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  #441  
Old 15.10.2008, 18:54
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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A question on how governments are taking over banks: Are they buying the banks through the stock market? Are they only taking over banks that are asking for help? Or are they practically confiscating banks?
The how depends on why the government is taking a stake in the bank.
If the bank has failed and the government takes over the bank through nationalization (like Bradford and Bingley) then the shares are suspended, the bank is taken into public ownership, the assets are sold off and the rest of the business is gradually run down. Shareholders usually get next to nothing.
But if the bank is still a going concern and can be saved through a government capital injection buying shares in the open market is not an option - that would be transferring shares from existing owners to the government which would not increase the bank's capital. The obvious route, as Texaner says, is to buy new preferred shares. They are "preferred" because they pay a dividend (usually a fixed amount like interest which isn't dependent on profitability) which must be paid before any dividend is paid to ordinary shareholders. Also if the bank goes bust, preferred shareholders are paid out before ordinary shareholders. So preferred shares offer better protection to to taxpayers (or Warren Buffet) than ordinary shares. Preferred shares are usually non voting but are usually convertible into ordinary shares so they can be sold off at a profit when the bank recovers. A second way governments can support a capital increase is to underwrite new issues of ordinary shares. These new shares are offered to existing shareholders as rights issues, or to the public, and if all the shares are not subscribed for the government takes the balance and holds them until market conditions/demand improves and the shares can be sold on. The UK government is doing both of these in the case of RBS.
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  #442  
Old 15.10.2008, 19:00
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

I found this on NYTimes and the first paragraph reads like a sequestering:

"The chief executives of the nine largest banks in the United States trooped into a gilded conference room at the Treasury Department at 3 p.m. Monday. To their astonishment, they were each handed a one-page document that said they agreed to sell shares to the government, then Treasury Secretary Henry M. Paulson Jr. said they must sign it before they left."
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  #443  
Old 15.10.2008, 19:21
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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Hello,

A question to experts. I ’ve read that analysts says Hungary is in a similar situation like Iceland. Do you think it is an exaggeration or true? I am not an expert. Is it possible that the same could happen in Hungary than in Iceland? It is sure that on Friday the HUF fallen quite big, but until today it was getting stronger again to a „normal” level. But today again falling. I guess Hungary is a risky country and these times investors sells hungarian papers and changing thier huf to eur/usd/chf whatever, which certainly make huf weaker. And I’ve also read that nobody buys the state bonds(however the base interest rate in Hungary 8.5%) and some banks stopped to give loans in CHF/USD.

So if there anybody out there who has knowledge on these things and have the time and will to write it down here it would be highly appreciated. It would be nice to see how the western investors see the situation of my home country.
I'm not knowledgable in "things Hungarian" but here's a link which might give you some insights:
http://www.bloomberg.com/apps/news?p...E&refer=europe

Hungary clearly has big problems because of its high amount of external, foreign currency debt. So much so they have approached the IMF for help. It's not surprising therefore banks are pulling foreign currency lending. But hopefully the problems aren't of Icelandic proportions. The banking system is functioning, I would assume the central bank has more reserves than Iceland and Hungary, unlike Iceland, is a member of the EU and can expect some support from the ECB.

Last edited by Nev; 15.10.2008 at 20:32.
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  #444  
Old 15.10.2008, 19:28
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Re: How Safe is UBS

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delite, it's safe. I guess you've got money in there? I'm sure it's hard not to stress about it, but it'll be fine. Really.
yes, pay no attention to the man behind the curtain.
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  #445  
Old 15.10.2008, 23:15
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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If it wasn't a question then I assume you knew their exposure to collateralised type securities was down to zero following the redemption in summer of the latest chunk they held of Paragon paper... so why ask then?
?

Allright, might be some news for the Leveraged Investment Group at CS in London with regard to their loan obligations.

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  #446  
Old 15.10.2008, 23:25
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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A question on how governments are taking over banks: Are they buying the banks through the stock market? Are they only taking over banks that are asking for help? Or are they practically confiscating banks?

they'll try a bit of this and a bit of that... frankly Paulson and Co havent got a plan and what is worse, he does not appear to have a c clue, which is a crying shame cause the guy spent a lifetime on Wall St
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  #447  
Old 15.10.2008, 23:28
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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I found this on NYTimes and the first paragraph reads like a sequestering:

"The chief executives of the nine largest banks in the United States trooped into a gilded conference room at the Treasury Department at 3 p.m. Monday. To their astonishment, they were each handed a one-page document that said they agreed to sell shares to the government, then Treasury Secretary Henry M. Paulson Jr. said they must sign it before they left."
yup. thats the Bush approach. when you havent got the foggiest idea, just seize on a plan, look confident, and execute the plan. ignore all the doubters... this is war. no time to debate...
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  #448  
Old 16.10.2008, 00:01
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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?

