Below I noted MSNBC’s story tonight about how fmr. Sen. Phil Gramm (McCain’s economics advisor) was advising him on his subprime mortgage bailout policy while Gramm was also a registered lobbyist for the Swiss bank UBS.

Now, it’s clear from the report that UBS had some exposure on the subprime front. But I wasn’t aware of the true extent of it. TPM Reader KB sends in articles Businessweek and Forbes that show just how big a player UBS was. Forbes says that UBS is among the banks worst hit by the global credit crisis, particularly in their direct exposure to the US subprime market. According to Forbes, UBS has some $37 billion in write-downs on assets tied to bad US mortgages. In other words, the bank’s very life appears to be on the line in how the US government chooses to handle the matter.

As MSNBC reported, UBS deregistered Gramm as a lobbyist for the company on April 18th, though he continues to serve as a vice chairman of the bank. But that was fully a month after McCain’s speech outlining his own approach to the crisis.

Many of the lobbying connections the press has dug up on McCain have been embarassing. But I’m not sure any have really had teeth until this one. After all, how much does the average voter care that Charlie Black represented a lot of foreign dictators? A stench, yes? But finding out that McCain had a major subprime lender bank lobbyist whispering in his ear when McCain told the public that it was basically tough luck if they lost their houses?

(ed.note: Let me clarify one point. UBS was not a bank lending people money for home loans. Their very high level of exposure came from buying paper instruments backed by iffy mortgages. The way this works is that lender company X lends a bunch of people money to buy homes. Then company X packages all that together and sells it to a company like UBS — which bought quite a lot. There are many more levels of complexity, as I’m sure our banking industry readers will point out. But this is the basic point — they are heavily exposed to the fallout from the subprime crisis without having been a first order lender themselves.)