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  #301  
Old 06.10.2008, 14:02
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Re: How Safe is UBS

The Germans are NOT guaranteeing their banks! Angela Merkel meant that 'no German savers would lose their deposits'. Apparently she did not mean their would be legislation on this. (BBC TV news).

Too late for Sweden and Denmark who already introduced guarantees because they though Germany had done so.

What a cock-up...
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  #302  
Old 06.10.2008, 14:09
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Re: How Safe is UBS

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Taxes: UBS will not be paying any taxes for many many years. They will be carrying their incurred 30B (?) losses forward and setting those off against any future operating profits.
If that doesn't ring a bell on the AAA rating of your beloved canton-backed ZKB, I don't know what will.

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Economy: Deposits into ZKB and other similar national financial institutions also stimulate the Swiss economy and employ people here. ZKB, etc. lend to local small-and-medium enterprises and give mortgages to solid local house buyers.
The same solid local buyers that caused the Swiss real estate crash in the nineties - if your memory fails you.

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The big banks use our deposits to speculate in dubious instruments in foreign countries, lend to "sub-prime" borrowers abroad and employ more people in London/NewYork than Zurich. Should Swiss taxpayers now compensate the US sub-primers?
I didn't hear you whinging about that when UBS paid top Swiss Franc taxes thanks to its activities abroad. Do you vote SVP perchance?
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  #303  
Old 06.10.2008, 14:30
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Re: How Safe is UBS

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My guess is top of the agenda in Berne today is when are we going to announce a 100% depositor guarantee. .........
True but how does a Government announce a credible guarantee when the banks involved are worth much more than the Government. According to the FT today the UBS assets alone are equal to 4.8 times the Swiss GDP (& CS 2.9 times).
Building confidence is one thing but surely somebody will notice the elephant in the room? Although having said that other Governments have managed to disguise their elephants so far.

Marton
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  #304  
Old 06.10.2008, 14:46
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Re: How Safe is UBS

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True but how does a Government announce a credible guarantee when the banks involved are worth much more than the Government. According to the FT today the UBS assets alone are equal to 4.8 times the Swiss GDP (& CS 2.9 times).
Building confidence is one thing but surely somebody will notice the elephant in the room? Although having said that other Governments have managed to disguise their elephants so far.

Marton
I bought shares in printing presses (Heidelberger)
Care to share the name of a Co that supplies banknote quality paper?

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  #305  
Old 06.10.2008, 14:52
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Re: How Safe is UBS

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True but how does a Government announce a credible guarantee when the banks involved are worth much more than the Government. According to the FT today the UBS assets alone are equal to 4.8 times the Swiss GDP (& CS 2.9 times).
Building confidence is one thing but surely somebody will notice the elephant in the room? Although having said that other Governments have managed to disguise their elephants so far.

Marton
Re the elephant in the room - that's exactly the point Shorrick keeps bringing up. The events which are leading to the open ended infinity style guarantees by some European states are liquidity driven. By issuing guarantees these governments are hoping to shore up confidence in their banks and avoid a panic driven run which would bring the banks down. In other words they are trying to protect their country's banking system. It's like a game of bluff. They know there's an elephant in the room but are betting these guarantees will stop it crapping in there.
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  #306  
Old 06.10.2008, 15:02
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Re: How Safe is UBS

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I bought shares in printing presses (Heidelberger)
Care to share the name of a Co that supplies banknote quality paper? Paul
LOL
They will be nearly as busy as the gold coin & bar manufacturers who are reputed to be working 7 day weeks.

Marton
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  #307  
Old 06.10.2008, 18:26
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Re: How Safe is UBS

Can UBS go bust as early as next week (hopefully never though)? Markets getting battered. Not looking good for the economy.
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  #308  
Old 06.10.2008, 18:46
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Re: How Safe is UBS

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Correct Abfab. What's more with Irish Deposit insurance theoretically infinity and UK deposit insurance now at GPB 50,000, the depositors in Switzerland seem to be getting cheated with their GBP 15,000 (CHF 30,000) backstop. Even the US, at the eye of this storm, guarantees deposits up to almost 10 times the Swiss level of protection.
As a point of information, the Irish Deposit insurance is only guaranteed for the next 2 years. Admittedly that does sound like "infinity" given the speed with which things are moving right now, but is there an Irish General Election within that time frame?

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In fact I believe the Swiss deposit protection is practically the lowest in Europe. So either the SNB thinks Swiss banks are so safe that deposits don't need a realistic guarantee or maybe the Swiss government knows something we all don't! Conspiracy theory or what?
But the interest rates here are also among the lowest too, and surely the SNB wants to maintain the image of a safe and stable Swiss Franc. I thought the UK's response was a knee jerk reaction (only one of many knee jerk reactions made by the UK govt. over the past decade or so), and I would rather see the SNB avoid emitting signals which could be interpreted as signs of panic.
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  #309  
Old 06.10.2008, 18:49
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Re: How Safe is UBS

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Can UBS go bust as early as next week (hopefully never though)?
I hope not!

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Markets getting battered. Not looking good for the economy.
News today from Europe;
"Announcing a suspension of its shares on the Milan Stock Exchange and a 25% cut in its forecast earnings for this year, UniCredit, Italy's largest bank, moved to raise €6.6 billion (£5.1 billion) through a cash injection.

Danske, Denmark's leading financial group, said its profits in the third quarter of the year would be worse than expected, and it would be joining a two-year state guarantee to stand behind depositors' money, brought in by the Copenhagen government in a copycat move to those made by Ireland and Germany. Before the current financial crisis, UniCredit was among Europe's top five banks by assets."

