In some further interesting developments for Switzerland, towards its slowing banking stature, bankers have been cautious and in some cases banned from travelling.
This has to be very bad for Swiss banks to not allow their top private bankers to travel outside Switzerland.
Private Banking, by default, is a relationship driven business where Private Bankers must meet their clients for various reasons including strengthening relationships, providing personalized services & advice and review investment portfolios among other things. With the fear of prosecutions and arrests looming heavily over private bankers, the decision by many large banks, including UBS, not to allow their top private bankers to travel abroad especially in Europe is a clear sign of distress.
The US, French and German governments in particular have aggressively pursued UBS and other Swiss banks including banks from Bahamas etc to declare all undeclared private banking accounts. According to reliable estimates, there is over USD 11 trillion lying in Swiss banks. This amount is usually undeclared in the countries of citizens to whom it belongs. There is a very fine line between Swiss legal interpretation of Swiss banking secrecy and banking secrecy as defined in other countries around the world. This line seems to be breaking down or at the very least narrowing down causing troubles in the minds of many clients around the world who were cloaked in secrecy behind the Swiss laws.
The fact that bankers are scared to travel to meet their top clients is a scary thought and in future Swiss bankers will continue to loosen their legal veil of secrecy and hence continue to lose their assets to other nations especially if the private banker is unable to travel for fear of prosecution (which essentially means that something illegal was indeed being done) and if Switzerland is same as any other country such as London, Singapore, Dubai or any other offshore tax free nation, then all other tax free nations (for non residents) will receive more client assets than they have received previously and have strong laws to protect the client with an assurance of no taxes and of course, the anonymity (of not being on the radar of US and other Governments who currently are aggressively pursuing Switzerland).
Excerpt:
"The restrictions come ahead of next week’s Group of 20 summit where a clampdown on tax havens is set to be discussed.
Under pressure from other countries, Switzerland, which is estimated to account for about a third of the world’s $11,000bn in clandestine personal wealth, agreed this month to ease its bank secrecy laws and accept international standards on tax transparency."
Swiss banks ban top executive travel
In the Financial Times
By Richard Milne in Geneva
Published: March 26 2009 19:08 | Last updated: March 26 2009 19:08
News | Opinions | Ideas | Unique Perspectives | Geopolitics | Global Trends | Stocks | Bonds | Luxury Real Estate | Citizenships | Hotels | Business Advice | Private Banking | Family Office | INDEPENDENT THINKING - EXTRAORDINARY GROWTH | Contact Us For Private Bank A/c in Singapore/Geneva, New Citizenships, Buy/Sell Hotels |
Friday, March 27, 2009
Wednesday, March 25, 2009
China and Russia propose a new currency instead of USD
It may be surprising but both China and Russia are proposing strongly to the IMF to come up with an alternate to a USD as an international reserve currency.
They have a point!
The point is that since China, Japan and Russia etc have been holding USD reserves and have thus invested in USD bonds, therefore, they are suffering due to the global imbalance. With United states having a deficit both in current account and its fiscal budget, it has to continue to issue more and more bonds which China, Russia, Japan and other nations have to buy (because for every new issue, there has to be a new buyer else the issue cannot be completed). Hence the fiscally and economically positive countries have ended up holding investments in a country, like USA, where there is no fiscal balance. This causes the imbalance in an interconnected world.
And now, if these countries holding the investment sell the investments, they cause a bigger imbalance, hence the conundrum and the question of an alternative currency.
We are certainly living through interesting times and this decade may be one of the worst over the past hundreds of years:
- Beginning in 2000, with a Technology Bust
- In 2001, denoted by 9/11
- Between 2002 until 2007, the best boom years in stocks and investments with wars in Iraq and Afghanistan and some of the worst terrorist events the planet has ever seen
- In 2008, the worst declines ever, descending into chaos with the financial landscape changing forever and getting worse
It appears that, going forward, with a proposed new currency solution being put forth by some of the strongest fiscal nations who wish to protect themselves, led by the BRIC nations, it seems we will see some more interesting times in 2010 and onwards in the ever changing financial landscape of the world.
This will become a very big issue very soon and will have great implications for all countries with millions of dollars shifting away from USD into other currencies via the proposed basket of currencies.
Financial Times:
China calls for new reserve currency
By Jamil Anderlini in Beijing
Published: March 23 2009 12:16 | Last updated: March 24 2009 00:06
Reuters:
Falling greenback fuels BRIC dollar reserve rethink
Mon Mar 23, 2009 3:00pm EDT
They have a point!
