Moody's Investors Service has cut various ratings on UBS AG (UBS) pointing out the significant challenges the company continues to face in its Investment Banking and Wealth Management businesses.  Moody's has downgraded the bank financial strength rating and the long-term debt and deposit ratings of UBS AG. The bank financial strength rating was lowered two notches to C from B-, while its deposits and senior debt ratings were lowered to Aa3 from Aa2. The ratings for senior subordinated debt were slashed to A1 from Aa3. The outlook for all ratings is negative implying that further downgrades are possible over the next 12 to 18 months.   Moody’s has expressed its concern over the loss of customer confidence, which is reflected by the ongoing net fund money outflows in the wealth management business. Also a number of key employees have left the organization that resulted in a significant ...

As part of strengthening its Global Energy banking practice UBS Investment Bank, a subsidiary of UBS AG (UBS), is hiring 18 Investment bankers who will focus on energy lending. Based in Dallas , this new team will have Darrell Holley serving as Managing Director and Global Head of energy lending.  The new team has significant expertise in energy lending and will complement UBS’s existing Energy Banking team in Houston and New York .  Holley will report to Stephen Trauber, Global Head of Energy banking at UBS. Previously, Holley was with Fortis Bank in Dallas , where he was Global Head of Oil and Gas banking.  Over the last month, UBS added more than a dozen of Managing Directors to its Investment Banking Department. The focus on the energy lending business is a strategic move as a result of the energy sector’s resiliency during the economic ...

UBS AG (UBS) intends to close its relationship with the Swiss government by purchasing its toxic assets back from the bad bank deal and hopes to turnaround by next year. With the recent rebound in the credit markets, the company believes that it could add back its assets to its balance sheets. However, this would not be possible before the second half of 2010. UBS AG is engaged in a fight with FINMA, Switzerland’s financial independent supervisory authority over its plan to opt out of the bad bank scheme. Under the bad bank scheme, the company incurs hefty charges for protecting against huge losses on toxic assets. However, FINMA has ruled out such possibilities in the midst of the current unstable market. Though the Swiss government sold its 9% stake in UBS last month, around $23.5 billion of UBS assets are there in the government’s bad bank....

On Wednesday, the US and the Swiss governments officially signed the new dual tax treaty which represents an important development for the Obama administration’s endeavor to fight international tax evasion.

The Swiss government has agreed to the international standard on exchange of data. The treaty calls for compulsory arbitration in some tax cases. It also demands changes in the dividend treatments when a pension or retirement fund holds shares.

The US government pursued a tax evasion case against UBS AG (UBS), which was settled last month with the Swiss bank agreeing to provide account details of its 4,450 American clients who allegedly evaded taxes.

Over the years, Swiss banks have enjoyed large foreign deposit inflows as its domestic tax system emphasizes extreme confidentiality. However, adoption of the Organization for Economic Co-operation and Development’s standards for tax co-operation coupled with the lawsuit between the US Internal Revenue Service and

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Even as investors get more and more bullish about the outlook for the U.S. economy, the economy’s underlying foundation continues to erode.

In a report to be released this week, the Obama administration will boost its 10-year projection for the federal budget deficit to about $9 trillion – an increase of roughly $2 trillion, or 29%, from its prior projection, Fox News reported over the weekend, citing a source from the Office of Management and Budget (OMB).

The new cumulative deficit projection – for 2010-2019 – replaces the administration’s previous estimate of $7.108 trillion. Changes in budget projections – whether they result in a surplus or a deficit – are often refined as economic conditions change. This new projection was necessary because the recession has gone on for so long, causing federal tax receipts to plunge – and because the economic rebound will be prolonged and weak, resulting

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The final word is out. UBS is handing over information on roughly 5,000 accounts and the IRS will back off its fishing expeditions on the remaining ~42,000 accounts.

Frankly, I’ve written so much about the UBS mess over the last year that I am sick of it…and I’m sick of the greedy, crooked UBS bankers and staff that stupidly thought they could use Swiss bank secrecy laws to cover their illegal tax evasion advice, while running up fat fees for themselves and billions in deposits for UBS.

This thoughtless criminal activity not only added to the instability of UBS – already $50 billion in the hole because of bad investments exposed by the global recession – but their conduct needlessly called into question the admirable privacy policies and bank secrecy laws of the Swiss government.

Asking for it

UBS tarnished not only its own reputation,

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Offshore account holders wait for the knife to fall, says Raife Neuman, tax planner for Bonner & Partners Family Office. The question is: How sharp it will be?

As I’ve written before, the Obama administration has given offshore tax avoiders a chance to come clean; but for some, the door is closing quickly. At issue is the IRS crackdown on individuals holding US securities in offshore accounts who don’t pay taxes on their earnings.

It was a nice little gig until the IRS took advantage of the dire economic situation and started shaking down Swiss bank UBS. The IRS is demanding that UBS turn over the names of US citizens with fabled Swiss bank accounts.

While waving its big stick at UBS, the IRS gave individuals the opportunity to come forth with their accounts themselves – accompanied by a penalty, of course. The implied threat is that if you don’t

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One day before the Swiss-based financial entity UBS AG (UBS) hearing was set to begin with respect to the Internal Revenue Service's effort to identify thousands of suspected American tax evaders, the U.S. and Swiss governments and UBS asked a federal judge for a delay. The case, seeking the identities of some 52,000 wealthy American clients suspected of hiding $15 billion at UBS, has already made unfavorable ripples through the international banking system. The one-page motion filed in Miami asked for a the hearing to be rescheduled for Aug. 3, 2009, in order to allow the two governments to continue their discussions seeking a resolution of this matter, unless a deal is reached beforehand. A request for a postponement that allows parties in civil cases extra time to settle out of court is relatively routine. Per the U.S. Justice Department, any agreement would require UBS ...

From the close of trading in New York on Wednesday afternoon at 5:15 Eastern Time…and the close of trading 24 hours later on Thursday at the same time…the U.S. dollar lost about 90 basis points. That’s a big drop. Gold’s response? Up three bucks…and silver was actually down on the day.

Yesterday’s low tick on the U.S. dollar occurred around 2 p.m. in New York at 79.72 cents…plus or minus a couple of ticks. Gold’s peak price in the first few days of June was around $990…when the dollar printed a low of about 78.70 cents. In five weeks, the U.S. dollar has gained a full cent [one percent and change], while the US$ gold price has been hit for 77 big ones. That’s a drop of 7.8%.

The point I’m making here is that this decline in the gold and silver price over the last five weeks has had

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Bias to sell dollars fades away…  Trading in yesterday’s clothes…   More thoughts on China…   Shadow Inventory… And Now… Today’s Pfennig! Good day… And a Wonderful Wednesday to you! Tuesday ended up being a very nice day, except for the currencies. After signing off yesterday and telling you how I had watched the euro climb back to 1.4025, it just couldn’t hold that figure or add to 1.4025.. And all the thoughts that had held the dollar hostage earlier that morning, being the China going to G-8, and so on, just faded like a black shirt put through 100 washes!

So… When I came in on Tuesday, the euro was 1.3920… When I came in this morning, the euro was trading 1.3925… Trading with yesterday’s clothes on. Back and forth, back and forth, the currencies seem to be in a rut… So, what happened to all the thoughts yesterday that China was making its first

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