What’s yr advice on UBS, TT?

In Banks, GIC on 16/09/2011 at 7:31 am

GIC’s big loss-making investment in UBS happened on Tony Tan’s watch at GIC.

Given the latest problem at UBS, a US$2bn “unauthorized” loss (anyone ever heard of an “authorized” loss?”, and Tony Tan’s boasting of his expertise, PM should ask him for advice on what to do with this long-term investment?

Too bad, the president can only give advice and be a security guard. In investment management and investment banking, there is a school of thought that believes that those who created the shit, should clean up the mess themselves.

Update at 4.15pm on 16 September 2011

Local paper reported that the book loss on GIC’s 6.4% in UBS is S$10bn based on yesterday’s closing price of UBS shares.

  1. With so much money to invest, a SWF may have trouble finding good values (unless you are WB.) Perhaps PAP should declare a special dividends in USD, RMB, Euro(?!) for citizens to invest in individual trust accounts overseas. The accounts can be withdrawn for education, healthcare, housing, and retirement under some guidelines. A smaller SWF can be more nimble and hopefully more successful. Better still, the reign of PAP will likely continue for 2 more decades with the largesse.

  2. For a rogue trader to lose all the two billion is unbelievable either its very bad management or this guy is being made a scapegoat.
    Does this mean that anyone can manipulate with all the bank’s monies without authorisations or limit.
    Many years ago, a London Bank was brought to it’s knees by a young trader, is this no lesson at all?

  3. PAP and TT will say once in 100 yrs event lah. Continue to hold for another 100 yrs. Sure will huat one.

    US$2B is peanuts lah. Prop traders with $100M accounts can leverage to easily $3B. It’s all about extreme strict risk mgmt and position sizing. Obviously this guy incurred job or bonus destructing losses, and thought he can quietly get behind the rules by overleveraging and manipulating limits. He thought he can quietly reverse losses and preserve job and/or fat bonus, but end up making even more disastrous trades. Poor command & control of trading desks at London UBS office.

  4. TT previously don’t like the EP post but have to take it now as being the GIC job is even more uncomfortable given he had to receive portfolio statement every now and then being reminded of this disastrous decision of UBS.

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