It has been a rough couple of years for the folks at UBS. Switzerland’s answer to Citigroup hasn’t seen a profit in years and will likely rack up another loss for 2009. Having seen its profits and investment banking headcount surge during the credit bubble, the firm has been hemorrhaging people almost as fast as money for the past several years. But even with massive cuts and routine management changes, UBS has still not been able to stop the bleeding.
This week the firm received another kick in the teeth seeing BAC surpass it as the world’s #1 wealth manager. With each passing quarter, those discussions with private banking clients about being the “most powerful two-person financial firm in the world” have to be getting ever more painful. With Swiss regulators watching the firm’s every move, the golden era of secret bank accounts coming to an end, and new lawsuits by the day, UBS is quickly running out of lifelines free of Credit Suisse.
Gruebel Isn’t Saying How Cutting 40% of UBS Can Help Earnings [Bloomberg]
Archive for July 2009
Not sure how we missed this, but apparently Deutsche Bank spied on management, board members and one “troublesome” shareholder in particular a few years back. Not that big a deal, say the Germans, but now that there’s the possibility of a lawsuit they’ve told the guy they’re sorry, have put it out there that they’d love to forget it ever happened and wondered aloud whatever is German for “we cool?” during one incredibly awkward phone call.
The bank had external helpers investigate a shareholder believed to have links with Kirch — Michael Bohndorf, a lawyer who resides on the island of Ibiza. The investigators compiled detailed reports on his movements and even looked into whether he had any personal weaknesses: alcohol, gambling, women? One insider reports that the agency resorted to hiring women to test him.
For years, Bohndorf has been annoying Deutsche Bank by asking dozens of questions at annual shareholder meetings and taking legal action if his questions aren’t answered. The bank has already informed Bohndorf of the spying operation and apologized for it. Bohndorf couldn’t be reached by SPIEGEL last week by the time the current issue went to press.
Data protection officials in the western state of Hesse, the Federal Financial Supervisory Authority (BaFin) and possibly even the public prosecutor’s office in Frankfurt will now have to check whether any laws were broken in the snooping operations.
Many members of Deutsche Bank’s supervisory board have little doubt that laws were broken. And they’re particularly worried about the Michael Bohndorf case. The litigious shareholder has proved that he doesn’t shy away from suing the company.
Clearly DB would never have gotten away with pulling a stunt like this on everyone’s favorite fractional bank owner Evelyn Davis, who’d cut a bitch (CEO) for stepping into her den (believe Ken Lewis, he’s tried).
Obviously Goldman Sachs is behind this, somehow, but why? Above, the “Love Story” of Sergey and Elina, a video that’s been available since 2007, and was up until some point last night. Now, alarmingly, the audio’s been stripped, supposedly over copyright infringement, though we have it on good authority there’s more to this than meets the Blankfein. Is this some sort of coded message via LB? The WSJ suggested earlier that Serge and the wife should be embarrassed about the video, which tells how workaholic Aleynikov found love via a genie in a lamp, and would perhaps want to bury evidence of its existence. With all due respect, the Journal clearly has no idea what it’s talking about– this is nothing to be embarrassed over. It’s the sort of thing you shout loud and proud.
$$$ Miracle on 78th St: Marisa Noel Brown Finds a Buyer [Cityfile]
$$$ Sallie Krawcheck might go work for UBS [clusterstock]
$$$ Sex Diaries: The Gay Commodities Trader [NYM]
$$$ Are you among those absolutely loving the unemployed track? [via AWL]
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According to the administration, the Treasury is trying to find every way possible to make sure that its voice is not heard in the companies in which it has become an accidental shareholder. While it feels it should have significant control over the businesses in which many of these companies operate in, the administration wants to make sure that it doesn’t use its shares to determine such things as executive pay.
The Obama administration is set to release a policy on how it will vote the government’s shares in the coming weeks. On many resolutions offered by investors — from demanding pro- environment policies to allowing domestic partner benefits to reining in executive bonuses — the Treasury plans to ask that its ballots be counted in the same proportion as the votes of other stockholders so it won’t impact the results.
As Kenny Lewis can attest to, when it comes to the stuff that really matters, backroom waterboarding is a far more compelling tool than shareholder votes.
Treasury Plans to Limit Voting of Shares in Rescued Companies [Bloomberg]
The Ponzi circle of life has now come full circle in California. For years, Madoff victims paid real money in state taxes on their fake Bernie profits. Now those victims want the state to issue tax refunds in the neighborhood of $20 million for their phantom gains. The Californians who invested 100% of their money with one guy and are looking to be made whole should really pick their battles. If they continue down this path, some legislator will not be able to resist the temptation to slap them in the face again by using the state’s three-letter solution to everything to deal with this problem as well.
Madoff victims explore tax refunds on ‘phantom’ profits [Boston Herald]
That this is what happens when you f a stranger and/or employee in the ass? In the figurative sense of not compensating him as much as he thought was deserved (we can’t speak to whatever off the clock relationship Aleynikov had with Lloyd Blankfein)? Matthew Goldstein, who broke the story, says yes.
If the FSA is going to set the global standard for curbing rogue trading activities, the insider trading stars of tomorrow little to worry about. Individuals found guilty of illicit trading activities will face financial penalties up to 40% of their total compensation, with a minimum fine of £100,000. Apparently allowing people to keep 60% of their comp after breaking securities laws is the hard line the FSA’s director of enforcement is looking to take.
By hitting companies and individuals in the pocket where it hurts, the fines will be a stark warning to others on what they can expect to pay for flouting our rules
So for those earning over £150,000 and facing a 50% income tax next year, if your insider trading scheme yields at least 66% more than you would earn through legitimate means, it could pay to cheat.
FSA to triple fines and dock pay for market abuse [Times Online]
The blame game. It feels good doesn’t it? Fuck hell yeah it does. But does it get us anywhere? Is it in any way productive? Model/heiress Lydia Hearst, pictured at left, says no. She gets it, sure, it’s human nature to want to pin shit on people when things go wrong. But sitting around naming names isn’t going to anything to get the models y bottles economy back on it’s feet, which should be our common goal. To that end, Lydia would like to know what we/she can do “to fix the issues on hand.” She’s up for pretty much anything, so don’t be afraid to think outside the box.
Lydia Hearst: So Much Smarter Than You Imagined [Cityfile]
As you’re probably aware, Pequot Capital is closing up shop. The firm has issued one last letter, though, courtesy of chief investment strategist Byron Wien, who strangely writes of Art Samberg as though the founder was dead.* Read it if you’ve got the strength.
July 2009 [PDF]
*He’s not, is he? Otherwise I’m an asshole.
Until then suck it up. Gasparino claims today in the Post that Ken Lewis is going to have to meet the demands of the SEIU re: bank tellers or possibly get fired because apparently there’s a chance Obama will get rid of the CEO since the union helped the prez get elected and Obama could conceivably feel like he owes them one. Gaspo has got a problem with this for a whole buncha reasons, one of them being that he’s skeptical that the SEIU’s main goal is the recovery of the financial system, which is what the group has been running its collective mouth saying. The other is that guess what? Being a bank teller isn’t the sort of job where you could get killed. The SEIU, to our knowledge, has never actually claimed this was the case but CG wants to put it out there anyway.
And I have some trouble seeing how being a bank teller is akin to working at a sweat shop. My dad was a union wire lather (a form of iron worker), a job where men risked their lives on the job nearly every day. He nearly lost his leg in one accident, and suffered a near life-threatening concussion in another.
