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  #481  
Old 16.10.2008, 14:46
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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So the SNB breaks silence at last with a $60 billion package for UBS.
I believe it was only a CHF 6 billion "package" and the "$60 billion" figure is "assets" being transferred from UBS. (Or am I reading the wrong news?)

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I bet there's a few embarrassed faces around ... Switzerland, home of secure banking?
Yeah, especially since today's events come so closely on the heels of some government officials saying there would be no bailout in CH. (Curiously, I can no longer find the SwissInfo story from a few days ago quoting Couchepin to that effect )

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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?
Up to now I've been hopeful that the CHF would prove to be the least 'unsafe' wanting to trust that Swiss bankers would come through as less imprudent than their credit-crazy American and British counterparts. (Not that I have significant wealth to store in any currency. )
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  #482  
Old 16.10.2008, 15:01
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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I believe it was only a CHF 6 billion "package" and the "$60 billion" figure is "assets" being transferred from UBS. (Or am I reading the wrong news?)
The 6 billion is cash in convertible notes on which the government gets 12.5% interest.

The 54 billion are loans supporting the funds, on which UBS pays LIBOR +2.5%.

Looks like the government is even going to make some money
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  #483  
Old 16.10.2008, 15:56
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

To be back on topic, I think this bailout by the Swiss gov of UBS means that UBS is now going to be much stronger. Even though CS didn't take the gov. money, they have new capital from mid-east sovereign wealth funds to help them to further recapitalize. I think CS and UBS is well on their way to completely clearing out the toxic stuff and move to focus on more profitable strategies next which will give them a good head start.

After today's announcement, CHF and UBS/CS share prices went up which is a very good sign that it's a good move to further strengthen the Swiss financial system. Otherwise, I would expect CHF and UBS/CS shares to fall sharply which didn't happen.

Not to say there's no more skeleton in the closet but I think Bern, CS, UBS all know that this is absolutely critical for Switzerland and can't afford to loose their already sullied reputation of solidity.

Here's a good article on what it means: http://www.telegraph.co.uk/finance/b...clean-ups.html

Long piece on Bloomberg here: http://www.bloomberg.com/apps/news?p...Xiw&refer=home
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  #484  
Old 16.10.2008, 16:04
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

The US(urpers) have taken a major step towards fascism:
Godfather makes banks an offer they couldn't refuse
From the Wall Street Journal (Morning Brief Oct. 15): "As the meeting neared a close, each banker was handed a term sheet detailing how the government would take stakes valued at a combined $125 billion in their banks, and impose new restrictions on executive pay and dividend policies.

"The participants, among the nation's best deal makers, were in a peculiar position. They weren't allowed to negotiate. Mr. Paulson requested that each of them sign. It was for their own good and the good of the country, he said, according to a person in the room."

If they refused, they could expect little government help and possibly much harm down the road. They signed.

The U.S. officials speciously argued "the plan represented a good deal for the banks: The government would be buying preferred shares, and thus wouldn't dilute their common shareholders." What utter nonsense. The preferred cut comes off the top. It has priority over the common, which is why it's called preferred stock. That is why Buffett took preferred stock from GE and GS. Michael S. Rozeff
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  #485  
Old 16.10.2008, 16:16
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

Ah, living in Belfast. Just assumed he's living in Switzerland.

On buying a house - why even think about it now? Surely there's lots of nice places to rent now that housing market has burst. It won't soon be going up. This is a once every 50-70 year deleveraging going on in the Anglo-saxon economies which means money that can be lent by banks is quickly evaporating and you can expect house prices to go down for a very long time relative to all other assets like 4-5 years if you take into account future inflation. By putting the capital in a house now, you can expect that the house will continue to lose value for the next few years while just by putting the money in inflation adjusted ISA type things will guarantee that you'll have a lot more money in 4-5 years while the house will cost a lot less relative to your savings.

Don't think house prices will resume their upward climb because the wave of money is now gone and banks will have no money to lend for a long time without which you can't create the once in a generation asset bubble (i.e. housing etc.) that just bursted.

Think thrice before buying property this soon after that bubble burst.

