-- Posted Thursday, 1 May 2008 | Digg This Article
| Source: GoldSeek.com
In the Economist magazine, there is an article about how UBS, the big Swiss bank, acted like idiots (the article humorously reports that the latest nickname for UBS is "Used to Be Smart"), and now they have lost gigantic oodles of money with this whole collateralized-debt obligation (CDO) thing, which is the ultimate in stupidity, in that grown adults, in responsible positions, most of them with college and post-graduate degrees, believed that you could literally eliminate risk by breaking it up into pieces and selling the pieces!
In other words, these nitwits thought that 100 divided by 1,000,000 equals literally zero, Hahahaha!
You can see how I am despondent and angry that I am the one who is wearing a stupid nametag that says "Trainee" and getting hot grease spattered all over me, while they make the big money by being so freaking wrong!
I laugh at the arrogant eggheads with egg all over their faces as their stupidities blew up in their faces and got egg all over them, which is funny enough, but the comedic effect is ruined by the prospect of taxpayer bailouts of their stupidities, which is altogether too, too much because of the gross economic impact of that much money being created to subsidize the financial sectors of the economy, which takes all the fun out of it.
I guess the only funny part is that UBS, like all the other banks in the world, only acted like a greedy group of crooked, corrupt, inbreeding halfwits, as that is the nature of banks and bankers, which is why, here in America, they are supposed to be kept in check by the Glass Steagall Act, which prevents banks from speculating in the markets and playing risky games with depositors' money, which was enacted after the Crash of '29 (caused by the boom of the Roaring Twenties, which was created by the banks doing all of this money-and-credit-creation thing, only to a marked lesser degree, which only indicates how much we are freaking doomed!), which led to the failure of so many banks which were found acting like the aforementioned greedy group of crooked, corrupt, inbreeding halfwits, so much so that it bankrupted the banking system along with everybody else, which led to the Great Depression, and which prompted Senators Glass and Steagall to say to themselves, "Hey! Apparently, when left to their own devices, banks act like a greedy group of crooked, corrupt, inbreeding halfwits! We need to pass a law, which we will name after ourselves, and thus the world will forever know who saved America from another crisis caused by speculation by the banks!", and it was a good law that worked perfectly fine, until a creep named Bill Clinton perversely repealed it during his embarrassing presidency, and look what happened; his wife wants to be president! Hahaha!
The Economist magazine is, apparently, not interested in my personal opinion of Bill Clinton, his loathsome Marxist wife or the Glass Steagall Act of 1933, and they get back to the point that UBS, like all banks who act like a greedy group of crooked, corrupt, inbreeding halfwits, tried to "emphasize revenue at the expense of risk." Hahaha! Exactly!
Anyway, the interesting part is that the Economist had this little chart they titled "The Lost Half-Decade", showing how the prices of the shares of the bank are exactly back to where they were in 2003, having recently lost over half of their value.
So, investors in the bank's shares have either lost up to half of their money, (if they bought at the top) or have not made any gains (if they bought at the bottom) in five years! Hahaha! Five years without making a nominal dime! Hahahaha! Probably "investment management professionals" at work! Hahaha!
And notice that this is all in the strictly nominal terms of "Swiss francs per share." When you subtract the losses in the buying power of the Swiss franc as inflation in prices has surged around the world, and which is currently running at 2.6% in Switzerland, I derive some Bad, Bad News (BBN) for UBS shareholders; you will almost certainly never break even in terms of buying power by owning UBS shares. You will always get back less buying power than you invested! Hahahaha! Suckers!
Of course, being an American, it could have been worse; wait until you see what happens to American banks! And then to American shares of all kinds! And houses! And bonds! And governments! Hahahaha! We're so freaking doomed!
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Editor's Note: Richard Daughty is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the editor of The Mogambo Guru economic newsletter - an avocational exercise to heap disrespect on those who desperately deserve it.
The Mogambo Guru is quoted frequently in Barron's, The Daily Reckoning and other fine publications. Click here to visit the Mogambo archive page.
-- Posted Thursday, 1 May 2008 | Digg This Article | Source: GoldSeek.com
