Serious Anatomy of a S’pore Financial Disaster: GIC’s investment in UBS

[frenchbriefs]

We could have lost more money elsewhere if not in UBS. We need to account for that too.

Ho Jinx is a gifted investor,i blame UBS for not going bankrupt.

 

[Papsmearer]

where is all the so called good for nothing ministars who should be calling for the head of temashake to come clear and tell her the ancient china story of monkey who got his middle finger and cock chopped off.

Remember this quote from PAP MP asshole Chee Hong Tat?

Mr Chee Hong Tat, Minister of State (Communications and Information, and Health) noted that trust is an essential element for effective leadership. “So, when the WP talks about the importance of transparency and having the Freedom of Information Act, I hope they go beyond talking about these ideas and to put them into practice, including in the running of their town council,” Mr Chee said.

The PAP standard is really strange. A few million $ alleged mismanagement by WP town councils and the Cheebye Hong Tat is making snide remarks about transparency. But a proven multibillion $ loss by GIC, and there is no call for transparency by the PAP? What a joke.

 

[frenchbriefs]

alright i found some more data.....UBS stock price was roughly $63 during May 2007,that was about the time words of UBS subprime problems was beginning to leak out,basically UBS chart looks like a diagonal line straight down from left to right,before hitting bottom at $12 to $16 or so and staying horizontal for the next 10 years....

so i supposed Temasek invested in UBS at the beginning of the crisis and agreed to a price of $47 and did not expect the shares to continue sliding until it hit rock bottom in 2008?its really ridiculous how Temasek did not cover its ass from the huge potential downside during the crisis,essentially UBS tricked Temasek into buying a 10 billion dollar put option except they didnt really have any option,UBS had nothing much to lose at $47 i mean their banks was in serious trouble,they probably saw whats in their books and shat their pants,their stock price wasnt going to go up much anytime soon.and they took Temasek's 10 billion and gave them back a bunch of worthless stock.

If u asked me who was stupider those people who bought those MBS and CDOs and thought it was free money,or those who sold insurance on it like AIG.... or temasek holdings......

 

[Papsmearer]

The actual investment itself was not in UBS common shares, nor convertible preferred shares (how Buffet bought his Goldman Sachs shares), but instead, it was in mandatory convertible notes with a coupon rate of 9%. In other words, UBS sold GIC its own IOUs. But the worse feature of the notes that GIC bought was the mandatory convertible feature. This feature stipulated that these notes must be converted to UBS common shares in 2 years time.

i dunno anything about UBS bank,but this is actually a pretty good deal for Temasek no?basically the deal temasek got was it gave 11 billion swiss francs to UBS as a loan at 9 percent interest....if u watch shark tank alot,these types of loans are pretty common and is pretty good for the shark investors,not as fantastic as equity deals but not as risky either and a surefire to make some money,what happens is the sharks are guaranteed their money back after a short period of time usually a few years at a interest rate usually between 9 to 12 percent,and as a teaser at the end of the deal,they get a small taste of the pie,usually like 5 percent equity of the company or something.of course they only offer these deals to companies that have shown strong sales in the past,strong growth,great cashflow and margins and a strong balance sheet.this is also great for entrepreneurs who urgently require cash for a reason,like expansion to meet demand,but also do not wish to dilute their shareholdings by selling away 30 percent of the company or something.

also i assume this convertible note is like an call option,it gives the buyer the option to buy a certain share in the future at a certain price.either the note was to be converted to stock at the market price,or at a predetermined price to limit the price they have to pay to ensure maximum upside should the stock rise...the target date was 2010,when the market has made a strong recovery,stocks everywhere should have been carried by the rising tide of recovery,they should have made a ton of money if everything went well,i supposed they picked a lemon,UBS probably had huge exposure to subprime or something.

but why the hell would they set the predetermined price at SF$47?thats insane......i cant find any UBS stock data before 2009 nov,so i dunno what price UBS was at,but why not just invest in the common stock straight at $16 a pop if they wanted to invest in UBS?or just have it convert at market price so u dont make or lose anything,but u earn 9 percent interest in the meantime,or buy a bunch of options?what is the point of this deal even?why set the price so high u are guaranteed to lose?is there any source confirmation on the $47 share price?whats the point of being a huge soverign fund and having massive capital if u dont use ur bargaining power?

GIC invested $11 billion swiss francs in exchange for UBS notes. These notes were in total convertible to 230.7 million common shares. So, at that time, the notes were worth 230.7 million shares. $11 billion SF divided by 230.7 million shares works out to $47 SF per share.

The convertible feature was mandatory. which means its compulsory for GIC to change these notes into common shares exactly 2 years after they invested. That means they cannot convert it 2 months before this 2 year date or 3 weeks after the 2 year date. It has to be exactly on this predetermined date.

