UBS and Texas

[Dover]

Just a collection of articles outlining some of UBS's dealings in Texas. No doubt the tip
of the iceberg:


Former Senator From Texas/McCain Advisor at UBS

Sen. Phil Gramm has been at the Swiss banking giant, UBS since 2002. During that time, the bank has (like many banks/brokers) encountered some major losses. This fact may take on more importance as the US Presidential election draws near as Sen. Gramm has been touted as a possible Secretary of the Treasury in a McCain administration.

Quote:
Former Texas Sen. Phil Gramm has emerged as the key behind-the-scenes economics/Wall Street guy for John McCain and is being touted as the treasury secretary in waiting. Since 2002, Gramm has been an executive with the U.S. operations of UBS, the giant Swiss Bank. An unintentionally hilarious interview with Gramm on the Wall Street Journal editorial page last week asserted that Gramm has "been a key instigator of some of the biggest money-making UBS deals of recent years." The interview was noteworthy not just for first-class butt-kissing, but for deliberately gliding over the avalanche of disasters in the past year that has turned UBS from a respected Swiss titan of discretion and risk management into a laughing stock.
…
UBS used to stand for Union Bank of Switzerland. But perhaps it should stand for Untold Billions Squandered.

Here is a link to the entire article, which article has many links to other informative articles as well: http://www.slate.com/id/2194933/



Texas Republican to Join UBS After He Retires From Senate
October 8, 2002
http://query.nytimes.com/gst/fullpage.html?res=9E07EFDB103BF93BA35753C1A9649C8B63

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Newsweek:
The Senator and the Swiss Bank
Did Texas' Phil Gramm help undo UBS?
Jul 8, 2008
http://www.newsweek.com/id/145011?from=rss

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Wealthy Americans Under Scrutiny in UBS Case
June 6, 2008

http://www.shapleigh.org/news/1988-wealthy-americans-under-scrutiny-in-ubs-case


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John McCain's Gramm Gamble
The GOP presidential nominee is relying on the ex-senator who helped bring you the mortgage crisis and Rick Perry.
Texas Observer
http://www.texasobserver.org/article.php?aid=2767

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UBS latest to offer services to Houston's mega-millionaires
http://www.bizjournals.com/houston/stories/2008/04/07/story6.html

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Gov. Perry's son hired by UBS
Dallas Morning News
Feb. 13, 2007

AUSTIN – UBS, one of two large financial firms consulting with the governor's office over the possible sale of the Texas lottery, hired Gov. Rick Perry's son to work in its Dallas office about two weeks ago.

The governor's office said that there is no relationship between the two events and that Griffin Perry, 23, is a bright young economist who is pursuing a career on his own merits.

..snip..

The staff of the governor's office called both Morgan Stanley and UBS for expert advice on the potential sale price of the lottery, Mr. Black said.

UBS is consulting with Illinois and New Jersey, which are also considering selling their lotteries.

Also involved in the UBS consulting team is former U.S. Sen. Phil Gramm, a longtime friend of the governor. He has met with one of the governor's top aides to discuss the idea but not with Mr. Perry, Mr. Black said last week.

Mr. Gramm, a UBS vice president of investment banking, works out of the company's New York office. Griffin Perry will be working in the separate area of personal wealth management, Mr. Black said...cont'd

http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/021307dntexperry.1c174d6.html


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Gee, I wonder where Ken Lay's Millions went to.....?



Citigroup, UBS to buy Enron
Dec. 10, 2001
http://www.click2houston.com/news/1114910/detail.html

UBS Buys Enron's Trading Business
http://www.accessmylibrary.com/coms2/summary_0286-8688326_ITM

[Dover]

1. UBS/Perry/Gramm and Tx. Teachers Retirement System health fund.

Commentary of the Day - January 26, 2004: Doing the Texas Two-Step.

As any regular reader of Molly Ivins knows, the great state of Texas is a top-notch incubator of crazy public policy schemes. According to an article in yesterday's Los Angeles Times by staff writer Scott Gould, the latest of these is a clever variation of the "dead peasant" scam that is being foisted on the Texas Teacher Retirement System by none other than former Texas senator Phil Gramm, who now works for the UBS Investment Bank of New York. Alert readers of The Irascible Professor might recall that Phil Gramm's wife Wendy Gramm, while Chair of the Commodity Futures Trading Commission, played a key role in pushing through key regulatory exemptions that allowed Enron to game the electricity trading market without government oversight. (At the same time Phil Gramm was collecting six-figure campaign contributions from Enron.)