The point is that since China, Japan and Russia etc have been holding USD reserves and have thus invested in USD bonds, therefore, they are suffering due to the global imbalance. With United states having a deficit both in current account and its fiscal budget, it has to continue to issue more and more bonds which China, Russia, Japan and other nations have to buy (because for every new issue, there has to be a new buyer else the issue cannot be completed). Hence the fiscally and economically positive countries have ended up holding investments in a country, like USA, where there is no fiscal balance. This causes the imbalance in an interconnected world.
And now, if these countries holding the investment sell the investments, they cause a bigger imbalance, hence the conundrum and the question of an alternative currency.
We are certainly living through interesting times and this decade may be one of the worst over the past hundreds of years:
- Beginning in 2000, with a Technology Bust
- In 2001, denoted by 9/11
- Between 2002 until 2007, the best boom years in stocks and investments with wars in Iraq and Afghanistan and some of the worst terrorist events the planet has ever seen
- In 2008, the worst declines ever, descending into chaos with the financial landscape changing forever and getting worse
It appears that, going forward, with a proposed new currency solution being put forth by some of the strongest fiscal nations who wish to protect themselves, led by the BRIC nations, it seems we will see some more interesting times in 2010 and onwards in the ever changing financial landscape of the world.
This will become a very big issue very soon and will have great implications for all countries with millions of dollars shifting away from USD into other currencies via the proposed basket of currencies.
Financial Times:
China calls for new reserve currency
By Jamil Anderlini in Beijing
Published: March 23 2009 12:16 | Last updated: March 24 2009 00:06
Reuters:
Falling greenback fuels BRIC dollar reserve rethink
Mon Mar 23, 2009 3:00pm EDT
Monday, March 16, 2009
Dubai flagship companies not sold to Abu Dhabi
Many rumours have been flying around Dubai over the past 3 months and I have heard from people that they knew that Nakheel and Emirates Airlines had been sold (or partially sold) to Abu Dhabi. Well, that is not the case, and I am sorry to disappoint many people with the inside information!
I have had a strong opinion that this is not at all possible.
Abu Dhabi emirate, which is the capital city of UAE, and Dubai emirate have always had a long established and solid relationship spanning many decades.
Today, none less than the President of UAE has vindicated my opinion and in an interview to a new newspaper from Abu Dhabi confirmed that Abu Dhabi has not bought and is not interested in Dubai flagship companies.
Although Abu Dhabi is much more richer than Dubai and is more conservative in its approach to everything, however, according to long established traditions spanning centuries between various regions and countries in the Middle East, financial interference in times of need has never occured and nor should it occur. Additionally, Abu Dhabi and other countries and emirates have benefited from Dubai's rising gobal profile and the capability of UAE to provide a crime free safe haven in the entire Middle East and Africa. This has allowed all the nations in Middle East to benefit financially as well as gain a greater international profile while providing investment opportunities to all without any restrictions. It was unfathomable that Abu Dhabi or anyone else would try to stifle this long term growth strategy due to the financial crisis and further compound the problems here.
Abu Dhabi and Dubai are simply like good old friends who help each in their times of need, just like Kuwait helped Dubai to finance the dredging of Dubai creek in 1965.
A friend in need, is a friend indeed!
Economy is resilient, says Khalifa
WAM
Published: March 15, 2009, 23:05
President His Highness Shaikh Khalifa Bin Zayed Al Nahyan, has denied rumours that the Abu Dhabi government is seeking to acquire companies owned by the Dubai government and said there are misinterpretations about the relations between the emirates.
I have had a strong opinion that this is not at all possible.
Abu Dhabi emirate, which is the capital city of UAE, and Dubai emirate have always had a long established and solid relationship spanning many decades.
Today, none less than the President of UAE has vindicated my opinion and in an interview to a new newspaper from Abu Dhabi confirmed that Abu Dhabi has not bought and is not interested in Dubai flagship companies.
Although Abu Dhabi is much more richer than Dubai and is more conservative in its approach to everything, however, according to long established traditions spanning centuries between various regions and countries in the Middle East, financial interference in times of need has never occured and nor should it occur. Additionally, Abu Dhabi and other countries and emirates have benefited from Dubai's rising gobal profile and the capability of UAE to provide a crime free safe haven in the entire Middle East and Africa. This has allowed all the nations in Middle East to benefit financially as well as gain a greater international profile while providing investment opportunities to all without any restrictions. It was unfathomable that Abu Dhabi or anyone else would try to stifle this long term growth strategy due to the financial crisis and further compound the problems here.
