Tryon Street: The new Wall Street?
Most of downtown is walking around in a complete daze this week. In thirteen years of covering this city for Charlotte magazine, I've never seen anything like it. The mood swings have been unbelievable, starting on Sunday, when every BofA employee's BlackBerry likely lit up with the news that the bank had purchased Merrill Lynch. That story got some play in the national media, but the collapse of Lehman and the potential collapse of AIG dominated the headlines. Now comes word that Wachovia--yes, Wachovia, the same bank that fired its CEO and has a crazy-low stock price--is considering a merger with Morgan Stanley. If it goes through, and the combined company actually survives, then it's not too much of a stretch to say that the balance of banking power in the country shifts from Wall Street to Tryon Street.
Not in real dollars, of course. But BofA has already bought one of the nation's largest mortgage lenders (Countrywide) and one of the largest investment banks, assuming that deal works out. Now Wachovia, which at is current valuation would be a prime takeover target if anyone else had the cash to do it, could end up merging with another of the largest investment banks. And given that Wachovia is one of those boring retail banks, meaning it has cash deposits, it would likely rule that merger. Furthermore, Wachovia CEO Bob Steel is the real deal.
And of course the whispered fear is that all this could somehow reverse in the next two weeks. This has already been a nightmare of a rollercoaster ride. Everyone's stock is getting hammered. Who knows what the next day, the next ten days, the next 30 days could bring. But right now, it really looks like Charlotte's boring banks–you can still sense the condescension in the stories that come out of New York-based media–could end up on top of the heap. Of course, that heap is getting smaller every single day.