PHIL GRAMM, UBS AND "MENTAL RECESSION"

Phil Gramm is an executive with the Swiss bank UBS, the same bank that is under investigation for helping extremely rich Americans illegally hide income from the IRS. I'm not claiming that Gramm is directly responsible for this but he was hired by the U.S. branch of UBS and he should be aware of these issues. As Daniel Gross of Newsweek noted in "The Senator and the Swiss Bank "

As an adviser, an economist, an expert in the ways of Washington and in the American financial system, part of Gramm's job surely was to advise the bank how to stay out of investment and regulatory trouble. Oops!

UBS stock has been tanking over the last year:



And UBS has written off tens of billions because of the mortgage crisis:

UBS's investment banking unit made disastrous forays into subprime lending. Last December, having already announced a third-quarter loss, UBS raised about $13 billion to replenish its balance sheets, mostly from the Government of Singapore Investment Corp. In the fourth quarter of 2007 and the first quarter of 2008, it racked up Mont Blanc-sized losses on subprime debt of nearly $32 billion. In May, it sold about $15 billion worth of mortgage-related assets to the investment firm BlackRock—but only after it agreed to finance most of the purchase price. In June, UBS raised another $15.5 billion in a rights offering. The credit losses—some $38 billion so far, according to UBS—caused the bank to replace its chairman and install new leadership at its investment bank.

Will someone ask Gramm if these write-offs are merely "mental"?