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Old 10.12.2007, 13:07
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Yet more sub-prime UBS woes another $10bn writedown....

Ouch! This is in addition to the previous 4bn CHF writedown, last quarter

http://news.bbc.co.uk/1/hi/business/7135872.stm


Another 10bn dollars (approx 11.2bn CHF). And that might not be the end of it.

What gets me is that the writedown they announced for the last quarter was spun by PR to make it look like that was the sum total of their losses. Clearly it wasn't and they are trying to drip-feed the bad news out. Makes you wonder just how bad the total losses are across all the banks...

EDIT: Just struck me that 10bn dollars only buys you 11.2bn Francs these days. Seems like only last year when a dollar got you 1.5 Francs.....
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Old 10.12.2007, 13:12
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Re: Yet more sub-prime UBS woes another $10bn writedown....

And UBS shares are up almost 3% this morning. I don't get it...
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Old 10.12.2007, 13:16
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Re: Yet more sub-prime UBS woes another $10bn writedown....

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And UBS shares are up almost 3% this morning. I don't get it...
be interesting to see who is doing the volumes on this one ... don't think it will last though :

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LONDON, Dec 10 (Reuters) - Fitch Ratings will hold a meeting on Monday to discuss the AA+ ratings on Swiss bank UBS (UBSN.VX: Quote, Profile , Research) after it announced $10 billion in subprime-related writedowns, a senior analyst at the agency told Reuters.
Fitch in September moved its outlook on UBS to negative, a signal the rating could move down over the medium to long term, and warned that its "tolerance to earnings volatility" at the AA+ level could be tested.
I have booked a big short on my Fantasy Shares platform ...
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Old 10.12.2007, 13:18
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Re: Yet more sub-prime UBS woes another $10bn writedown....

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be interesting to see who is doing the volumes on this one ...
The PRC is buying ten percent of UBS.
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Old 10.12.2007, 13:20
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Re: Yet more sub-prime UBS woes another $10bn writedown....

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The PRC is buying ten percent of UBS.
very good ....
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Old 10.12.2007, 13:24
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Re: Yet more sub-prime UBS woes another $10bn writedown....

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The PRC is buying ten percent of UBS.
You mean USPS not UBS or did you mean China
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Old 10.12.2007, 13:32
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Re: Yet more sub-prime UBS woes another $10bn writedown....

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And UBS shares are up almost 3% this morning. I don't get it...
The stock markets are completely irrational at the moment. I'd attribute it to the sort of 'last gasp' behaviour before a major change in the market.


If there's one thing a trader loves, it's a trend. Having spoken to a few it seems like most haven't a clue about underlying long-term economic movements but are very sharp indeed at spotting the chance to make a quick profit by spotting trends.

Hence if someone buys a lot of shares and starts an upward trend, there are plenty willing to jump on board. Likewise when a big enough 'profit taking' sell trade is executed you'll see traders short the shares or quickly unwind their positions as the trend reverses.

So it is possible that we'll actually see the shares down before the end of the day.


Long gone are the days when dealing on the stock market was about buying shares in the profits of a well-run company, providing a long-term income stream for the shareholder and capital revenue for the company to invest in their business.
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Old 10.12.2007, 13:47
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Re: Yet more sub-prime UBS woes another $10bn writedown....

Not bad when you can write down "another" 10bn and still not even think you've done anything wrong.

Funny that, through all the sub-prime problems, we hear no talk of anyone being at fault. The bankers are always spotless, didn't do anything they shouldn't have, earned entirely their salaries and bonuses (CHF 72,000 per day for the boss of UBS and - you can trust them with your money. What happened to the directors of Northern Rock? Did they pay any of their grotesue bonuses back? Has anyone named and shamed them? I doubt it very much, they were just doing thier job...so what happened to due dilligence?

One has to wonder where bankers get their sheer arrogance from.

As it was explained to me, banks can't be bothered with small loans (CHF 100,000 for example) because the costs are the same for 100k as they are for 10 million.

The difference is that, for 100k for a simple, small businessman, they want to know if you've "proved" yourself. Who the hell needs money once you've "proved" yourself, i.e. you manged to get through your start-up without the bank lending you anything!

For 10M, well, that's great for business (and business chat about how much we have loaned...are they just so self-centered).

It's like dodgey money and laundering....not possible for you and I but, if you're well placed in a country, especially in government....rules might change when some millions or even billions on deposit is the result. And yes, it happens in Europe also and all the time. As one Russian politician put it, "you don't think we put all our money in Russian banks do you? And western banks know exactly where the money is coming"

I suppose that's why they can write down another 10bn. People like Mugabe won't want all his tomorrow. And if he does, they'll discover it's suspect money and delay paying anything as long as possible. Completely legal, of course.


Will
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Old 10.12.2007, 14:18
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Re: Yet more sub-prime UBS woes another $10bn writedown....

From Times Online ....

Quote:
The Government of Singapore's investment arm is putting in SFr 11 billion, while an undisclosed strategic investor in the Middle East will take SFr2 billion worth of shares.

