Wednesday, September 21, 2011

The UBS cowboys

You can write a book or you can just write one word about UBS - Cowboys.

Just wait and see. Articles in abundance will appear about them for sometime. Eventually books would be written about them. They will be shown to be feckless cow boys and GIC invested in them!

Structure breeds behavior, pure and simple. Banks who are no longer long term greedy are sure to get into trouble provided they have special leadership. For every bomb that exploded, many banks heave a sigh of relief that it wasn't them. That is the imperative of their business. The dangerous dance must carry on as long as the music is playing.

GIC is more often lucky than clever. This is true for the majority of fund managers. That's why all these years, I view my CPF as a bonus. I wouldn't be surprised if one day it gets decimated.

Investment managers are some of the most self deceived charlatans of this world.

There is no safety in the world of finance. You have to learn to avoid the dangerous dance tunes; enter before the others and also leave before the music stops. The trouble with banks is that they cannot except when the music stops.

Conceived in sin and born in iniquity, Walter Bahegot said about banks. Look at that guy's face. I don't want to name him :(


Update: Sep 23, Just got this from the Economist.

The excuses wear thin pretty quickly, however. Most other large investment banks double-check all big trades, even when not forced to by regulation. “I thought it would have been impossible for this to happen at any bank after SocGen,” says the head of investment banking at a large bank. “It couldn’t happen at ours.”

You see and there should be more to come. They are reckless. They are cowboys. They are game to take a risk. Whatever happened to their reputation for safety and reliability? These are the Swiss.

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