Basically, the swiss knew that their stock price would not appreciate at all in 2 years. They knew their bank was bleeding cash like crazy, and in fact only emergency cash injections from suckers like GIC kept them afloat. Even then, it was not enough as they had to ask the Swiss govt for a bail out. By indirectly exchanging 230.7 million common shares for $11 billion SF, they had in fact lock in their stock price at SF$47. They knew the stock price was going to take a hit. They knew they may even go under completely. Given this knowledge, they know that their stock price will never see SF$47 again for a long long time. They knew all this. GIC should have insisted on the 9% coupon rate on the notes, but not be forced into swapping it for common shares in 2 years. They should have asked for a longer period to make the swap, and then only at their option. The price of the stock has to exceed SF$47 in 2 years for them to make a profit. What are the odds of that. Zero.

 

[Papsmearer]

alright i found some more data.....UBS stock price was roughly $63 during May 2007,that was about the time words of UBS subprime problems was beginning to leak out,basically UBS chart looks like a diagonal line straight down from left to right,before hitting bottom at $12 to $16 or so and staying horizontal for the next 10 years....

so i supposed Temasek invested in UBS at the beginning of the crisis and agreed to a price of $47 and did not expect the shares to continue sliding until it hit rock bottom in 2008?its really ridiculous how Temasek did not cover its ass from the huge potential downside during the crisis,essentially UBS tricked Temasek into buying a 10 billion dollar put option except they didnt really have any option,UBS had nothing much to lose at $47 i mean their banks was in serious trouble,they probably saw whats in their books and shat their pants,their stock price wasnt going to go up much anytime soon.and they took Temasek's 10 billion and gave them back a bunch of worthless stock.

If u asked me who was stupider those people who bought those MBS and CDOs and thought it was free money,or those who sold insurance on it like AIG or temasek holdings......

Exactly. UBS knew the amount of toxic loans it had on its books. It knew the amount of its exposure in the subprime mess. It knew how much it would have to write off in the next few years. They knew how much of a hit their stock price would take because of all of this. In fact, if the Swiss govt had not bailed them out, they would be bankrupt today and GIC would have lost all its money. SO, they locked in the price at SF$47 to these suckers from singapore. Compare this to what Buffet did. He waited until Goldman Sachs was half dead from the crisis, then in 2011, he invested in them. But he did not take a note or bond. Instead he bought preferred stock from Goldman Sachs. This meant that he got a guaranteed dividend every year. And in addition, he could convert these preferred shares into common shares at a time of his own choosing. So, he just waited for the GS shares to come back up and then converted them and make over $2 billion.

This whole shit can be blamed on Old fart who thought he was a savvy pundit. why bother to have a big support and research staff in GIC if you are going to over ride them and force the investment.

 

[frenchbriefs]

GIC invested $11 billion swiss francs in exchange for UBS notes. These notes were in total convertible to 230.7 million common shares. So, at that time, the notes were worth 230.7 million shares. $11 billion SF divided by 230.7 million shares works out to $47 SF per share.

The convertible feature was mandatory. which means its compulsory for GIC to change these notes into common shares exactly 2 years after they invested. That means they cannot convert it 2 months before this 2 year date or 3 weeks after the 2 year date. It has to be exactly on this predetermined date.

Basically, the swiss knew that their stock price would not appreciate at all in 2 years. They knew their bank was bleeding cash like crazy, and in fact only emergency cash injections from suckers like GIC kept them afloat. Even then, it was not enough as they had to ask the Swiss govt for a bail out. By indirectly exchanging 230.7 million common shares for $11 billion SF, they had in fact lock in their stock price at SF$47. They knew the stock price was going to take a hit. They knew they may even go under completely. Given this knowledge, they know that their stock price will never see SF$47 again for a long long time. They knew all this. GIC should have insisted on the 9% coupon rate on the notes, but not be forced into swapping it for common shares in 2 years. They should have asked for a longer period to make the swap, and then only at their option. The price of the stock has to exceed SF$47 in 2 years for them to make a profit. What are the odds of that. Zero.

haha what a fail,the entire deal was structured to screw temasek in the ass and they didnt see it coming......my god whoever is responsible for this shenenigans should be strung up by the balls and lynched.

 

[scroobal]

It is interesting how the thought process worked for investment by both Temasek and GIC.

1. The banks that had the issue caused the fall of markets all over the World including very well run companies with excellent track record. GE the oldest listed entity with blue chip pedigree was one seeing its shares plunging well below $4.

2. Most investment professionals and investors who had spare cash would have moped these blue chips which were underpriced.

3. Not Temasek and GIC and what is interesting is that they picked the companies that called them first. Its on record that Barclays and UIC amongst the others called Ho Ching amongst others directly. She must have felt honoured. A Ang Mom calling for help must have given them the impression that they were respected for their investment prowess. And they plunged in.

