Well, the share price has changed to the tune of plus thirty percent. Shouldnt the short squeeze keep prices on the higher side, at least for the time being?

The number set by Swiss banking regulation is an arbitrary number, as indeed is any capital ratio - what keeps the bank afloat is the confidence of depositors and investors .. that is in very short supply for UBS at the moment.

obviously talking from the back of his head.... how many of these clever bankers are still around then??

nope -it means that more Hedge funds are going to go bust, that many banks are going to see yet another profit line impaired (i.e. stock lending), that some bank who had shorted other bank's stocks as a hedge against extended credit lines going to hell (especially because the CDS protection contracted w/ Lehman are now worthless) are now unexposed.

It's a very nice way of showing the man on the street that "something is being done, and it sure works - just look at the stock market!"

The rule, while being beneficial to some extent, also means that there will be less tradeable liquidity in the stock market, which might even cause more volatility. And it means that more liquidity has been used up for the repurchase of the shares. In case of losses being incurred there might be fresh capital haemorrages for the institutions involved...

IMHO, that is...

Paul

According to today's newspapers UBS & CS will benefit from the proposed US rescue package - if Bush gets his 700 Billion approved.

Funny; if the US government does go ahead with this rescue & buys these assets at knock down prices & the market subsequently stabilises then the US government could finish up in profit.

Marton

The big profit will accrue, once again, to the benefit of the financial élite:
http://www.nytimes.com/2008/09/22/business/22lobby.html

Paul

It is a big trough so plenty of room for all the pigs to get their trotters in.

Marton

I believe there's a higher chance of Putin entering the clergy ...

This is simply taxpayer money being taken to help bail out old wall street buddies of Paulson..

the so called 'assets' sitting on the balance sheets of the banks are currently held at unrealistically high prices ('marked to myth' as Warren Buffett said). which is exactly why investors are running from these stocks.

if the USG pays 'realistic' prices for them, then banks have to recognize further losses, which defeats the whole purpose of the bailout plan. i.e. after flushing 700 billion of taxpayer money, we will be back where we started.

in order for this to have the desired effect, USG will have to pay at least the book value of the assets, which by definition is higher than the real value... which means taxpayers get screwed. again.

either way, the banks get a free ride and the taxpayers get screwed. I'm not a US taxpayer, but if you are, you should be calling your congressman and screaming at them

Bravo Dino

This is exactly what the quandary is about. What IS surprising is the manner in which most folks seem ready to accept whatever is happening.
As I stated in another post, maybe on another forum - where is the Mother-of-all-Marche on Washington or Wall Street?

I'm really flabbergated

Paul

if your morning cuppa didn't do it, this should wake you up...

among the many nuggets hidden in the proposal Hank is pushing to the Congress, is this timeless gem

Sec. 8. Review: “Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”

in other words ... I have no idea how much this will eventually cost, I can't promise this will have the desired effect, but in order for this to work, you have to give me a blank check and just TRUST ME...

I will buy what I think is right, at prices I think are appropriate, I will hire and pay who and how much I think suitable, with taxpayer money - but I promise nothing. This is purely on 'best effort basis'.. if the 700 billion goes down the drain and nothing good comes out of it, well tough sh1t. You can't take me to court or ask for explanations. Like I said, JUST TRUST ME

it'll be time to short the US government soon (i.e. the US$)

Since Saturday deposits in the Irish republic will be guaranteed to 100k Euro.