For those of you who might not be familiar with Russian history, the "dead peasant" scam refers to the practice of buying the ownership rights to dead serfs then selling those rights before the buyer becomes aware of the fact that the serfs are dead. Under the variation of the scheme being promoted by Phil Gramm and Texas governor Rick Perry, the state of Texas would float a bond issue using Gramm's employer -- UBS Investment Bank -- as the underwriter. The proceeds from these bonds then would be used to buy annuities through UBS PaineWebber Inc. The annuities would be used to pay the premiums on life insurance policies that would be taken out on members of the Texas Teachers Retirement System. These life insurance policies would not provide any benefits to the members or their families. Instead, upon the death of an insured member, the proceeds from the life insurance policy would be used to retire the bonds, and if anything is left over it would go to the Texas Teachers Retirement System health fund. The fund currently faces a major long-term shortfall owing to a $30 million loss they suffered when Enron went into bankruptcy and the poor investment climate from 1999 to 2002, as well as to changes in the system put into place to help cover the deficit in the Texas state budget.

On the surface the Perry-Gramm scheme seems to be better than sliced bread. Except for the underlying gouhlish nature of the idea of betting on the longevity of retired teachers, everyone would appear to win. Various UBS subsidiaries would collect millions of dollars in fees and commissions, and the Texas Teachers Retirement System health fund presumably would net a tidy sum.

However, as any serious investor knows, when something sounds too good to be true it usually is. The catch in this scheme is a subtle one. Life insurance companies are not run by fools. The insurers are in business to make money. They do that by investing premiums conservatively, and by making sure that they pay out less in benefits than they make on their investments. They employ armies of actuaries to make sure that they won't be caught short if there is a sudden spike in the mortality of the people they insure. The bottom line is that life insurance, when viewed as an investment, is a lousy one. The typical rate of return is less than 4%.

Remember that to buy the annuities to pay those insurance premiums, Texas will have to float bonds. The investors who buy bonds also are not fools. They, in effect, will be loaning Texas money. They want two things in return. The first is a decent rate of return on their loan, and the second is the eventual return of their principal. The current rate of return on high quality tax-exempt bonds is right around the 4% level. So at best one could hope to break even if the Perry-Gramm scheme is adopted. But, that does not take into consideration the commissions and management fees that will have to be paid to UBS. Those are likely to add another one or two percent in costs. The net effect likely will be that the insurance payments fall short of what is needed to service the bonds, the retirement system health fund gets nothing, and the Texas taxpayers end up holding the bag because in order to get that low 4% bond rate they would have had to back them with the state's credit...cont'd

http://irascibleprofessor.com/comments-01-26-04.htm

[Dover]

2. UBS/Perry/Tx. Super HIghway

Revolving roles stir concerns in Austin
Interest groups fear conflicts of interest as Perry aides switch roles

February 16, 2005

By CHRISTY HOPPE / The Dallas Morning News


AUSTIN – Five months ago, Mike Toomey was Gov. Rick Perry's chief of staff, directing virtually every aspect of state government. Now he's a high-dollar lobbyist for gambling, tobacco and health care interests that will win or lose hundreds of millions in the evolving policies that Mr. Toomey



...Former senior adviser Ray Sullivan didn't lobby before, but he does now.

Among his clients is UBS, the Switzerland-based financial institution recently picked to be the main bond underwriter for part of Mr. Perry's superhighway.

Mr. Sullivan said his clients benefit from his years of service, which include working at the U.S. Capitol, running political campaigns and working for the governor.

"I really view my job and my advice as finding ways to help the state's elected officials

http://www.dallasnews.com/sharedcontent/dws/news/texassouthwest/legislature/stories/021705dntexlobbyists.3d66b.html

[Baby Snooks]

3. Rothschild Wannabes...

All of these "neo-con artists" are attempting to control the world economy by literally destroying it and Enron was one of the first companies that was declared insolvent when in fact, for all intents and purposes, it wasn't. They wanted the assets. And didn't care how they got them. They picked up the assets for the proverbial 10 cents on the dollar which is why the employees and the investors and shareholders were left with nothing but the proverbial 10 cents on the dollar.

They are all Rotschild wannabes. The problem is the Rothschilds knew what they were doing. These "neo-con artists" including the Bushes haven't the slightest idea what they're doing and really never did.

They're like economic termites. And the nest does seem to be in Texas.