Swiss universal bank UBS (NYSE:UBS) reported its third-quarter earnings today, with results in line with expectations ... or published expectations, in any case. Shares rose more than 10% at one point today, against a 2.66% gain for the entire Swiss Market Index. The jump hints at the depth of pessimism that has burdened this stock.

Business- vs. accounting-based gains
It's worth pointing out that the only reason the bank posted a profit at all this quarter is a massive CHF 2.2 billion gain ($1.9 billion at today's exchange rate) booked on its own debt, which was marked down in the market. (How is that possible? See my explanation of mark-to-market accounting.) The banks could well be forced to reverse part or all of those gains at the end of this quarter.

Still, UBS appears to have turned the corner in restoring investor confidence. Multiple rounds of expensive capital raises have lifted the bank's vitals: At 10.8%, UBS's Tier 1 Capital ratio compares smartly with that of U.S. peers JPMorgan Chase (NYSE:JPM) at 8.9%; Bank of America (NYSE:BAC) at 7.55%; and Citigroup (NYSE:C) at 8.2%.

At that price, it's yours
That said, I don't share the market's enthusiasm, which looks precariously balanced on desperation, rather than solidly situated on fundamentals. At 12.5 times the lowest estimate of 2009 earnings (and that's before today's jump in the share price), it would take more than a few obsequious private bankers to get me interested in this stock. Particularly since I expect intense competition for client assets from Bank of America/Merrill Lynch (NYSE:MER), Goldman Sachs (NYSE:GS), and Morgan Stanley (NYSE:MS) in the years to come.

Further credit crisis Foolishness: