Sunday, September 30, 2007

UBS latest victim of credit turmoil / FT

I assume that this kind of news is already "priced in"( update UBS down 4% after forecasting quarterly loss, now unchanged ). I think we will here similar news for quarters to come form almost every financial company . And i doubt that the future anouncement are also already priced in.....

Ich denke das die heutige Nachricht wohl schon "eingepreist" ist ( Update UBS down 4% after forecasting quarterly loss, inzwischen unverändert) . Diese Art Meldung wird und wohl noch diverse Quartale weiter begleiten. Ich kann mir schwerlich vorstellen das auch die zukünftigen Wertberichtigungen in Mrdbereich bereits in den Kursen enthalten sind......

UBS is expected to announce Monday the departure of its investment bank head as it warns it will write down billions of dollars of fixed-income assets, making the Swiss banking group one of the year’s biggest casualties of financial market turmoil. The bank is expected to say it has written down its fixed-income portfolio by more than SFr3bn ($2.6bn), triggering a Q3 loss of at least SFr600m ($516m), say people close to the matter.

Lex notes that new UBS chief Marcel Rohner has been thrown head first into the current credit crunch, and concludes that while trading activity has boomed for UBS over the past five years, as for all banks, it is also likely that risk is not being properly measured, or even that it is disappearing “off balance sheet”.

Bloomberg UBS Has Loss, to Cut Jobs, After Subprime Writedowns

Hat tip to New York City Housing Bubble

> Fascinating to see that often the same "experts" that praised the financials and the investmentbanks in particular have siwtched now after the earnings are "gone" already switched to the "book value" argument. They probably havn´t read some dirty secrects about the not very conservative accounting as shown in Earnings Quality Part XXIII........ & via Mish Bank Balance Sheets and Earnings.

> Erstaunlich das etliche die bis vor kurzem das niedrige KGV als Kaufgrund angeführt haben, nun da oft überhaupt keine Gewinne mehr ausgewiesen werden , inzwischen nahtlos auf das Argument "günstig im Vergleich zum Buchwert" umgeschwenkt sind. Denen sei nochmals gesagt das gerade die Bilanzierung nicht immer sehr "konservativ" ausfällt. Nachzulesen in Earnings Quality Part XXIII........ & Bank Balance Sheets and Earnings

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Blogger jmf said...

Credit Suisse Sees Quarterly Profit After UBS Warning

12:35 AM  
Blogger jmf said...

UBS is credit casualty - while Credit Suisse takes chance to shine, relatively

12:37 AM  
Blogger jmf said...

Nice timing....

The Real Deal: The sobering message of RBS’s sky-high ABN bid

The RBS offer for ABN Amro is roughly €38 a share - equivalent to a premium of more than 70 per cent.

Vodafone’s bid for AirTouch was pitched at 70 per cent in 1999, while one year later, AOL bought Time Warner also at a 70 per cent premium, according to data from Thomson Financial.

There are no comparable banking deals where such a premium has been paid.

Even more worrying is that Sir Fred et al are willing to pay 70 per cent for a new and untested model: the complex break-up of a bank across several countries

1:29 AM  
Anonymous Anonymous said...

I think it may be that the 'central banks will save us' mentality is so strong now that any dip in financials, like at the open today, is seen as a buying opportunity. There was a guy on CNBC this morning saying Deutsche Bank should be bought at these levels -- asking about possible future negative surprises didn't get him to change his mind.

Whatever it is, the vibe coming from the markets right now seems to be that there is more upside potential from here than downside risk. Enough bad earnings reports/forecasts would probably change that; time will tell.


2:29 AM  
Blogger jmf said...

That was probably one of those experts that called Deutsche at 120 € a buy with a 150 € target.

I would like to see the track records of the "experts" every time they appear on TV and in the press......

This would probably lead to a sudden "shortage" of guests..... :-)

2:51 AM  
Anonymous Anonymous said...


That was probably one of those experts that called Deutsche at 120 € a buy with a 150 € target.

Genau. Es ist einfach unglaublich, wieviele ähnliche Fälle man finden kann.

But it makes no difference: if you are short financials this buying will either limit your profits or make you mindestens think about covering.


2:58 AM  
Blogger jmf said...


key will be if or better when the weakness in financials will spread.

So far the asset managers are just shifting from one sector % region to another to another and almost no money is leaving the asset class overall.

I´ve been through this with the homebuilder. The first 3 to 5 calls to buy the builders (bottom, cheap valuation etc) were brutal for me as a short. 10-20 percent spikes were the norm....

But after that nobody did pay attention to any of the bullish calls or comments.

I assume that we will see the same for the financials in general.

3:15 AM  
Blogger jmf said...

Emerging-Market Short Sales Climb, Entice Bulls at DWS, Fisher

Speculators are increasing their bearish bets against two-thirds of the 50 largest emerging- markets companies.

That's making the bulls even more confident stocks will keep rising from Brazil to China

3:17 AM  
Anonymous Anonymous said...

I just saw that article about emerging markets: Vorsicht ist angesagt...


3:25 AM  
Anonymous Anonymous said...

Noch ein Beispiel:

Although further write downs are always a possibility, at 0.80 times price/book KBH is closing in on some very compelling valuations. But what may be most compelling is the large short interest in the name. Closing in on 25% and with more shorts jumping on board yesterday, KBH is beginning to get that "coiled spring" feeling that scare the shorts...I think we can see $29 here in KBH on what I think will be a short term bounce.


3:32 AM  
Blogger jmf said...

Citigroup Cuts Profit Forecast, Cites `Weak' Credit Markets

Oct. 1 (Bloomberg) -- Citigroup Inc., the biggest U.S. bank, cut its third-quarter earnings forecast, citing ``weak performance'' in fixed-income credit markets and writedowns on leveraged loan commitments and mortgage-backed securities.

Citigroup expects to report a decline in net income of about 60 percent from the same period a year earlier, the New York- based bank said today in a statement distributed by Business Wire.

4:40 AM  
Blogger jmf said...

Citi takes big hits across the board: 60 per cent drop in Q3 income / FT

Write-downs of approximately $1.4 billion pre-tax, net of underwriting fees, on funded and unfunded highly leveraged finance commitments. These commitments totalled $69 billion at the end of the second quarter, and $57 billion at the end of the third quarter. Write-downs were recorded on all highly leveraged finance commitments where there was value impairment, regardless of the expected funding date.

Losses of approximately $1.3 billion pre-tax, net of hedges, on the value of sub-prime mortgage-backed securities warehoused for future collateralized debt obligation (”CDO”) securitizations, CDO positions, and leveraged loans warehoused for future collateralized loan obligation (”CLO”) securitizations.

Due to continued deterioration in the credit environment, organic portfolio growth, and acquisitions. Approximately one-fourth of the increase in credit costs was due to higher net credit losses and approximately three-fourths was due to higher charges to increase loan loss reserves.

6:03 AM  

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