Morgan: Charlotte faces a 'reset'

Chamber president and self-described city cheerleader Bob Morgan this week gave a candid appraisal of Charlotte's post-boom economy.

Local stockholders suffered from declines in share prices at Bank of America and Wachovia (now Wells Fargo), but the accompanying loss of dividends, Morgan said, has been "absolutely devastating."

"There is a tremendous amount of wealth - here yesterday, gone today - and we, the community, are still dealing with that reset," he says in a SNL Financial report released Tuesday.

"You have a lot of shareholders that are employees, retirees, investors, foundations and trust funds, and nonprofits and for-profits who have invested in these two organizations and the dividends are basically gone as part of the TARP."

The report, entitled "Rattling the Hornet's Nest," lays out in stark terms what Charlotte has working in its favor, and against it.

The pros:

• Lack of speculative run-up in home prices.
• Favorable demographics.
• A history of well-performing banks.

The cons:

• Increasing bad loans at Charlotte-based banks and thrifts.
• Decline in local wealth from hits to bank stocks.
• High unemployment.
• 
  
  High office vacancy rate.
  
  
  

Click here to read Nathan Stovall's full report.

In a separate story published the following day, Morgan offered another sober assessment.

Under the headline "This is the bust in the boomtown that banks built," the Washington Post quotes Morgan this way:

"I think there's a new humility to Charlotte," said Bob Morgan, president of the city's Chamber of Commerce. "We didn't worry too much about the things being done in Dallas, Atlanta, San Francisco," he said, when banks in those cities were swallowed by Charlotte's giants. "We are now living it ourselves."

- Doug Miller

Pay czar's letter to BofA

Top executives at Charlotte-based Bank of America will take deep cuts in compensation under determinations announced Thursday by Kenneth Feinberg (right), the independent master given the task of setting pay and stock levels for officials with companies getting the most funding from the federal government.

In a letter released Thursday, Feinberg cited the bank's initial pay proposals, which included a cash salary range of $700,000 to $950,000 for everyone but the CEO and stock-based salaries ranging from $2 million to $19 million for top employees who were at Bank of America in 2008 and 2009.

According to the letter, Feinberg capped cash salaries at "generally less than $500,000," with stock salaries reduced to $1.7 million to $9.3 million.

Read Feinberg's letter to Bank of America here (PDF).
You can read the letters to the other six "exceptional" companies here.

What do you think of the new pay rules introduced Thursday?

Suit: Palisades owes $347,288 for tournament

The company that runs the men’s senior tennis tour is suing the Palisades development over more than $350,000 in unpaid sponsorship fees, the Observer's Rick Bonnell reports.

The suit, filed Monday locally in federal court, says Rhein Palisades failed to pay any of the $347,288 owed InsideOut Champions Series for running last month’s tournament at the South Charlotte planned community.

The suit also says Rhein Palisades owes $10,250 in unpaid fees from the 2008 tournament.
Mike Boston, director of operations for the Tim Wilkison Complex at the Palisades, said via email Tuesday night he was unaware a lawsuit had been filed.

InsideOut has run a tournament at the Palisades each September since 2006 and is contracted through 2011. The eight-man fields have included Pete Sampras, John McEnroe and tour co-founder Jim Courier.

Click here to read the suit.

- Doug Miller

Story: Lewis secretly met with Lehman exec

In the race to save Lehman Brothers, Richard S. Fuld Jr., the firm’s chairman, reached out to Bank of America as early as July 2008, according to the book "Too Big to Fail," scheduled for release today.

Author Andrew Ross Sorkin, a New York Times reporter, gives this account of a secret meeting between Fuld and Bank of America's Ken Lewis, as excerpted in today's NYT story:

"To keep the talks alive after the session at Sullivan & Cromwell, Paulson and Geithner over the course of the next week arranged a secret meeting between Fuld and Lewis.

It would take place at a previously scheduled event on the evening of Monday, July 21, in New York. Paulson was being honored at a dinner at the New York Fed in Lower Manhattan, organized by Geithner as an opportunity for the secretary to get together with top leaders from JPMorgan Chase, Goldman Sachs and Morgan Stanley, as well as Fuld and Lewis.

As the dinner was ending, Geithner, approached Lewis and, leaning close, whispered, "I believe you have a meeting with Dick."

"Yeah, I do," Lewis replied.

Geithner gave him directions to a side room where the two could speak in private. He had apparently already given Fuld the same instructions, because Lewis noticed him across the room looking back at them like a nervous date. Seeing Fuld start to walk in one direction, Lewis headed in the other; with half of Wall Street looking on, the last thing either of them needed was to have word of their meeting get out.

The two men eventually doubled back and found the room. Fuld explained that he would want at least $25 a share from Bank of America to buy Lehman; Lehman’s shares had closed that day at $18.32. Lewis thought the number was far too high and couldn’t see the strategic rationale. Unless he could buy the firm for next to nothing, the deal wasn’t worth it. But he held his tongue.
Two days later, he called Fuld back.

"I don’t think this is going to work for us," Lewis said as diplomatically as he could, while leaving open the possibility that they could discuss the matter again."