Allright, might be some news for the Leveraged Investment Group at CS in London with regard to their loan obligations.
Who mentioned London sofar? The issue at hand was exposure in the the Swiss discretionary managed portfolios, and you came in specifically with one money market fund - which is managed by the US entity (and has no such exposure anymore since past June save for a minimal positin in Nissan Auto Receivables)... and now you bring up London.

Look, there's no doubt that there's still some leveraged deals within CS. But that wasn't really the point.
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  #449  
Old 16.10.2008, 00:24
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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Look, there's no doubt that there's still some leveraged deals within CS. But that wasn't really the point.
Ok, but I thought it is the point, due to:

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None of the managed CS portfolios I've seen so far were invested in CDOs or MBS, nor were such instruments included in the standard grille for discretionary mandates.
Sorry, I corrected you… won't do in future ;-)



(The comment regarding London was my try to point you in a friendly way in the direction what I am referring to – CDOs which had been converted in big style by CS to debt obligations.)
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  #450  
Old 16.10.2008, 08:15
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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Ok, but I thought it is the point, due to:


Sorry, I corrected you… won't do in future ;-)



(The comment regarding London was my try to point you in a friendly way in the direction what I am referring to – CDOs which had been converted in big style by CS to debt obligations.)
But CDOs are Collateralized Debt Obligations already... Are you implying that the "collateralized" part has been lost / sold ?

Thx

Paul
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  #451  
Old 16.10.2008, 09:03
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

UBS has now received help from the Swiss National Bank and CS has raised additional funds privately. http://news.bbc.co.uk/1/hi/business/7673159.stm

added: UBS opened down 8.67% at 18.34 - the rest of the market is down (again) too...
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  #452  
Old 16.10.2008, 09:03
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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(The comment regarding London was my try to point you in a friendly way in the direction what I am referring to – CDOs which had been converted in big style by CS to debt obligations.)
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But CDOs are Collateralized Debt Obligations already... Are you implying that the "collateralized" part has been lost / sold ?

Thx

Paul
Concur. How does one turn CDOs into debt obligations?
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  #453  
Old 16.10.2008, 09:07
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

On unrelated news UBS has ceded to the National Bank its toxic assets; implied proforma loss 4 bln CHF.

CS has raised ca. 10 bln CHF in capital by selling own treasury-held shares, convertible bonds and new stock.
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  #454  
Old 16.10.2008, 09:08
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

So the SNB breaks silence at last with a $60 billion package for UBS.
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Old 16.10.2008, 09:16
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

To ask a bit of a silly question,
what do experts say how long it'll take to get out of the whole mess?
Heard the BBC say something like 5 years ??? ...
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  #456  
Old 16.10.2008, 09:50
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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To ask a bit of a silly question,
what do experts say how long it'll take to get out of the whole mess?
Heard the BBC say something like 5 years ??? ...
Depends on who you listen to.
My models tell me 2 years 9 months 3 weeks and 5 days!
I would think at least two years of recession/slow growth and beyond that it's anybody's guess. Recession is a fact but a lot of this is about confidence, or lack of it. How long that takes to come back isn't a science. The UK has it's own set of problems which might account for the BBC's pessimism.
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Old 16.10.2008, 09:53
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BBC: Switzerland injects cash into UBS

http://news.bbc.co.uk/1/hi/business/7673159.stm

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Switzerland is taking steps to strengthen its largest bank, UBS, the latest country to unveil a banking rescue plan.
UBS will raise 6bn Swiss francs ($5.3bn) from the Swiss government.
It will also be able to transfer up to $60bn of toxic assets to a fund supported by the Swiss central bank.
Credit Suisse said it had raised 10bn Swiss francs from major global investors, adding that it did not need to tap government funds at this time.
The Swiss National Bank said its moves would help to stabilise the financial system and was favourable for the development of the Swiss economy.
UBS also announced that it made a small net profit of 296m Swiss francs in third quarter, mainly due to its wealth management business. Its investment banking arm made a loss of 2.8bn francs.
Credit Suisse said it expected to make a loss of 1.3bn Swiss francs in the three months to September. Credit Suisse also said that the Qatar Investment Authority was among the group of global investors that had helped the bank to shore up its finances.
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  #458  
Old 16.10.2008, 09:54
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

Huh? After that annonucement UBS is now the only stock on the SMI that is actually up at CHF20.94 (+4.28%)...
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  #459  
Old 16.10.2008, 09:54
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Re: BBC: Switzerland injects cash into UBS

I bet there's a few embarrassed faces around at the nation's flagship companies, Switzerland, home of secure banking?
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Old 16.10.2008, 09:57
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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Huh? After that annonucement UBS is now the only stock on the SMI that is actually up at CHF20.94 (+4.28%)...
Amazing innit?
It's just the effect of having "disposed" 60 bln worth of unpriceable dung with the SNB. The BIG question that begs to be asked is: how much more are they hiding from our view?? They've corrected, reassessed, re-whatever their initial statements so many times it's not even funny. Do we wonder why people have no faith in the financial system, anymore?...

P.
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