4. It now appears that the Qatari Sovereign Fund was also approached to rescue Barclays and that Barclays paid a bribe and the Qatari made Barclays provide the funding as a loan at attractive terms to buy the stake. They did not use their cash reserves. This is now under investigation.

5. Imagine they invested in the very banks that created the mess while non-bank stocks which fell dramatically in the crisis was not scooped up. They used their cash reserves on high risk assets.

 

[Narong Wongwan]

haha what a fail,the entire deal was structured to screw temasek in the ass and they didnt see it coming......my god whoever is responsible for this shenenigans should be strung up by the balls and lynched.

Whore Jinx can't be so stupid or suay.
Probably got a lot of undertable kickback for leegime run road fund.
Lose cpf money but got back personal guaranteed commission.

 

[virus]

alright i found some more data.....UBS stock price was roughly $63 during May 2007,that was about the time words of UBS subprime problems was beginning to leak out,basically UBS chart looks like a diagonal line straight down from left to right,before hitting bottom at $12 to $16 or so and staying horizontal for the next 10 years....

so i supposed Temasek invested in UBS at the beginning of the crisis and agreed to a price of $47 and did not expect the shares to continue sliding until it hit rock bottom in 2008?its really ridiculous how Temasek did not cover its ass from the huge potential downside during the crisis,essentially UBS tricked Temasek into buying a 10 billion dollar put option except they didnt really have any option,UBS had nothing much to lose at $47 i mean their banks was in serious trouble,they probably saw whats in their books and shat their pants,their stock price wasnt going to go up much anytime soon.and they took Temasek's 10 billion and gave them back a bunch of worthless stock.

If u asked me who was stupider those people who bought those MBS and CDOs and thought it was free money,or those who sold insurance on it like AIG.... or temasek holdings......

woody will stoop to tell you "welcome to the swiss standards of losing"

 

[virus]

It is interesting how the thought process worked for investment by both Temasek and GIC.

1. The banks that had the issue caused the fall of markets all over the World including very well run companies with excellent track record. GE the oldest listed entity with blue chip pedigree was one seeing its shares plunging well below $4.

2. Most investment professionals and investors who had spare cash would have moped these blue chips which were underpriced.

3. Not Temasek and GIC and what is interesting is that they picked the companies that called them first. Its on record that Barclays and UIC amongst the others called Ho Ching amongst others directly. She must have felt honoured. A Ang Mom calling for help must have given them the impression that they were respected for their investment prowess. And they plunged in.

4. It now appears that the Qatari Sovereign Fund was also approached to rescue Barclays and that Barclays paid a bribe and the Qatari made Barclays provide the funding as a loan at attractive terms to buy the stake. They did not use their cash reserves. This is now under investigation.

5. Imagine they invested in the very banks that created the mess while non-bank stocks which fell dramatically in the crisis was not scooped up. They used their cash reserves on high risk assets.

part and pact of the masons, save each other in times of needs. hao lian lao lan pinkie just have to stick his arse up in the skies

 

[nayr69sg]

It is interesting how the thought process worked for investment by both Temasek and GIC.

1. The banks that had the issue caused the fall of markets all over the World including very well run companies with excellent track record. GE the oldest listed entity with blue chip pedigree was one seeing its shares plunging well below $4.

2. Most investment professionals and investors who had spare cash would have moped these blue chips which were underpriced.

3. Not Temasek and GIC and what is interesting is that they picked the companies that called them first. Its on record that Barclays and UIC amongst the others called Ho Ching amongst others directly. She must have felt honoured. A Ang Mom calling for help must have given them the impression that they were respected for their investment prowess. And they plunged in.

4. It now appears that the Qatari Sovereign Fund was also approached to rescue Barclays and that Barclays paid a bribe and the Qatari made Barclays provide the funding as a loan at attractive terms to buy the stake. They did not use their cash reserves. This is now under investigation.

5. Imagine they invested in the very banks that created the mess while non-bank stocks which fell dramatically in the crisis was not scooped up. They used their cash reserves on high risk assets.

Sinkies continue to ignore the truth that is right before them. Singapore is in financial difficulty. The pyramid scheme called CPF is in danger of collapsing. This is why they came up with Medishield Life as a way to reduce the debt burden. Also the increase in water is another way to keep get revenue to keep the machinery going.

It is over already. Get out if you can. And quickly cash out your CPF before the CPF collapses.

 

[ahleebabasingaporethief]

Whore Jinx can't be so stupid or suay.
Probably got a lot of undertable kickback for leegime run road fund.
Lose cpf money but got back personal guaranteed commission.

Sell UBS to buy more NOBLE shares? What is their current losses in NOBLE?

