The US DOJ sued UBS for the American account holders. This created a conflict with Swiss Banking secrecy laws. UBS was caught in the middle. The settlement was a government to government face to face conflict. UBS’s stock took it on the chin as a result.
Keep in mind that this was taking place while the global markets and economies were in a tailspin. Guy’s like Bernanke/Paulson later said things like, “I wasn’t sure we would make it”. The DOJ was hammering not only a major global bank, they were adding to the instability in a critical European financial center.
If you read my blogs you will see that I am no defender of banking secrecy. I’ve taken a ton of flack for that. That said, the timing of this could not have been worse. While all stops were being pulled to put a plug in the economic dike, here was this separate story that was creating another crack. I asked myself a number of times during this drama, “Why now?”I wrote about a critical meeting on March 8, 2009. I voiced my concerns:
If this does take place this week it confirms that DOJ is moving ahead without consideration to the fact that the global financial system is currently very vulnerable.
The following comes today from NZZ, a leading Swiss newspaper. They, in turn, rely on information from a Norwegian publication Aftenposten.
When the final deal between USA/UBS/CH was cut in 09 there were two side deals that the US required:
(I) Two prisoners held in Guantanamo were transferred to Switzerland.
(II) A company registered to do business in Switzerland called Colenco was forced to suspend operations. What was Colenco doing? Recycling uranium for Iran. (a contract to do it in Iran, not Switzerland.).
Leuthard (former Economics Minister) stressed that these two activities are linked to the conclusion of a political settlement on the case of the Swiss bank UBS.
I’m all for standing up to the “Bad boys”. But in this case the war on terror got mixed up with a much different matter. At a very inconvenient time.
Just a question. Do all big international deals that we read about (today with China for example) have side deals that we don’t know about?
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TO ANSWER YOUR QUESTION...YES. SAME GOES FOR THE STRANGE BP/ROSNEFT DEAL...
ReplyDeleteThey're all crooked pig fucks. Though, I seek, condone or participate in no type of violence, sadly, anarchy is and will prove to be the only answer. You have to burn a village to save a village.
ReplyDeleteBruce,
ReplyDeleteI read your blog frequently and I enjoy reading commentary by a writer with real experience in trading financial instruments. However, I lack your experience and often have trouble following your arcane acronyms. One example is your use of PMs in this piece. Please consider using the convention of using a parenthetical explanation after the first use of such an acronym.
Here is another not quite as earth shaking as the UBS deal but curious as well.
ReplyDeletehttp://www.tampabay.com/news/business/floridians-call-on-us-to-withdraw-support-from-spain-in-odyssey-marine/1146825
Remember that treasure ship a US group found off Spain? $500 million in old gold and gems. Seems the USG is siding with Spain against the US company because it wants to recover a painting owned by a US citizen that's in a Spanish museum.
Anon @6:46
ReplyDeleteSorry. I write quite often. I work with drafts. They are more outlines. I use my own shorthand. In this case PMs means precious metals. Put why would you know that?
I will try to do better.....