- Doug Miller

Myrick: 'Muslim Mafia' infiltrating U.S.

U.S. Rep. Sue Myrick, has penned the foreword for a new book, "Muslim Mafia," warning of a Muslim conspiracy to support Islamic terrorism in the United States.

The authors, former Air Force investigator P. David Gaubatz and journalist Paul Sperry, lay out their investigation of the Council on American-Islamic Relations (CAIR), the Observer's Mark Johnson reports.

They charge that the group portrays itself as a civil rights advocate for Muslims but in reality has planted spies inside law enforcement agencies, placed staffers on Capitol Hill, arranged for its executives to meet with presidents, conspired with terrorists and placed jihadists in American mosques to preach hate.

Myrick, who has consulted with Sperry before on terrorism issues, writes that the authors provide proof through documents they uncovered and others recently declassified that radical Muslim agents of terror live among us and are "carrying out their subversive plan."

"America is asleep to the danger that confronts us," writes Myrick, a Charlotte Republican, "Since the 1960s there has been a concerted effort on the part of radical Islamists to infiltrate our major institutions. Front groups of terror now operate openly in our country, comprising a network of support for jihadists."

She concludes: "We Americans must wake up before it is too late!"

Click here for the books' link at amazon.com, where it is climbing the bestseller chart.

- Doug Miller

Is 'The Last American Hero' a first-ballot Hall of Famer?

Two legends collided when author Tom Wolfe famously chronicled NASCAR driver Junior Johnson in a 1965 Esquire article entitled 'The Last American Hero.'

The piece married Wolfe, a pioneer in the literary New Journalism style of reporting, with Johnson, the South's most famous bootlegger.

With Wolfe's status long affirmed by the establishment, now it's Johnson's crack at racing's official greatest honor.

Today, NASCAR Hall of Fame voters will gather in Charlotte to pick the first five inductees. The winners will be enshrined in the new facility, scheduled to open next May.

Observers agree on three first-ballot favorites: drivers Richard Petty and Dale Earnhardt, and NASCAR founder Bill France, Sr. They are among 25 nominees, which include Johnson.

Part of Johnson's legend came from the track: Hands-down, he's one of NASCAR's most successful drivers and team owners.

But the other part comes from his story, of running moonshine along the mountain roads of Wilkes County, about 90 minutes north of Charlotte.

Johnson's tale is well-known, in books and television shows, even an outdoor drama called "Moonshine and Thunder - The Junior Johnson Story." A 1973 movie shared the title of the Wolfe article.

Wolfe's Esquire piece explored how Wilkes County came to be known as the "Bootleg capital of America." At one point, Wolfe describes Johnson standing at his family's Ingle Hollow homeplace as he "motions his hand out toward the hills and says, "I'd say nearly everybody in a fifty-mile radius of here was in the whiskey business at one time or another."

Johnson, who served time for his role in the business, could say the same thing today.

Earlier this year, state agents charged Dean Combs, a former NASCAR driver and crew chief for Johnson, with making moonshine.

Agents and Wilkes County sheriff's deputies said they found a 300-gallon still in a shop building on property owned by Combs, 57. The still was behind a go-kart track near the North Wilkesboro Speedway, not far from Johnson's home.

But that's where the parallel journeys of Johnson and Combs end.

Shortly after the raid, court records show, Combs pleaded guilty to possession of non-tax paid alcohol and making alcohol with a permit, both misdemeanors. Other charges were dismissed.

Recall what happened to Johnson, now 78. In 1956, after federal agents caught him working his father's Wilkes County still, he was sentenced to two years in federal prison in Ohio.

If Wolfe had a vote today, he might remind NASCAR's Hall why that's reason enough to pick Johnson, a man with a story from another time:

"And the Detroit P.R. men themselves come to the tracks like folk worshipers and the millions go giddy with the thrill of speed. Only Junior Johnson goes about it as if it were...the usual. Junior goes on down to Atlanta for the Dixie 400 and drops by the Federal penitentiary to see his Daddy. His Daddy is in on his fifth illegal distillery conviction; in the whiskey business that's just part of it; an able craftsman, an able businessman, and the law kept hounding him, that was all. So Junior drops by and then goes on out to the track and gets in his new Ford and sets the qualifying speed record for Atlanta Dixie 400, 146.301 m.p.h.; later on he tools on back up the road to Ingle Hollow to tend to the automatic chicken houses and the road-grading operation. Yes."

- Doug Miller

New magnet for East, McClintock, Rama?

CMS has rolled out a new option for bolstering enrollment at East Mecklenburg High when a boundary change takes effect in 2010: Create a new science, technology, engineering and math magnet for East Meck, McClintock Middle and Rama Road Elementary.
It's the latest twist in a quest to balance enrollment that has hundreds of residents mobilized. CMS posted the new option for East Meck today, along with options to relieve crowding at Eastover Elementary that were unveiled at a community meeting last week.
Read the newest reports here.
The school board will discuss the latest round of options at its Oct. 27 meeting and plans to vote on Nov. 10.
--Ann Doss Helms