Who is Union Bank of Switzerland

A couple of months ago Union Bank of Switzerland created an off shoot of its banking
endeavors to assign Sub-Prime Mortgage Debt. Being a wholly owned subsidiary of UBS
was a smart move…in that it insulated the huge Corporation from a giant pyramid fall into the great Sub-Prime abyss.

It hasn’t taken long and UBS is quickly divesting itself… and the US Asset Manager
Group BlackRock….has agreed to purchase the $20 Billion dollars in debt for $15
Billion. In the meantime, UBS has taken an $11.4 Billion dollar write-off for the
first quarter of 2008. A total of $38 Billion dollars since the divestiture….burr
..baby it’s cold outside! In the meantime Goldman-Sachs is busy picking up these
loser sub-prime debts….betting on the outside chance that either Government or the
original lenders will fold their tents and just write-off the entire deal! Whew…
how many investments does the County of Orange have with any of these people? They
seem to be betting on Government intervention…one way or the other!

So who is UBS and what difference does any of this make to those of us in the U
S of A? A little background is in order: Back in 1850 the Lutherans and Catholics
had more money than they could handle….no pun intended: Handels Bank! In any
event the Swiss had to make the compromise and created a Union of Banking interests
with the so-called Protestants in charge. The Pope still ran the deal…but way
behind the scenes. In any event, this is the group that Bob Dylan might call the
“Master’s of War”. They have funded every endeavor you can think of since 1850 which
included the US Civil War, World War I and II and other assorted social uprisings. But we don’t care what someone does for a living you understand. Hey, they all have kids to send to college and family members with health concerns. What did happen however after D-Day, 6th of June – 1944…was the Bretton-Woods Conference which changed all the banking relationships in the world and more importantly created the International Monetary Fund and the World Bank – which has the real name of: IBRD – International Bank for Reconstruction and Development. These people got their start with a small deal called the Marshall Plan – to rebuild all of Europe after World War II…with borrowed money. Some Catholic, some Protestant….some World Bankers…some rich Americans….some taxed Americans….you know the usual suspects!

At any rate, if we fast forward at light speed..we get to July of 1998 when UBS and
Swiss Bank Corporation of Basel, Switzerland merged! Big and bigger! This was then quickly followed in November of 2000 with another merger with a US interest called Paine-Webber, Inc…which we all might have some familiarity with..maybe? So who are these guys and what is going on? UBS employs about 100,000 people worldwide. They have this broken down in three basic groups: Global Wealth Managers, Investment Banking and Securities and Global Asset Managers! Sounds “Global” doesn’t it? Sounds like they may have more than a passing influence on things like the “price of oil”, “price of commercial real estate”, “price of residential real estate”, “debt instruments”, and the power of liquidity in the banking industry!

So, let’s think about this for a minute…as the price of oil hits $120 a barrel
and seems headed for $160…rather than the pre-ordained $140 by June! So, how does
all this convoluted information come together? It’s sort of like this: There are
“players” and there is “chopped liver”. Right now, funds are on the move….and what
happens in the next year or two will have immense impact on our World Society. Forget what happens to the USA…”We are bigger than US Steel…Michael!”…in the
words of Hyman Roth..in Godfather II. Forgiving Debt…will be the new “watchword”
for the world. You see, if the Banks simply “forgive the debts – write-off the loses
and take the tax breaks…then simply the Governments of the World print more money
..pay everyone off….let everyone keep their houses at low interest and simply
devalue not only all the currencies of the world….but devalue all the property of
the world. Who could get hurt? Try everyone stuck in houses that will now be worth
about half of what they paid for them. Try local and State Governments that will not
be able to afford paying inflated wages to their Public Sector Employees. Try the
citizens that are now going to receive less and less Public Services and even Health
Services. How about paying four times what we are paying for gasoline, food or
anything that might be considered “staples” like transportation and energy.

This is a big one…..we hope these MBA’s can figure out a “Social Solution” to
this “Investment Debacle”! Who screwed the pooch? Well, it wasn’t the guy that
that works at Burger King!

www.yale.edu/lawweb/avalon/decade/decad047.htm