So now you know where to consider sending some money

There are a lot of assumptions here Dino given there are no details of how the bailout will work. I agree the Resolution Trust will almost certainly be buying the assets at prices above "firesale" values (ie the price the banks would get if they all put 100% of the toxic waste up for auction at the same time). But isn't it a more likely scenario that the Resolution Trust buys the toxic waste at a discount steep enough have a realistic chance of selling them in an auction over time, thus forcing participating banks who "mark to myth" to realize their losses immediately which may, in turn, force them to recapitalize to the dilution of shareholders. Banks who do not participate will also have to mark down to the same prices and realize losses since a market price has been established. In that sense it would involve a lot of pain for the banks which wouldn't exactly be a free ride. It becomes a bailout at the taxpayer's expense to the extent that the Resolution Trust fails to sell the toxic waste at prices above the level it paid whether it paid over the odds knowingly, it overestimates the future price (ie it gets it's view wrong) or because the market for the assets moves lower. That's a real possibility because there is no immediate market for 100% of the toxic assets so the Fed will be taking a view on what are realizable future liquidation prices. What nationalizing the toxic stuff does is create time - time for the Resolution Trust to dispose of illiquid assets in an orderly manner over a long period, maybe several years, at prices better than firesale. Any pain to the banks could be immediate.

It says in your profile that you are a financial advisor...

I think from the general feeling around these related threads that depositing it in one of the local banks (Kantonalbank or Raiffeisen) might be the best for now, given the current climate.

Good luck.

Well, just for starter, since the Swissie is a safe haven, you will have to accept whatever rate any safe institution is willing to pay.

Just to give you an idea, the 1.75% Swiss Gov't maturity nov 5 2009 costs 100.95

Best,

Paul

Depends what you mean by large
Most Swiss banks will negotiate rates if you deposit over 1 million.

As mentioned if you want to keep it safe then put it in one of the banks mentioned or Swiss Post office (see below).
E-Deposito account in CHF and EUR

Interest in CHFInterest in EURE-Deposito account in set2.000%2.375%E-Deposito account for young people (under 20)2.750%*3.125%**Debit interest for negative balances9.500%9.500%
No interest limits
* Up to CHF 50'000.-; for higher amounts 2.000%
** Up to EUR 50'000.-; for higher amounts 2.375%

Deposito account in CHF and EUR

Interest in CHFInterest in EURDeposito account1.000%1.375%Deposito account in set1.250%1.625%Deposito account for young people (under 20)2.000%*2.375%**Gift account (under 20)2.000%*2.375%**Debit interest for negative balances9.500%9.500%
No interest limits
* Up to CHF 50'000.-; for higher amounts 1.250%
** Up to EUR 30'000.-; for higher amounts 1.625%

Marton

For people considering a switch or clients without PF savings accounts:

PostFinance has an action right now. If you open an E-deposito and add 4500 euros before 31.12.08 (or the equivalent in francs to a CHF e-deposito) you get 100 CHF. I am not sure if you get 200 if you open both a Euro and CHF e-deposito. Also, if you have more than 25k in all accounts, you can upgrade to the PLUS set which offers some benefits (see web site).

Most - such as?

correct... and that's the plan. Paulson is not going to lay out any metrics or criteria... he's just going to make up the rules as he goes.

and Bush is pushing Congress to just trust him and pass the bill... as soon as Friday. which means barely time to read, much less debate the issue.

now let's see... Dow is down 240, Euro has gone from 1.45 (open Monday morning) to 1.48. I take it the market thinks this whole idea stinks.

No, the market doesn't think it stinks. The problem is the market doesn't know what "it" is. Until "it" becomes clear, markets will remain volatile driven by uncertainty about the mechanics of the rescue scheme, which banks will be able to participate, how the price be fixed, when will the Resolution Trust start buying, uncertainty about level of consequential bank write offs and uncertainty about the impact on fiscal deficit. There's clearly no shortage of people who think Paulson's efforts stink, but Friday's rebound shows the market, in principle, isn't one of them yet and as far as it is concerned it's more a question of "jury out". And my read is Paulson's sole concern is to save the financial system from collapse. He's not claiming to save the market from further downside by promising to cure the recession, prevent future write offs, repair bank balance sheets and restore banks earnings.

Sorry not to have read all of this long thread ... so maybe the point has been made before ... but wasn't Friday's rebound mailny about lots of folks scrambling to get out of short positions that suddenly didn't look smart AT ALL?