UBS Mess Gets Extra Stinky

Anyone who thought keeping up with the rumors swirling around financials was tough, should try keeping up with the actual news.  The banking sector is caught in a heated race to determine which bank can destroy its reputation the fastest.  It is hard to pinpoint an exact winner of the negative publicity wars, but UBS, for now, seems to have surpassed Citibank and Lehman to become the new Britney Spears of the financial world.  Every day begins and ends with some story about a loss, or enforcement action, much like Britney's every absurd move was documented until the extent of her carelessness turned the world against her.  Here are a few interesting parallels:

• UBS writes-down $38 billion in assets (Britney wrecks her car!)
• UBS accused of fraud by Massachusetts attorney general on auction-rate securities (Britney drops her kid!)
• Former UBS banker pleads guilty and helps Justice Department bring case against UBS (Britney shaves her head!)
• Four UBS sissy directors step down because they are terrified of facing shareholders (Britney misplaces kids, loses custody!)
• Justice Department wins court order to obtain information about UBS clients seeking to evade taxes (Britney makes out with random college kid who sells the story to the tabloids!)  

How much more painful news can a bank take before private banking customers start fleeing for the exits?  It's hard to say.  The public can be incredibly forgiving.  After all, Britney was invited to perform at the VMA's long after it was crystal clear that she was a complete train wreck.  Private client customers have yet to move their assets en masse.  But then again, where are they going to take their account?  Citi?  It is becoming increasingly clear that if you had significant assets you wanted to preserve, UBS knew how to keep them from being depleted by taxes.  It's what the Swiss are born and raised to do.  Unfortunately, regulators are not keen on tax evaders.  As it happens, attorney generals dislike fraud and investors hate to lose money.  Did these guys do anything right in the past few years?  They had very nice commercials.  U and US, UBS.  Very clever.  Although it appears as if they need to change their slogan to U and US PLUS the IRS.