Abu Dhabi and Dubai are simply like good old friends who help each in their times of need, just like Kuwait helped Dubai to finance the dredging of Dubai creek in 1965.
A friend in need, is a friend indeed!
Economy is resilient, says Khalifa
WAM
Published: March 15, 2009, 23:05
President His Highness Shaikh Khalifa Bin Zayed Al Nahyan, has denied rumours that the Abu Dhabi government is seeking to acquire companies owned by the Dubai government and said there are misinterpretations about the relations between the emirates.
Saturday, March 7, 2009
Sunday, March 1, 2009
Dubai's glitter less shiny
According to this latest article in The Toronto Star, which is a very balanced article, Dubai is going through a downturn. Most points mentioned in the article are quite correct.
However, I would like to balance it further with a few more points as my perspective.
Dubai always has had a transient population. Every couple of years, most people leave Dubai for one reason or another. Hence, it is very difficult to find a professional with over 5-10 years of local experience in Dubai. Most people you meet would have been in Dubai for less than 4-5 years. Whereas most businessmen, at least the successful ones, usually have been based in Dubai for over 10-20 years. This is mostly true because a successful businessman cannot leave any city/country purely because he is successful.
Of course, Dubai has started losing jobs in the last few months and especially after Dec 2008. However, most of these jobs were created over the last 2-3 years and hirings were happening at a very rapid pace. Now the market is balancing the overshooting of the job growth and salary growth. Cost of living including rents just went through the roof especially since 2005. This is getting corrected with inexperienced and less qualified people unfortunately losing jobs because the liquidity and profits of real estate sector are unable to be re-invested into the system to further enhance the growth and reducing the future growth potential and causing job losses and lack of profits. Many real estate speculative investors and speculative developers are having extremely difficult times and in turn are bringing real estate and other sectors down.
Another thing that has not worked in Dubai's favour is the falling currencies of Europe, UK, Russia and India. Majority of new money was indeed coming into Dubai from these 4 regions. Additionally, the lower price of oil and ongoing crisis in almost countries is not helping either. Banks have slowed their lending for personal loans, mortgages and project finance.
Dubai may hit a bottom by June when most schools close and the global crisis becomes worse and the heat of Dubai makes the retail sector even worse than it already is today. The opening of 3 new large malls in last 4 months with another one slated to open in a month or two is definitely not helping. although the Govt has raised new money last week and CDS spreads (Credit Default Swaps) of Dubai have declined, the mood of average people in the city is definitely not improving with the growing uncertainty.
Persian Gulf's 'City of Gold' losing its glitter
Oakland Ross
MIDDLE EAST BUREAU
Mar 01, 2009 04:30 AM, EST
However, I would like to balance it further with a few more points as my perspective.
Dubai always has had a transient population. Every couple of years, most people leave Dubai for one reason or another. Hence, it is very difficult to find a professional with over 5-10 years of local experience in Dubai. Most people you meet would have been in Dubai for less than 4-5 years. Whereas most businessmen, at least the successful ones, usually have been based in Dubai for over 10-20 years. This is mostly true because a successful businessman cannot leave any city/country purely because he is successful.
Of course, Dubai has started losing jobs in the last few months and especially after Dec 2008. However, most of these jobs were created over the last 2-3 years and hirings were happening at a very rapid pace. Now the market is balancing the overshooting of the job growth and salary growth. Cost of living including rents just went through the roof especially since 2005. This is getting corrected with inexperienced and less qualified people unfortunately losing jobs because the liquidity and profits of real estate sector are unable to be re-invested into the system to further enhance the growth and reducing the future growth potential and causing job losses and lack of profits. Many real estate speculative investors and speculative developers are having extremely difficult times and in turn are bringing real estate and other sectors down.
Another thing that has not worked in Dubai's favour is the falling currencies of Europe, UK, Russia and India. Majority of new money was indeed coming into Dubai from these 4 regions. Additionally, the lower price of oil and ongoing crisis in almost countries is not helping either. Banks have slowed their lending for personal loans, mortgages and project finance.
Dubai may hit a bottom by June when most schools close and the global crisis becomes worse and the heat of Dubai makes the retail sector even worse than it already is today. The opening of 3 new large malls in last 4 months with another one slated to open in a month or two is definitely not helping. although the Govt has raised new money last week and CDS spreads (Credit Default Swaps) of Dubai have declined, the mood of average people in the city is definitely not improving with the growing uncertainty.
Persian Gulf's 'City of Gold' losing its glitter
Oakland Ross
MIDDLE EAST BUREAU
Mar 01, 2009 04:30 AM, EST
Subscribe to:
Posts (Atom)