Saturday, October 25, 2008

PNC musings

This will provide fodder for some time, but some interim PNC/NatCity musings.....

On the ground in Pittsburgh I know it seems like this is a case of the big fish gobbling up the smaller fish, but for sure National City was once the much larger institution. Go back a few years and suggest PNC was going to buy NatCity and you would have been laughed at for not predicting it would happen the other way around if anything.

Forbes has a short positive headline on it: PNC Does Good.

but the Financial Times suggests PNC had to have "beer goggles" on to consumate the deal.

PG does something I like to do and look at these types of stories from the other angle. In Cleveland they are clearly gnashing, but more interesting is to read through the voluminous comments on the Cleveland Plain Dealer's story. No real place for commenting like that here in Pittsburgh. The occasional political spasm over on BR may be an exception... but in general no local media outlet has really invited that kind of interactivity.

update: as of Sat afternoon there are over 350 comments on the Plain Dealer's site you can read via that link. Some are worth reading, but one shows sign of quickly getting to acceptance

And, hey, at least PNC's name is on the Pirate's ballpark, not the Steeler's stadium. :)
me: if the Dawg Pound accepts the deal, things are pretty bad up the road.

PG does go into the potential negative consequences of the deal. There are some issues for sure, though I am not sure it adds up to as much as the PG story would lead you to believe. One exception to that would be the negative impact on media advertising in town. Like the demise of Kaufmann's before it, this is just another hull shot on all local news enterprises. No more Nat City advertising needed and I don't think this will increase PNC's advertising demand much.

More media watching... Sunday's PG has a joint story written by both the PG and the Cleveland Plain Dealer on the PNC/NatCity merger. You know, it's no big secret that the PG owners would like to sell if they could. Maybe Newhouse Newspapers (publisher of the Plain Dealer) could buy the Post-Gazette and we could call it an even trade.

and on the bigger picture. Maybe capitalism really will survive all of this turmoil. I wondered if Jim Rohr had at least some unhappy thoughts about all the bailout money being spent on all the financial institutions in the country that were in such worse shape than PNC .. not even to imply PNC was in bad shape at all. It sure looked like folks were being rewarded for bad decisions and those who had weathered the storm were being left out. It must have seemed a bit unfair though to their credit I never heard a peep like that from anyone at PNC. But if the invisible hand has not been amputated, the PNC/NatCity deal shows that good may displace bad in the long run (with a little help by the not so invisible hand of big brother).


Anonymous johnny g said...

I may finally have to write a letter to the PG editor. I was appalled by the front page headline of a "loss" for Pittsburgh. The PG has the uncanny ability to find the sow's ear in any silk purse of business news for Pittsburgh. The headline is misleading at best--especially after you read the article and discover that its content does not support the very negative headline. Instead of such drivel, the PG should be running articles crediting Jim Rohr for leading PNC to the solid position it is in, preserving a great Pittsburgh institution, and, hey, becoming the hometown of the fifth largest bank in the U.S. PNC has only been eyeing NCC since March. Apparently not enough time for the PG to do some research and have positive articles canned.

Is it just that this region is so shell-shocked economically--still--that it can't accept good news?

Saturday, October 25, 2008 12:10:00 PM  
Anonymous Anonymous said...

I got 64% on my NCC fixed income yesterday. Yee ha!

Saturday, October 25, 2008 12:13:00 PM  
Anonymous Anonymous said...

johnny g you gotta be kidding. The predominant reason PNC is where it is stems from the Fed putting it on essential lockdown after the 2004 debacles. The only reason they don't have the problem IMO is they were not permitted to play

Saturday, October 25, 2008 1:19:00 PM  
Anonymous johnny g said...

Sorry, Anon.

PNC left the mortgage business in 2001.

Stop hatin' and start believin'!

Saturday, October 25, 2008 1:37:00 PM  
Blogger Bram Reichbaum said...

What were the the 2004 "debacles"? What was "lockdown"? Having asked these -- johnny g presents a very compelling case.

Is there not a window of opportunity opening up for, say, Dollar Bank?

Saturday, October 25, 2008 7:08:00 PM  
Anonymous Pittsburgh Bank Empire said...

There's a window of opportunity opening for a lot of smaller local and regional banks... PNC now has 53 local market share... a percentage of its new massive branch network will be sold off to Dollar, Northwest, S&T, First Commonwealth, etc.

Saturday, October 25, 2008 8:37:00 PM  
Anonymous AMD said...

No matter how you slice it, this is good, good news. Pittsburgh will be the HOME of a top 5 bank. No matter what you think of trickle down tax policy, trickle down employment is a definite reality. With a bigger bank come more executives, more middle managers, more related industries, more personal services industries. This is good all around.

The PG's problem is that, like most hidebound Pittsburgh institutions, they see this as their ox being gored (less local ad revenue), so therefore it must be bad news. I think this is great for all the Katz, Tepper, etc. grads who love Pittsburgh and want to work here rather than schlep off to NY, London, Vancouver. This is very, very good for this town; it just shows how the old guard like PG can't snap out of it.

Sunday, October 26, 2008 8:38:00 AM  
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