UBS

vpkozel · Apr 1, 2008 at 9:59 AM

Holy, sweet Jesus.

UBS Writes Off Additional $19B, Posts $12B Loss

Swiss bank UBS said today that the value of its investments tied to U.S. real estate had plummeted by $19 billion in the first quarter of the year -- a further sign that the crisis in the financial industry has yet to reach bottom.

The company has now had to wipe more than $37 billion in investments from its books over the last six months, primarily because of declining U.S. real estate prices and uncertainty about the value of investments tied to risky sub-prime home mortgages in the United States.

In a morning news release out of Zurich, UBS said it would post a loss of $12 billion for the last three months, and that it had arranged for a capital infusion of $15 billion from a consortium of banks in order to solidify its finances.

UBS board chairman Marcel Ospel announced he would step down from the job, and the company said general counsel Peter Kurer would be nominated to replace him.

After months in which major banks and finance companies have announced similar write-downs -- totaling hundreds of billions of dollars -- analysts debated whether the latest UBS announcement, and the steps the bank was taking to protect itself, meant the worst was now over for UBS.

Investors, initially at least, welcomed the announcement and drove UBS shares as much as 6 percent higher on European markets. Along with raising additional capital, the company said that it has now substantially reduced the amount of exposure it has to U.S. real estate -- selling off some of its holdings and writing down the value of others. In addition, remaining investments were being transferred to a separate subsidiary.

European exchanges overall were trading higher by between 1 and 1 percent today. U.S. markets gave the news a positive spin as well: the Dow Jones industrial average was up more than 160 points in the first minutes of trading, and other major exchanges were higher as well.

"We can imagine that the worst may be behind us," fund manager Nathalie Pelras at Paris-based Richelieu Finance told Bloomberg News. The additional capital coming to UBS "allows investors to see the glass as half full."

At the same time, other announcements served as reminders of the continued uncertainty: In Germany, Deutsche Bank said it was devaluing some of its mortgage-related assets by nearly $4 billion; U.S. investment firm Lehman Brothers said it would raise $3 billion through a stock sale to reassure investors that it has enough capital to keep operating.

The UBS announcement and others like it have led to a spate of proposals to prop up the U.S. housing industry and change the way financial markets are governed -- including a broad proposal yesterday by Treasury Secretary Henry M. Paulson Jr.
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VA49er · Apr 1, 2008 at 10:02 AM

Investors, initially at least, welcomed the announcement and drove UBS shares as much as 6 percent higher on European markets.
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This is why I will never day trade.

Freakshow · Apr 1, 2008 at 11:15 AM

VA49er said: ↑

This is why I will never day trade.
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All the banks are kicking ass today. The market is fucked.

meatpile · Apr 1, 2008 at 11:52 AM

UBS Has another approx $33 billion exposed.....they've already written down 37 billion...

vpkozel · Apr 1, 2008 at 11:59 AM

meatpile said: ↑

UBS Has another approx $33 billion exposed.....
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Link? I'm trying to figure out the breakdown of what they are writing down - is it foreclosed property, MBS losses, HE losses? What?

Being in the middle of all this stuff is fun as hell though.

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UBS

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Freakshow Fuck you guys.

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UBS

vpkozel Professional Calvinballer

VA49er Full Access Member

Freakshow Fuck you guys.

meatpile 7-9

vpkozel Professional Calvinballer

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