 

[eatshitndie]

swiss helped sg during formative years. this was quid pro quo lah knowing it was very high risk but with backing by swiss gov. old fart in his ashes still feel indebted to the swiss. drop in the bucket considering some consolation on shitibank rescue during subprime crisis. lose some win some but overall remain trusted ally of swiss. sinkies should feel proud every time they visit swiss alps for holiday. swiss chalets should give sinkies a discount. :p

 

[scroobal]

When the financial crisis was unfolding across the World, the highly liquid money market collapsed. Banks and companies in trouble had only 2 alternatives - their Government to shore them up or investment funds including sovereign funds. Warren Buffet fielded the most calls and turned them down. In the end the Govt's stepped in.

The Singaporeans probably had never received a call from the 1st World to rescue them and felt honoured. I am certain if Goh Keng See and Hon Sui Sen had been around they would have turned them down. It reminds me of history when Germany struck and UK PM Neville Chamberlain had to go as he thought he knew the Germans. For some bizarre reason, the Australian PM Bob Menzies genuinely thought that he was the man to take charge of the British Empire and actually left for London. Talk about delusional.

This is no different to a widow given a large sum as payout for her husband death due to an industrial accident and people approaching her to invest in various schemes. And she agreed.

part and pact of the masons, save each other in times of needs. hao lian lao lan pinkie just have to stick his arse up in the skies

 

[zhihau]

swiss chalets should give sinkies a discount. :p

Then we can enjoy a true blue Swiss standards of living!
By the way, when GST increase ah?

 

[eatshitndie]

Then we can enjoy a true blue Swiss standards of living!
By the way, when GST increase ah?

cumming cumming. need to prop up reserve ok.

 

[Papsmearer]

haha what a fail,the entire deal was structured to screw temasek in the ass and they didnt see it coming......my god whoever is responsible for this shenenigans should be strung up by the balls and lynched.

Savvy business people like Buffet and Trump can spot this scam coming a million miles away. Can you imagine now, its almost 10 years into the investment and still the stock price cannot break SF$20, not even half of what they paid for it. My understanding is that Old Fart was a big influence on this deal. He has the angmo pinkerton syndrome and got the hard on really bad for the Swiss, so anything that comes out of their asshole is like shit to him. This are the same swiss that cheated the Jews of billions of $ after WW2.

 

[Papsmearer]

swiss helped sg during formative years. this was quid pro quo lah knowing it was very high risk but with backing by swiss gov. old fart in his ashes still feel indebted to the swiss. drop in the bucket considering some consolation on shitibank rescue during subprime crisis. lose some win some but overall remain trusted ally of swiss. sinkies should feel proud every time they visit swiss alps for holiday. swiss chalets should give sinkies a discount. :p

what shit are you talking about? The swiss feel threatened by zikapore, and consider zikapore a rival in the financial market. Ever since singapore modeled itself on the swiss banking system with its anonymity and no questions asked system, many swiss banking customers have fled to zikapore. Especially after the US DOJ start asking them for their customer information. The swiss would love to fuck zikapore over, and they did just that.

 

[Papsmearer]

haha what a fail,the entire deal was structured to screw temasek in the ass and they didnt see it coming......my god whoever is responsible for this shenenigans should be strung up by the balls and lynched.

One of them is burned to ashes now
the other is the President of zikapore. Both are relatives of Gay Loong. Who you want to lynch first?

 

[Papsmearer]

Whore Jinx can't be so stupid or suay.
Probably got a lot of undertable kickback for leegime run road fund.
Lose cpf money but got back personal guaranteed commission.

That is definitely going on. A Temasek insider told me how this operates

A business broker will approach Whore Jinx with a business that wants to sell a large stake in it. Lets say this is an Indonesian bank.
The broker gets paid a commission by the bank to find an investor to take a large stake in their bank. The broker wine and dines Whore Jinx and convinces her this is a good deal, and even provides partial disclosure of the financial situation. Whore Jinx loves the broker and buys the deal. The Temasek compliance department goes thru the potential investment with a fine tooth comb and do their due diligence. Used to be, there were people in the department that would say "You want to invest how much in this shit company?!!!!!". These people don't work there anymore. SOmeone in Whore Jinx office will call the head of department doing the due diligence and say something like "Boss Whore really really likes this deal. You get the hint?" The deal is then duly signed off and many notes and platitudes are paid to how wise Whore Jinx is and how much money they will make.

But in reality, the deal is done already at the top, and the compliance is made to approve and rubber stamp it. Not the other way around. Hence you have many shit investments. I am sure some of the kickback is going on. The way they invest and the companies they invest in, makes no sense whatsoever. Unless some one at the top gets something directly. Even a 5% direct commission to whore jinx is hundreds of millions $. I wonder what Chip Goodyear saw there. Too bad he will not disclose the real workings of Temasek. But what ever he saw scared him so much that he got the hell out there double quick time.