BANKING SYSTEM NOT WELL PROTECTED

quote: "Success is a thought process"

UBS Balance Sheet (source: Google Finance)

Balance Sheet 2008 in millions CHF
Total Assets 2,231,019.00
Total Liabilities 2,214,633.00
Total Equity 16,386.00

If you want to know why is the situation so bad, you only need to look at the balance sheet.

2.234 Trillion CHF in Assets with 2.214 Trillion CHF in Liabilities with Total Equity amounting to paltry 16.386 Billion CHF. Depending on what kind of assets they hold, whether it's properties or CDOs or bonds or others.

An impairment of 5% on assets would cost 111.55 Billion CHF, wiping out the entire Equity base of 16.386Billion CHF. With the recent sale of CDOs from Merill Lynch of their CDOs for 22 cents for the dollar, a 5% impairment is simply theoretical and perhaps even optimistic.

Just say for theoretical sake, a 5% impairment would require fresh equity of >100billion CHF. Surely Sovereign wealth Funds will need to have deep pockets easily to the tune of 300 to 500billions CHF to mitigate the problem.

The entire financial system is over-leveraged. Sub-prime originally would not have been an issue, but it now is, because it causes the over-leveraged Financial system to break down.

How much more money do we need? UBS being one of them, who else needs funding?

Your thoughts?