Related Links




Together the two will hold a stake of up to 12 per cent in UBS, which becomes the latest bank to sell a stake to a strategic holder. Late last month, Citigroup collected a $7.5 billion investment from Abu Dhabi.
Oil money is clever money these days ....
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Old 10.12.2007, 15:02
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Re: Yet more sub-prime UBS woes another $10bn writedown....

UBS managers protest by blocking the entrance to headquarters in Opfikon as they hear there will be no bonuses dished out this year...
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  #11  
Old 10.12.2007, 15:58
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Re: Yet more sub-prime UBS woes another $10bn writedown....

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I suppose that's why they can write down another 10bn. People like Mugabe won't want all his tomorrow. And if he does, they'll discover it's suspect money and delay paying anything as long as possible. Completely legal, of course.
Will
Well, as Polorise has posted, they've been forced to sell 12% of the company to Middle/Far East concerns to raise capital to cover the losses.

(Amazingly, according to the inane BBC News24 business commentator person I've just been watching that's a positive sign. )

But you have a point about the special treatment for banks. You only have to look at the Northern Rock bailout in the UK plus the tens of billions of Dollars/Euros in emergency loans that the Federal Reserve and the ECB have been providing 'behind the scenes' to financial organisations to see that banks get treated very differently to any other business.

These clowns have been making one way bets ever since 2001. The markets have been absolutely flooded with liquidity enabling them to loan simply silly amounts of money, making them huge profits. Now that the chickens are coming home to roost (Credit Crunch) you find massive government/Central Bank intervention in the so-called 'free' market to save their butts.
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Old 10.12.2007, 16:04
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Re: Yet more sub-prime UBS woes another $10bn writedown....

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(Amazingly, according to the inane BBC News24 business commentator person I've just been watching that's a positive sign. ).
Positive because they have been totally transparent ? ....

Just been on IM with a trader friend in NY ... is doing well before the bell, but apparently a lot of shorts are going to go in on the live session.

Pre-Market: 51.70 +1.22 (2.42%) - Dec 10, 8:41AM ET
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Old 12.12.2007, 12:28
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Re: Yet more sub-prime UBS woes another $10bn writedown....

Question- Would it be a good time to move my savings out of UBS into my second account at Zürcher Kantonalbank?
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Old 12.12.2007, 12:34
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Re: Yet more sub-prime UBS woes another $10bn writedown....

Not unless you are sick of the exhorbitant fees or galled by the millions the asleep-at-the-wheel chairman is making despite two consecutive quarterly losses.

The point of what UBS did Monday is that they added Sfr.19.4B to their Tier 1 capital (financial stability), so if that's what you're alluding to, I don't think there's much point in moving accounts, unless you're doing so for symbolic reasons.

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Question- Would it be a good time to move my savings out of UBS into my second account at Zürcher Kantonalbank?
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Old 12.12.2007, 12:44
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Re: Yet more sub-prime UBS woes another $10bn writedown....

indeed - and one of the problems UBS is facing is that their record-quarter-after-record-quarter in recent years has actually more than compensated for this swing.

It's been a bad year for the IB business of UBS though - DRCM failing (expensively) and Clive not doing his operational risk job right (is he really to blame?). Peter popping off, Marcel refusing to go anywhere.....

Reputation is suffering but the underlying bank is solid (and presently supported by the Wimbies).

All in the cycle.....downturns are to be expected
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Old 12.12.2007, 12:57
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Re: Yet more sub-prime UBS woes another $10bn writedown....

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Question- Would it be a good time to move my savings out of UBS into my second account at Zürcher Kantonalbank?
I don't think UBS are about to go bust any time soon.... So your money is probably about as safe as it can be.


On the subject though - does anyone know if there's a banking compensation scheme in Switzerland similar to the one mandated by the UK FSC for banks operating in the UK? There, you'll get the first 35k of your cash bank if the bank goes bust (subject to the fund having enough money to meet compensation claims).
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Old 12.12.2007, 13:06
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Re: Yet more sub-prime UBS woes another $10bn writedown....

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indeed - and one of the problems UBS is facing is that their record-quarter-after-record-quarter in recent years has actually more than compensated for this swing.
Weren't they doing share buy backs as well?
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Old 12.12.2007, 18:08
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Re: Yet more sub-prime UBS woes another $10bn writedown....

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And UBS shares are up almost 3% this morning. I don't get it...
Very simple. Announcing the loss was perceived to be an act of coming clean. And since the amount is far too small to knock them out, this cleansing and "new strength" was rewarded by the market with confidence...
unless they have more skeletons in the closet...
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Old 12.12.2007, 18:21
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Re: Yet more sub-prime UBS woes another $10bn writedown....

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Very simple. Announcing the loss was perceived to be an act of coming clean. And since the amount is far too small to knock them out, this cleansing and "new strength" was rewarded by the market with confidence...
unless they have more skeletons in the closet...
Yes, though this was the second skeleton. I think far east buyers had much to do with holding the share price. Certainly early BBC radio 4 business reports that day suggested that UBS was in for a pasting when the markets opened - the opposite happened...
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Old 12.12.2007, 18:23
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Re: Yet more sub-prime UBS woes another $10bn writedown....

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unless they have more skeletons in the closet...
Well they only have 40 billion more in CDO's...
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