Marton
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  #310  
Old 06.10.2008, 18:54
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Re: How Safe is UBS

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Can UBS go bust as early as next week (hopefully never though)?
Only if you stop believing in it. As an article I was reading on MSN money observed "Banks are rather like the fairies in Peter Pan. Once you stop believing in them they die"
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  #311  
Old 06.10.2008, 18:57
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Re: How Safe is UBS

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I thought the UK's response was a knee jerk reaction (only one of many knee jerk reactions made by the UK govt. over the past decade or so), and I would rather see the SNB avoid emitting signals which could be interpreted as signs of panic.
Funnily enough the article on MSN money concluded:
"J. M. Barrie, the author of Peter Pan, suggested that readers who closed their eyes tight and tried really hard to believe might save Tinkerbell from an untimely death. Governments haven't yet asked us to do the same for banks. But when the British government finally does match Germany, Greece, Denmark and Ireland in guaranteeing all bank deposits, it will amount to much the same."
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  #312  
Old 06.10.2008, 19:10
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Re: How Safe is UBS

I'd imagine that the notable silence from Switzerland on banking guarantees (unless I missed the news, I'm not following Swiss affairs that closely) isn't exactly helping the position of the Swiss banks.
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  #313  
Old 06.10.2008, 19:36
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Re: How Safe is UBS

I somehow fear that this whole crisis might hit Europe much worse than the US - a lot of stuff went terribly wrong there, but the Americans at least have politicians and officials who really understand how this stuff works (Paulson, Bernanke) and a "let's do something about it" mentality - better to take a wrong decision than no decision. In Europe everyone will just look and blame others, and the socialists are even slightly happy to see what's happening ("Schadensfreude") - I could imagine that 2 years from today the US will be doing fine again and Europe will be in a deep recession.....
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  #314  
Old 06.10.2008, 19:46
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Re: How Safe is UBS

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I'd imagine that the notable silence from Switzerland on banking guarantees (unless I missed the news, I'm not following Swiss affairs that closely) isn't exactly helping the position of the Swiss banks.
When last heard of they were saying there was no credit crunch in Switzerland and the banks here are "well positioned". So they've got their eyes tightly shut and are wishing real hard.
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Old 06.10.2008, 19:47
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Re: How Safe is UBS

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I somehow fear that this whole crisis might hit Europe much worse than the US - a lot of stuff went terribly wrong there, but the Americans at least have politicians and officials who really understand how this stuff works (Paulson, Bernanke) and a "let's do something about it" mentality - better to take a wrong decision than no decision. In Europe everyone will just look and blame others, and the socialists are even slightly happy to see what's happening ("Schadensfreude") - I could imagine that 2 years from today the US will be doing fine again and Europe will be in a deep recession.....
Well Europe will certainly suffer but I think the USA is terminally damaged as well.

They have lived well beyond their means for years and now the debts are being called in.

They do have a lot of natural resources though and a dynamic population and flexible working practices so maybe they can work their way out of it.
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  #316  
Old 06.10.2008, 20:57
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Re: How Safe is UBS

What crazy days are these in the markets. My head is buzzing after every session.

What the hell is next? Last week UBS went up to 24 from 15.50 after they posted surprisingly positive comments. Now they are back down at 20.4 already. My god. Just as i was starting to believe that my savings were safe..... now im starting to doubt it again.

I, and im sure more than a few people here, would dearly like to hear news from the Swiss govt about raising the limits above chf30k. Soon!
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  #317  
Old 06.10.2008, 20:58
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Re: How Safe is UBS

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I'd imagine that the notable silence from Switzerland on banking guarantees (unless I missed the news, I'm not following Swiss affairs that closely) isn't exactly helping the position of the Swiss banks.
What can they say, really?

Note the reason for the 4 billion cap, says Economist...
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To discourage any hope that the government would rescue either should it become insolvent, the Swiss deposit insurance scheme is capped at SFr4 billion per bank and covers only deposits held in Switzerland.
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  #318  
Old 06.10.2008, 21:05
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Re: How Safe is UBS

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The Germans are NOT guaranteeing their banks! Angela Merkel meant that 'no German savers would lose their deposits'. Apparently she did not mean their would be legislation on this. (BBC TV news).

Too late for Sweden and Denmark who already introduced guarantees because they though Germany had done so.

What a cock-up...
Yes, it seems that what Angela was offering after all was a "political" assurance that depositors in German banks wouldn't lose a euro of their savings. So she too has her eyes tightly shut and is wishing real hard that the world will accept her "assurance". Meanwhile it appears Iceland is on the verge of bankruptcy. Europe is a farce.
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  #319  
Old 06.10.2008, 21:15
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Re: How Safe is UBS

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I didn't hear you whinging about that when UBS paid top Swiss Franc taxes thanks to its activities abroad. Do you vote SVP perchance?
No, I do not vote SVP. The SVP had its people (Blocher previously, then Spuhler) on the UBS board. I generally vote green or socialist or christian.

UBS had its profits taxed proportionately at all its international locations. Future dividends will flow untaxed to Singapore and mysterious Arab investors.

What bothers me is the US tendency to give profits to the capitalists and socialize the losses. That is so unfair. Then better to be a customer of the nationalized PostFin or Cantonal Banks. At least the profits in good times to pay for the losses in bad times.
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  #320  
Old 06.10.2008, 22:21
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Re: How Safe is UBS

Meanwhile it appears Iceland is on the verge of bankruptcy. Europe is a farce.

Could you please explain this statement?

BTW - thanks for all the interesting posts! I never cared much about finance personally, I always found biology much more fascinating the mystery of Life and everything, but I'm learning a lot here.
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