UBS About to Settle

Every time the venerable Swiss banking hulk appears in the news my mind swings instantly to one of the first of the new breed of GOP nasty-guys who monopolized my anger button: Texas Senator and John McCain adviser Phil Graham. 

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. Anunintentionally hilarious interview with Gramm on theWall 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. As this one-year chart shows, UBS’s stock lost nearly 70 percent of its value and now stands at levels not seen since 2002, when Gramm signed up. [Slate]

Named one of the top 25 responsible for the financial melt-down by Time magazine and the man who opined that his fellow citizens (who he hoped would vote for his man McCainn) were “a nation of whiners” he makes hackles rise every time he opens his mouth.

Sweet merciful crap, will this guy ever just shut the hell up already? Economics-wise, he’s History’s Greatest Monster. He and his wife Wendy were prime shakers behind energy deregulation—leading directly to the Enron scandal and collapse (Wendy both helped deregulate Enron and then went to work for them at a tidy salary, ka-ching, because that is how the Phil Gramm household operates.) His deregulation penchant also brought us all the unregulated glory of credit default swaps, leading Time magazine to call him out as one of the 25 People to Blame for the Financial Crisis. Oh, and then he fled from the senate to a sweetheart lobbyist position at UBS, just in time for UBS to wreck itself mightily in the subprime mortgage business, get called out for intentionally cheating customers, and be probed for assisting client money laundering. If there’s one guy who knows how to cause epic, nation-shattering economic fiascos, it’s Phil Gramm. If you told me he was one of the four horsemen of the economic apocalypse, my only reply would be to wonder if maybe he wasn’t actually two or three of them.

Hunter at Daily Kos

Anyhoo, UBS was in the news today:

UBS, the Swiss banking giant, is close to reaching settlements with American and British authorities over the manipulation of interest rates, the latest case in a multiyear investigation that has rattled the financial industry and spurred a public outcry for broad reform.

UBS is expected to pay more than $450 million to settle claims that some employees reported false rates to increase the bank’s profit, according to officials briefed on the matter who spoke on the condition of anonymity because the talks were private.

If the bank agrees to the deals with various authorities, the collective penalties would yield the largest total fines to date related to the rate-rigging inquiry and would increase the likelihood that other financial institutions would face stiff penalties.

You  think Graham is going to stand up and say a word of contrition? Nah.  He’s saving his mouth for some nasty words for the poor, about whom he once said that food stamps should be cut because “all our poor people are fat.” 

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