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  #461  
Old 16.10.2008, 09:59
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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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.
I beg to differ - 5 days?
What day count are you using? 365/365? Actual/360?....


Paul
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  #462  
Old 16.10.2008, 10:00
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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I beg to differ - 5 days?
What day count are you using? 365/365? Actual/360?....


Paul
And most importantly, does it account for CDOs turned into debt obligations.
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  #463  
Old 16.10.2008, 10:01
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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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.
CS also announced 1.3B loss this quarter.

On the stock exchange at the moment UBS shares are rising & CS falling.

Rumour is that the Swiss Government will partly fund this recue by selling Swisscom shares; although if UBS shares keep rising the Swiss Government will be able to get out soon with a profit

BTW, EU leaders met in Brussels yesterday & today to hammer out the details of their $2.7 trillion banking bailout.


That is a big chunk of change & could, for example, eliminate starvation in a large part of our world?

Marton
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  #464  
Old 16.10.2008, 10:06
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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 ??? ...
Not even the wealthy, mighty and savvy know the answer.
There are 2 messes:
  1. Bank insolvency. National governments and sovereign funds are hectically plugging the gaping holes. And governments can print money, raise taxes, etc.
  2. Recession due to consumer pessimism. Hence a vicious cycle of less spending, less manufacturing, less commercial investment, less jobs and therefore less spending......
We can anticipate Mess#1 being controlled within some months. Mess#2 is emotionally driven and therefore unpredictable. Maybe a new US president could inspire a change of sentiment when he increases public spending and projects a confident energetic stance.
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  #465  
Old 16.10.2008, 10:30
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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But CDOs are Collateralized Debt Obligations already... Are you implying that the "collateralized" part has been lost / sold ?

Thx

Paul
Typo, apologies. Should be Collateralized LOAN Obligations.
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  #466  
Old 16.10.2008, 10:39
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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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.
Here's my read for it's worth. This is more about restoring confidence in UBS and by extension the Swiss banking system than fear for UBS's current viability. UBS was not badly capitalized by world standards after earlier recapitalizations and although it had toxic assets on it's books it had written them down aggressively to take the hits early on. That was reflected in it's credit default spreads - 150bp to 170 bp which isn't that high comparatively speaking and certainly not consistent with a bank in trouble - remember Morgan Stanley, Lehman spreads blew out to 750bp (and beyond to 1000 plus) at their most vulnerable. But like you say, that wasn't enough to restore confidence and stop the drain of deposits which did present a real issue as folks worried about further skeletons in the cupboard. My view is the bail out package is an attempt to draw a line under that. Transferring those assets to the SNB is supposed to show a significant de-risking of UBS balance sheet but I think it's as much about show as anything because I think a lot of de-risking had already happened. That's why UBS probably insisted on keeping an equity stake in the toxic fund and has a chance down the road to buy back in. On top of that UBS now has the support of two governments - Singapore and Switzerland. I'm not at all surprised that the stock is up.
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  #467  
Old 16.10.2008, 11:09
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

I'm surprised the CHF hasn't plunged - but relieved at the same time as I have most of my savings in Francs.

Still, time to start drip feeding my CHFs into GBPs. Will reduce my CHF holding from 60% to 30% of my total savings.

The only problem is that no currency is looking 'safe' and it's a total crapshoot as to which ones end up losing and which gaining at the end of all this.

In normal crises the Swiss Franc does well. This one is a flat-out banking crisis and which country is essentially built on banks? Let's hope we don't see Iceland 2.0
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  #468  
Old 16.10.2008, 11:25
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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I'm surprised the CHF hasn't plunged - but relieved at the same time as I have most of my savings in Francs.

Still, time to start drip feeding my CHFs into GBPs. Will reduce my CHF holding from 60% to 30% of my total savings.

The only problem is that no currency is looking 'safe' and it's a total crapshoot as to which ones end up losing and which gaining at the end of all this.

In normal crises the Swiss Franc does well. This one is a flat-out banking crisis and which country is essentially built on banks? Let's hope we don't see Iceland 2.0
Really? I'm thinking of moving my money out of GBP and into CHF at the moment - the global recession is coming, and which countries (which are pumping hundreds of millions of debt into rescuing the majority of their banks) are likely to be hit worst? I'm thinking the UK is going to struggle, whilst so far the Swiss banks seem to be doing comparatively well - none have failed, or needed bailing out. I'm sad to say it, as I have a flat in the UK too, but I think that Sterling is going to be hit badly over the coming months in comparison to Swiss Francs
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  #469  
Old 16.10.2008, 11:29
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

I started buying pounds on the back of the drop against the SF. However put it all in UK offshore Isle of Mann account. Now have moved it back into mainland as I can´t get any info on the safety of the offshore account (of a building society the UK government recently took over and sold to Santander).
What a mess.
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  #470  
Old 16.10.2008, 11:31
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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. UBS was not badly capitalized by world standards after earlier recapitalizations and although it had toxic assets on it's books it had written them down aggressively to take the hits early on.
However quite interestingly Tier I has declined constantly in spite of earlier recapitalisations.
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  #471  
Old 16.10.2008, 11:55
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

