarily imposed this autumn on short selling of financial stocks.

3. Citigroup's board of directors is scheduled to have a formal meeting Friday to discuss the options. CEO Vikram Pandit scheduled a conference call for 8 a.m. today to discuss the situation with senior managers.

Here's my take. The financial karma at Citigroup is atrocious these days. Whatever it touches lately turns to dung. Earlier this week, in yet another move to fix a rotting infrastructure, the company said it would buy $17.4-billion in assets from its structured investment vehicles, or SIVs. These are complex investment tools that first encountered trouble last year due to their mortgage-related holdings.

Remember, this is the very same corporation that cut a deal with the federal government earlier this fall to -- start the laugh track now -- "bail out" crumbling Wachovia Corp. (Wells Fargo eventually seized it from a wimpy Citigroup.) Imagine Citigroup's current plight -- and Florida's given Wachovia's No. 1 ranking in the state banking market -- had the Citi-Wachovia deal gone through.

How bad could it get? Ask Hugh Hendry, chief investment officer at hedge fund Eclectica Asset Management. As he told CNBC this morning: We're heading fast for a nationalized financial system  because the alternative is so much worse.

"All financials will be owned by the U.S. government in a year," Hendry said. "I bet you."

Now the cynic in me says that markets are being grossly manipulated by bears, day traders and short sellers who are driving worthy blue chip stocks down for big profits.

Like most folks, I have a theory, and like Hendry's prediction, it is just conjecture. The federal bailout plan essentially required the country's biggest banks -- Citigroup, Bank of America and JPMorgan Chase among others -- to accept billions in taxpayer dollars as emergency infusions to their capital. But it comes with some terrible and unintended consequences. It told investors worldwide that these banks can't cut the current crisis on their own. Maybe it sent a bigger message that a financial system awash with SIVs, GSEs and CDOs and too many other acronyms we apparently don't understand (and never did) is flawed.

And the leadership of the federal financial rescue plan -- including Treasury Secretary Hank Paulson, Federal Reserve Chairman Ben Bernanke and, increasingly scary, a waffling Congress? Well let's just say all these emperors wear no clothes.

-- Robert Trigaux, Times Business Columnist

Come on, throw your name in Treasury hat!

Pssst ... Want to be the next U.S. Treasury Secretary? Apparently there may be some room for a dark horse candidate. At a Wall Street Journal "CEO Council" gathering Tuesday, top executives in the audience were asked: Who should be the next Secretary of the Treasury?

Using electronic devices at their chairs, 93 CEOs responded (anonymously) to the question, according to a blog posting by the Journal from the event. Tim Geithner, president of the Federal Reserve Bank of New York, won a plurality of the vote with 37 percent of the CEOs. And the rest?

* 18 percent to Geithner's former boss, ex-Treasury Secretary Lawrence Summers.

* 10 percent to former Federal Reserve Chairman Paul Volcker, who frankly can do more good helping the Obama Administration think through its strategy than stand in front of a podium defending it.

Here's the clincher. "None of the above" came just one vote shy of Geithner, the Journal blog says, drawing more than 35 percent of the vote.

Okay readers: Any ideas for a stronger candidate to head Bailouts 'R Us?

-- Robert Trigaux, Times Business Columnist

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

Write your own federal rescue press release

Wake up and good morning. If these morning blog postings have a familiar ring, they do. Call it the calamity du jour. Let's make it easier. You can choose whichever underlined words make best sense to you in this first report. And yes, this is a spoof, folks -- it's Friday:

WASHINGTON -- The U.S. Treasury, acknowledging its (inability) (ham handedness) thus far to take control of the downward-spiraling economy, agreed Friday to (guarantee) (once again stick the taxpayer with) the (bad assets) (CEO golden parachutes) of every (U.S. corporation) (U.S. bank)) (oh heck, everybody everywhere) in an attempt to stabilize the (global stock markets) (presidential polls). "I am taking this action because our (demanding financial times) (sagging resume) (place in history) is under attack," said Treasury Secretary Henry Paulson. Added Federal Reserve Chairman Ben Bernanke: "It is time to bring some (sobriety) (Bud Lite) to our American party built on (debt binges) (predatory lending) (comatose regulators). It is the consensus of this Administration that guaranteeing our (free market system) (nationalized economy) is necessary to prevent further loss of (this financial crisis) (my job)."

Back to Oct. 10 reality now (I think). "U.S. officials are discussing temporarily backing all U.S. bank deposits if economic conditions continue to worsen, a move that would mark another unprecedented step as the government struggles to stem the sprawling  financial crisis." That's the front page story from today's Wall Street Journal. I have only one question. Who's going to guarantee the U.S. government? It's not a knee-jerk idea. Check out this analysis in the Washington Post today headlined "The End of American Capitalism?" We are, the analysis suggests, becoming the global example of comeuppance for national excess. Here's one view cited:

"Derivatives and hedge funds are like casino gambling," said South Korean Finance Minister Kang Man-soo. "A lot of Koreans are asking, how can the United States be so weak?"

Time to check in on the future of Wachovia. Watch for an official word sometime this morning that Wachovia  will, indeed, be purchased by Wells Fargo. That's the good news. Citigroup, which tried to buy some of Wachovia with FDIC backing, now seems willing to walk away, lick its wounds and demand damages (pay us, says Citi) in court. If this is an accurate if messy scenario, it will ultimately mean good things for Florida with the arrival of a new competitor in California-based Wells (a reasonably healthy one so far, one of the few) to the Sunshine State.

