How To Destroy A Bank

DAILY KOS

Sat Mar 12, 2011 at 02:17 PM EST

How To Destroy A Bank

by Stranded Wind

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37 Comments

So yesterday we learned that Scott Walker’s biggest funding source is a group of executives from Marshall & Illsley Bank. Two union firefighters withdrew nearly $200,000 of their own savings and Wisconsin voters joined in, removing nearly $600,000 before the branch near the Capitol was closed to avoid a run. Hovering in the background are union pensions with nearly a billion in assets at this bank. Nationally unions have a trillion in investments.

Rather than contrition after being found to be an accomplice in Scott Walker’s robbery of the Wisconsin voters last night the bank has added insult to injury with their response.

So, without further introduction, let’s investigate just what steps need to be taken in order to crash this financial institution.

Banks in America purchase insurance from the Federal Deposit Insurance Corporation. During good times there are a steady trickle of banks that make fatal mistakes. The FDIC swoops in on a Friday, they take control in a well organized process, and the banks reopen the next Monday with someone else operating them. Nobody under the $250,000 limit loses any money, a few branches close as the acquiring operation integrates, and most of the employees continue doing their same job. The shareholders are wiped out and the executives are removed.

This situation is even sweeter for us, because this bank is in the process of being sold. Minnesota’s Public Radio has all of the details, but it’s something only a bank regulation wonk could love, so I’ll try to paraphrase.

The Canadian bank(Bank of Montreal) agreed to buy preferred shares that the U.S. government acquired as part of its bailout of the Wisconsin lender. The transaction is expected to close before July 31.

This is not a done deal. We can get in the middle and wreck it.

Marshall & Ilsley has posted eight straight quarterly losses while Bank of Montreal has reported six consecutive quarters of profit growth, a recent streak unmatched by Canada's five other large lenders.

Bank of Montreal is paying 1.26 times revenue, less than half the 3.17 times revenue for the average purchase of similar- sized U.S. banks, according to Bloomberg data.

Bank of Montreal is a well run operation. Marshall & Illsey is not. This is a distress sale.

Oh, and what’s this? Union busting dirtbag CEO Mark Furlong will REMAIN in charge of the U.S. sided of the operation? You don’t say ...

"We will be a formidable competitor together," Furlong said in an interview. "It gives us a wonderful market share in the Midwest and an opportunity to continue to build that market share through acquisitions and through internal growth."

Bank of Montreal's purchase makes sense in the long term, even though M&I won't show a profit for 18 months to 24 months, Bove said.

Someone needs to hunt up analyst Richard Bove, an uninvolved third party who was called for comment on this merger, and see what he thinks of their chances now.

I know just a little bit about banks but I have been through a couple of bankruptcies of publicly held companies. And the judge will look at all expenses for six months prior to filing. Expenses like … undeserved and unearned bonuses for sleazy executives.

Here’s information on Mark Furlong’s salary. And this turd will get $18 million even if he’s fired.

Unless the rules on banks are similar to the rules on public corporation bankruptcy. If we do this right this guy walks away with nothing. Except a gigantic mountain of shareholder lawsuits.

There are two things not to love in this strategy. The first are the 6,000 employees of M&I in Wisconsin, 5,900+ of whom are just like you and me - people with kids and mortgages and stuff who will make over the course of their entire life just a tenth of what Furlong makes for getting fired. I don’t see a way to get at the executives without this collateral damage.

The second is the harm done to small business. When a bank is under stress there are margin calls, operating loans don’t get renewed, and so forth. I would hate to take a hammer to this bank and end up whacking a mom & pop hardware store in the process. Again, I don’t see a way to get at the executives without taking a risk like this.

Mr. Furlong, I’d just like to say ...

Fri Mar 11, 2011 at 10:37 AM EST

UPDATED! We're Going To Destroy A Bank

by Stranded Wind

Ladies and Gentlemen,

M & I Bank of Wisconsin has committed an unpardonable offense. This bank took bailout funds and thanks to the magic of Citizens United our own tax dollars flowed through their executives hands into the coffers of Scott Walker's gubernatorial campaign. We haven't dug deeply yet, but I think when we do we're going to find that we no longer have Russ Feingold's voice in the Senate because of this as well.

The mainstream media isn't covering it, but I'd like to show you a few images of what poetic justice looks like ...

(UPDATE 3 - M&I has made a weasely statement. I've placed it at the bottom of the diary)

What these pictures show are six hundred ordinary citizens descending on the M&I branch near the Wisconsin Capitol after learning of their purchase of the gubernatorial election last November. Two firefighters with old school ideas about saving had over $600,000 between the two of them and they demanded cashier's checks on the spot.

Not everyone has the purchase price of a couple of homes sitting in the bank, but if the 60% of Wisconsin that's sick to death of Scott Walker's behavior simply go close their accounts the bank will crash and they'll have stripped him of the funds he needs to fight the recall next January.

A couple of people have the documentation and my money is on @Karoli over at Crooks & Liars getting the job done first. I'll come back and post the first good piece I see. I'm trying to get this out and keep it tidy - look in one of the comments and I'll provide some of the links the researchers sent me, so those inclined to do their own digging can get started.

You know what really chaps my ass here? All week we've been seeing Tea Party trolls saying "It's not fair that public employees take our tax dollars and use them in elections."

On behalf of all of us who work for a living, unlike those fools with their misspelled signs being bussed around by Koch Brothers I'd like to say ...

UPDATE #1

According to this other rec list diary Bank that funded Walker, now closed, the specific branch near the Capitol is closed to avoid a run and the amount withdrawn by the firemen was only $192,000. I think that means random citizens pulled another $400,000 out on their own.

Looks like Susie Madrak over at C&L got to them first with Wisconsin Unions Call For Boycott Of Local Bank Over Walker Support, Withdraw Funds

OK, here is a fine link on who needs a spank over all of this - Scott Walker Watch's Boycott list. Spread this far and wide.

They have a Facebook page for Boycotting Scott Walker Contributors as well.

UPDATE #2

Per Jake's front page piece there is now a campaign to hold this bank and its executives accountable.

And I have provided the CEO, Mr. Mark Furlong with a nice bit.ly present so we can refer to him in shorthand.

UPDATE #3:

The bank in question, Marshall & Ilsley, issued a most unimpressive statement.

MILWAUKEE, March 11, 2011 PRNewswire -- M&I Bank (M&I) today issued the following statement in response to a letter it received from a union group threatening to boycott M&I if M&I does not publicly oppose Governor Walker's budget repair bill.
M&I has not taken, and will not take, a position either for or against the budget repair bill. As M&I has publicly stated before:

M&I has not contributed to any candidate and did not contribute to Governor Walker or Mayor Barrett in the last gubernatorial election.

M&I has over 6,000 employees in Wisconsin, and, in the great tradition of political freedom in this country, those employees have the right to contribute to the candidate of their choice.

M&I employees contributed to both Wisconsin gubernatorial candidates in the last election.

M&I is proud of our tradition of standing with teachers, nurses, police officers, fire fighters, and other dedicated public employees to support, improve, and grow Wisconsin communities. M&I has 188 branches in cities, towns, and villages throughout Wisconsin, and M&I employees work side-by-side with these dedicated public employees in civic endeavors across the state.

So, it wasn't the bank, it was the sleazy executives. So, when do we see copies of their pink slips?

Here are some funny activists at the M&I headquarters in Milwaukee ...

This is just silly but quite apropos ...

Originally posted to Stranded Wind on Fri Mar 11, 2011 at 10:37 AM EST.
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* Labor
* Organizing
* protest
* Recommended
* Scott Walker
* Wisconsin