The new UBS logo has been made public this morning.
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  #472  
Old 16.10.2008, 12:33
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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However quite interestingly Tier I has declined constantly in spite of earlier recapitalisations.
Too true but they always said they'd pegged the level of the recaps in anticipation of further write downs to come from the investment bank so some decline in tier 1 was inevitable. In and of itself their tier 1 should have been sufficient to see them work this out over time. There are three legs to this stool - declining asset prices, availability of capital and confidence. I think they were well down the track on the first two but clearly depositors and wealth clients weren't confident enough to give them time. At the end of the day they've had to overcapitalize to protect the asset management business. Whether this will be enough to restore that confidence remains to be seen. It'll be uphill that's for sure. The irony is that from my experience the quality of their asset management isn't that good. They need new management to rebuild their franchise. This lot look like caretakers to me although I give 'em credit for meeting the challenge head on once the sh*t hit the fan.

Last edited by Nev; 16.10.2008 at 12:43.
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  #473  
Old 16.10.2008, 12:52
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

Gav, if I may, please think twice about switching more to GBP as there may be far more weakness ahead - housing still going down rapidly, financial industry which has been the greatest wealth generator seriously injured, government in deficit and consumers maxed-out which all means the GBP interest rates will have to come down from a very high level. All this means the GBP will weaken further in the coming years. They will have no option but to inflate out of this mountain of debt because the alternative - deflation - is far far worse. That means more pressure for GBP to go down. UK will have to manufacture again and to export their way out of this mess and that means a weaker GBP is a must to be competitive.

Now that oil and commodity prices have come down rapidly, Bank of England will have the option to cut rates as inflation will decline rapidly in the next 3-9 months.

So, do research further before you make that move especially as you live here, you have to spend money in CHF not GBP and the risk of GBP going down substantially vs. CHF has to be taken into account.

This is just my opinion so take it with a grain of salt.


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I'm surprised the CHF hasn't plunged - but relieved at the same time as I have most of my savings in Francs.

Still, time to start drip feeding my CHFs into GBPs. Will reduce my CHF holding from 60% to 30% of my total savings.

The only problem is that no currency is looking 'safe' and it's a total crapshoot as to which ones end up losing and which gaining at the end of all this.

In normal crises the Swiss Franc does well. This one is a flat-out banking crisis and which country is essentially built on banks? Let's hope we don't see Iceland 2.0
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  #474  
Old 16.10.2008, 13:01
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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%)...
sure... any stock would bounce if the government forced taxpayers to donate 60 billion to it ... whyy the surprise..??
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  #475  
Old 16.10.2008, 13:03
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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That is a big chunk of change & could, for example, eliminate starvation in a large part of our world?

Marton
bah... thats just about enough to prevent starvation on Wall Street
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  #476  
Old 16.10.2008, 13:25
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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Gav, if I may, please think twice about switching more to GBP as there may be far more weakness ahead - housing still going down rapidly, financial industry which has been the greatest wealth generator seriously injured, government in deficit and consumers maxed-out which all means the GBP interest rates will have to come down from a very high level. All this means the GBP will weaken further in the coming years. They will have no option but to inflate out of this mountain of debt because the alternative - deflation - is far far worse. That means more pressure for GBP to go down.
Agreed. The UK has an enormous consumer debt mountain, on top of mortgages.

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UK will have to manufacture again and to export their way out of this mess and that means a weaker GBP is a must to be competitive.
Unfortunately the UK has rather put all its eggs in one basket. It will have to start from scratch with its manufacturing base, and that takes the one thing which is currently in short supply - capital.

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Now that oil and commodity prices have come down rapidly, Bank of England will have the option to cut rates as inflation will decline rapidly in the next 3-9 months.

So, do research further before you make that move especially as you live here, you have to spend money in CHF not GBP and the risk of GBP going down substantially vs. CHF has to be taken into account.
I believe Gavin is located in Belfast, Northern Ireland, so while I generally agree that the CHF is probably more secure, he needs to consider how much GBP he needs over there (he recently mentioned that he was considering buying a property if the price were right).

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This is just my opinion so take it with a grain of salt.
Ditto.
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  #477  
Old 16.10.2008, 13:41
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

Any update on health of UBS?
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  #478  
Old 16.10.2008, 14:13
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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Any update on health of UBS?
I've heard managers clapping

Paul
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  #479  
Old 16.10.2008, 14:18
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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I've heard managers clapping

Paul
Was it forced clapping or genuine clapping? Sure it was not sound of people getting slapped?
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Old 16.10.2008, 14:20
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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Typo, apologies. Should be Collateralized LOAN Obligations.
I.e. CLOs becoming CDOs? Just trying to understand here.
IIRC from the presentations back then, loans supported by covenants of the appropriate strength, were the strong point of these structures, as (correct me if I'm wrong) the loan part of the portfolio (BTW we're excluding synthetics) was supposed to be more solid as it was backed by *real assets*.

P.
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