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Agreed. The UK has an enormous consumer debt mountain, on top of mortgages.



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.



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).



Ditto.
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  #486  
Old 16.10.2008, 16:45
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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The 6 billion is cash in convertible notes on which the government gets 12.5% interest.
12.5% - Not a bad return.
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  #487  
Old 16.10.2008, 17:05
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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12.5% - Not a bad return.
Especially considering that the usury limit is 15%
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  #488  
Old 16.10.2008, 17:06
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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This is a once every 50-70 year deleveraging going on in the Anglo-saxon economies.
Interesting that you put your finger on Anglo-saxon economies. I've been trying to get an idea of how this crisis is perceived in less developed economies, and what the long range ramifications of it might be.

I suspect that the loss of confidence by other nations has far greater ramifications than the loss of confidence by the professional traders in the market. In the past, the west was able to wave cash and trinkets to "manage" and compel other nations. This magic trick may have worn off and this approach may not work as well in the future. This may be a foreshadow of a major geo-political shift that is not necessarily in the west's favor.

Hip-Hop redux:
Throughout history, we've been pimping while the rest of the world has been ho-ing. Turns out the pimp has no clothes. Well, what if the rest of the world no longer wants to ho? Can we survive in a world where we merely have equal footing? Even worse, what if they decide they want to pimp while we ho?

I don't think we've averted the end of the world yet.

Watch what happens to Iceland in the near future. I predict a large spike in the number of suicides.
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  #489  
Old 16.10.2008, 17:19
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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This magic trick may have worn off and this approach may not work as well in the future.
Just like it has worn off in 1873, 1929, 1973, 1983 and 2001.
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  #490  
Old 16.10.2008, 17:27
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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This magic trick may have worn off and this approach may not work as well in the future.
Just like it has worn off in 1873, 1929, 1973, 1983 and 2001.
"The only thing we learn from history is that we learn nothing from history." Friedrich Hegel
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Old 16.10.2008, 17:39
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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Looks like the government is even going to make some money
Which is good since it doesn't look like UBS will have any taxable income this year and possibly next...
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  #492  
Old 16.10.2008, 17:40
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Re: BBC: Switzerland injects cash into UBS

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I bet there's a few embarrassed faces around at the nation's flagship companies, Switzerland, home of secure banking?
Secure airlines, secure pensions (AHV/Kaupthing), secure electricity supply to the railway etc...I guess at least they're being consistent
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  #493  
Old 16.10.2008, 17:42
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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"The only thing we learn from history is that we learn nothing from history." — Friedrich Hegel
And in a practical application of that principle brilliant managers across the world have led us in the S&L ditch again.
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  #494  
Old 16.10.2008, 17:43
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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Which is good since it doesn't look like UBS will have any taxable income this year and possibly next...
Shush. You're going to scare off ZKB investors and clients.
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Old 16.10.2008, 17:46
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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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.
Hey WT you got me thinking, I know NI wanted to adopt the euro like the Irish republic, but the Swiss franc?

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  #496  
Old 16.10.2008, 17:53
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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Especially considering that the usury limit is 15%
And especially when you consider if I lend the Swiss govt my tax money I get 2 %.

So I'm giving 'em money to make 10.5% it looks like.
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Old 16.10.2008, 17:55
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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Just like it has worn off in 1873, 1929, 1973, 1983 and 2001.
The "magic trick" would be predicting the next value in that sequence. You won't find it in your Mensa IQ test book. (Or maybe you might...but which one?).
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  #498  
Old 16.10.2008, 17:57
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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Shush. You're going to scare off ZKB investors and clients.
They already moved to Raffeisen no?
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Old 16.10.2008, 18:13
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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And especially when you consider if I lend the Swiss govt my tax money I get 2 %.

So I'm giving 'em money to make 10.5% it looks like.
The reward difference reflects the risk difference. The Swiss Government is rated AAA. UBS rating is irrelevant! Switzerland has the risk that UBS does not repay in full.
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Old 16.10.2008, 18:16
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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Watch what happens to Iceland in the near future. I predict a large spike in the number of suicides.
i wouldn't expect anything less from a country whose national drink is called 'black death'!
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