If I thought you had a million I would tell you

Marton

Not quite. The market collapse up to and including Thursday was not solely driven by short selling, though that did exacerbate the declines of some specific financial stocks. But the meltdown was also due to real "long" sellers panic selling their equity exposures as confidence collapsed and fear took over ie selling pressure from real investors, with long positions, panicking about the direction of financial stocks in particular but also the stock market in general. The ban on short selling did lead to short covering of bear positions which contributed to the rebound on Friday, but the biggest reason was the relief reaction to the announcement of the Fed rescue package which caused long sellers to pull back from the brink and dramatically eased off selling pressure. We're not out of the woods yet. You might as well as toss a coin as try and predict the direction of the markets at the moment. What is certain is that there'll be volatility until the details of the rescue package are announced. If the maret likes it, there'll be another relief rally which might last a few weeks before attention turns back to fundamentals. As Shorrick rightly pointed out fundamentals haven't changed. The package will only accelerate bank write downs and it's not all certain that it'll unblock credit markets, stimulate the economy, fend off recession or improve earnings outlook - all of which are negative for stocks. The psychology of the market right now is focussed on preservation of capital not return on capital which is why it's jittery to say the least.

This is an interesting read:

http://bstocksdev.weblogsinc.com/200...-ubs-bad-idea/

If I thought you actually knew the answer, I wouldn't have asked.

One should also take into account whether this package will or not consist mostly of newly printed money. Printing money doesn't generate nor preserve wealth. Ask Zimbabweans.

For what it's worth the Fed's balance sheet has started increasing.

.....don't believe anyone, spread your money across as many non-investment banks as you can up to THCF30k......i have it on very good authority that negotiations are already underway about a merger......there is more bad news to come from UBS.....much more......the amount of people pulling their money-out plus all the write-downs and the ENORMOUS amount of bad debt they have tied-up in the US mortgages.........don't expect UBS to remain as just UBS for much longer.......

Alas, I have nothing to offer "on good authority". But if you truly, truly believe that there is a realistic possibility that UBS would go under, you have to ask yourself the question whether you should be holding Swiss francs at all, anywhere. God help the country, the whole of the Swiss financial system, the broader economy and particularly the currency if that were to happen. Folks will be trampling on the swiss franc in the rush for the exit from the former "safe haven".

actually I think the company UBS span to run the write-downs will come good in 2-5 years (depending on this slump) and UBS in the worst case will drop IB and retain the Wealth and AM businesses which are relatively healthy.

Investment Banking as a business is likely to undergo massive changes globally and risk management is the area to be in if you want to take a nice ride. Albeit only if you know what you're talking about.

UBS has liquid reserves and is Basel II compliant. Yes, stock prices have taken a bashing but the company assets are significant.

Dear Mr. Laundry Man - you might want to inform your good authority that the amount of CHF 30'000 insured by account is insured from a collective non-obligatory non-statal plan that Swiss institutions adhere to.

I will then leave to the appreciation of your good authority and yourself to draw conclusions on the liquidity of said plan should one of its major participant institutions go under.

By the way, I know multiple full stop points are the "in" thing with traders now - but frankly I don't see what is so "in" about it.

Money market funds in the US suffered an estimated $197bn of net outflows last week... Only about 5% so at that rate global melt down is weeks away.

Marton

"We're at a financial crossroads"

The global financial sector is mired in its biggest crisis in decades. The situation in Switzerland is also critical, a banking expert tells swissinfo. Read more: http://www.swissinfo.ch/eng/news/bus...86505000&ty=st

From today's Swiss newspapers;
1. UBS N. America takes over team of Lehman bankers.
2. Kantonal banks claim big transfer of customers & cash from major banks again this year.
3. Rumoured HBSC will bid for UBS.

Still at the cross roads....

Marton

Those rumours have been around since the Spring...

The way things are at the moment though, it does look like pretty much anything could happen next

Yes, don't see anbody buying UBS any time soon - however stranger things have happened.
Actually the item about Kantonal banks said "people are flocking to us in droves". Probably somewhere between true & marketing speak

Marton

I go back to what I’ve said before. If Switzerland allows UBS to go bust then the days of Switzerland as a safe haven financial centre are over. What that means is Switzerland goes back to a nation of cuckoo clock makers and cheese producers. And it won’t matter how many swiss francs you have in your pocket or which bank you’ve put them in - the Swiss franc will be toast. Without the financial services industry it would be doubtful that the Swiss economy could survive outside the EU, the Swiss franc would in all liklihood disappear up it's own backside and believe me, you wouldn’t want the exchange rate you get for converting your swissies to Euro. Whatever the man in street is doing vis à vis transferring to kantonal banks, the “big money” wouldn't be walking accross the street to ZKB. They’ll go to foreign banks like Deutsche bank and HSBC ie banks outside the Swiss financial system. If you’re looking for signals of a systemic collapse in confidence and an imminent risk of UBS failing don’t look to the stock price - look for signs in the credit default spreads and FX markets. If having your money in UBS is stopping you sleeping at night then you should definitely move it but don’t think that if UBS goes down that you won’t be affected simply because you have your money in a cantonal bank. If UBS goes down what will matter is how many tins you've stored in the larder then how many vegetables you can grow. Nothing is impossible in this world but at the moment UBS is comparatively well capitalised having acted aggressively to write down the toxic waste quickly and to raise fresh capital, which it did easily. It also has diversified funding sources which Lehman, Bear Sterns, Merrill and Morgan Stanley didn’t. However, re a potential bid, what the dramatic collapse in the share price means is that UBS’s market cap is a third of what it was and therefore if it is a much smaller bite for a potential bidder than last year, so a takeover now as a going concern or a forced, managed merger in the event of failure is much more realistic and more likely than letting it collapse if the worst case happened. A sale at these levels wouldn’t be good for shareholders or employees (certainly if it merged with CS) but depositors would be safe. A merger with HSBC would be a much better fit than CS for the Swiss retail bank operations. It would also solve the problem of what to do with the investment bank as HSBC lacks that as well. It would certainly be a better outcome than a forced distressed merger with CS or anyone else.

Some people never learn...

5 years CDS. As of September 16th. Maybe I should bother updating it...

HSBC: 90 (+17, since Sept 12)
Deutsche Bank: 114.6 (+31.6)
Credit Suisse: 121.8 (+31.8)
RBS 160.3 (+37.6)
UBS: 170.2 (+35.2)
JPMorgan: 192.5 (+64.5)
Bank of America 200.8 (+56)
Citibank: 267.5 (+95.5)
Goldman Sachs: 344.6 (+162)
Morgan Stanley: 496.7 (+243.4)

ok so this is all very complicated.... I came on for a permit question and never realised there may be a banking problem ... !!!! In short, would it be a wise choice to be moving money out of UBS ?

Good list, the spreads are spreading

BTW from New York Times this week
"Credit-default swaps used to inhabit an arcane corner of Wall Street. Now, they are fast becoming part of the national vocabulary because of the role they have played in the government’s decisions to bail out certain financial firms.
Christopher Cox, the chairman of the Securities and Exchange Commission, urged Congress on Tuesday to pass a law that would regulate credit-default swaps, stating that the market, with a notional value of $58 trillion, is “ripe for fraud and manipulation.”

Marton

What this means in simple language please?
These values mean nothing to most folk here. Especially those with mullets.

Does UBS have one foot in the grave and the other on a banana skin?

And how would Switzerland's gold resereves figure in this scenario??