Some very good lessons for Florida in this USA Today story about the debate over Gulf Coast (Mississippi) communities rebuilding over and over in the wake of repeated strikes by hurricanes. Does it make sense? From the story:

"Locals and officials throughout the Gulf Coast continue to press for more stringent building requirements and stronger levees and floodwalls to prevent floods. But some coastal analysts argue that coastal erosion is growing too fast and some Gulf Coast towns need to depopulate and move to higher ground.The debate could be repeated in coastal communities in Florida, Louisiana, Alabama, Mississippi and elsewhere throughout the USA, said Robert Young, professor of coastal geology at Western Carolina University.

"It's hard to see how the federal government can continue pumping billions of dollars in protecting coastal communities. At some point within the next two decades, some of these vulnerable communities may need to relocate."

An early warning for tourism? "The plunging stock market, big bank failures, falling home values and other scary economic news could signal trouble for travel," says this USA Today report. I'm not convinced Florida's tourism industry is in too much trouble. Gas prices are starting to drop under $3 at some gas stations, which will ease some of the pressures on driving. And some tourist destinations are discounting heavily. Example: Cypress Gardens offers a special promotion for today, Oct. 10, and next Friday, and Oct. 17.  The first 10,000 visitors will receive admission into the park for just $10. Hey, it beats throwing $10 into the stock market these days.

-- Robert Trigaux, Times Business Columnist

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Hello? Get on with better Wells-Wachovia deal

Wake up and good morning. Amid the drumbeat of "who's in financial trouble now" how could we forget the fate of Wachovia, the North Carolina banking company that's got a No. 1 market share in Florida? Because the three players determining Wachovia's future -- Citigroup, Wells Fargo and, yes, the federal government -- are still thumb-wrestling over who gets what. Kind of like an early scene of carving up a Thanksgiving turkey. If you can recall through the fog of financial chaos, Citigroup agreed to buy Wachovia's banking assets (but not Wachovia Securities) with the generous backing of the FDIC. Days  later, Wells Fargo stepped up with a dramatically better offer: Buy all of Wachovia -- without FDIC backup. Citi protested and sued for $60-billion -- an absurd sum suggesting Citi's thinking with its ego, not its brain. Now the banks' lawyers are fighting and there may be resolution when the truce ends Friday morning.

“There are negotiations between Wells Fargo and Citigroup about a possible grand solution that would preserve the shareholder value for Wachovia as represented by the Wells Fargo deal,” Wachovia lawyer David Boies said during a teleconference. Such a deal “would involve not a single choice between Citigroup and Wells Fargo,” Boies said, without providing details.

Say what? Boies, you may recall is the lawyer who represented Al Gore in the controversial 2000 election recount in Bush vs. Gore before the U.S. Supreme Court. Hopefully, Boies will have better luck this time.

One thing is for sure. The pundits and analysts do not like Citigroup's approach to the Wachovia deal. This MarketWatch column slams Citigroup's recent history of "whatever it touches turns mediocre" and warns Wachovia would be next for the reverse-Midas touch. A Wall Street Journal opinion piece this week suggests Citigroup is smarter to call off its legal battle over Wachovia to prepare for bigger warfare ahead, including the possibility of a global banking recession, or worse. I agree. Besides, the FDIC (which is ultimately backed by the U.S. taxpayer) has an obligation to step away from guaranteeing Wachovia's bad assets when Wells says it will acquire them with no federal strings attached. Hello, FDIC, anybody home?

Here's another tale of a medical test apparently hitting the market before it's ready. The Food and Drug Administration warned clinical test giant Laboratory Corp. of America Holdings that it was marketing an ovarian cancer test in violation of the law, vindicating skeptics worried the $220 test wasn't ready yet. Here's the Wall Street Journal story about OvaSure -- and the concerns of Tampa's Rebecca Sutphen, a spokeswoman for the National Ovarian Cancer Coalition and director of genetic counseling and testing services at H. Lee Moffitt Cancer Center and Research Institute.

"When you make a test available, then people are likely to make decisions based on the test," Sutphen said. "Obviously, everyone is on the same page in terms of wanting such a test. But women may be using this information prematurely to make decisions, and the decisions may not be in their best interests."

On the financial bailout front, here what's one of Tampa's small business owners -- Maryann Ferenc owns and operates the fine dining restaurant Mise en Place and a catering event business -- thinks of the fed's giant rescue package, as reported by Business Week magazine. (I paraphrase). Suck it up, Wall Street, downscale your excessive lifestyle and toughen up. Not bad advice since we Floridians all have to do this at times! Here's what Ferenc actually says:

"As an independent business person for the past 23 years, there have been times when I had to close my businesses because of financial necessity," she says. "No one helped me, and I don't think they should. I had to change my lifestyle when I made decisions that were less than fabulous. But I learned a lot and came out on the other side a better business person. It's a good lesson for Corporate America to go through. People need to pay for their mistakes. We need to hold people responsible for the decisions they make. I am a Democrat and a strong one, but I do not like to see us bailed out."

--Robert Trigaux, Times Business Columnist

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