Sieht ganz so aus als wenn der Kommentar der UBS in UBS Write Down Estimates "Best Case $ 6 Billion, Worst Case.... das die Abschreibungen nicht "wesentlich" sein werden ein wenig untertrieben gewesen ist. Welch Überraschung.....Wird spannend zu sehen sein wie lange die Haltwertzeit der "maximum clarity" in diesem Falle vorhalten wird ;-) . Ich bin mir ziemlich sicher das die gleiche Umfrage zu Bonuszahlungen" für die UBS weniger "euphorische" Vorhersagen hergeben würde..... Höchste Zeit die für die neueste Version des Investment Banking Lexicon: The post-credit squeeze edition. Köstlich!
UBS to Sell Stakes After $10 Billion in Subprime Writedowns UBS AG, Europe's largest bank by assets, said it will write down U.S. subprime investments by $10 billion and raise 13 billion francs ($11.5 billion) by selling stakes to investors in Singapore and the Middle East.
UBS expects a loss in the fourth quarter, and may have a loss for 2007, the Zurich-based company said in an e-mailed statement today.
Securities firms and banks had announced about $66 billion of losses and markdowns linked to the collapse of the U.S. subprime mortgage market this year. UBS reported its first loss in almost five years in the third quarter after the subprime contagion led to about $4.66 billion in markdowns on fixed-income securities and leveraged loans.
UBS Press Release & Deutsche Version UBS strengthens capital base and adjusts valuations UBS has introduced measures to substantially strengthen its capital position, adding CHF 19.4 billion of BIS Tier 1 capital. These include an issue of CHF 13 billion of new capital. This has been placed with two strategic investors: Government of Singapore Investment Corporation Pte. Ltd. (GIC) ( see GIC Website) with CHF 11 billion, and an undisclosed strategic investor in the Middle East with CHF 2 billion. > To be honest i´m surprised that Singapore has two vehicles and that GIC has assets over $ 300 billion. I´ve heard so for only from Temasek HoldingsUnocal) in relation with Singapore. It´s very impressive that such a small country with an estimated GDP of $ 140 billion, a population under 5 million and especially without a resource base has managed to accumulate close to $ 500 billion in Assets Singapore/Wikipedia. Chapeau!
> Ich bin ehrlich erstaunt das Singapur zwei staatlich kontrollierte Fonds zur Verfügung hat und das GIC mit über 300 Mrd $ so groß ist. Ich habe bisher im Zusammenhang mit Singapur immer nur den Namen Temasek Holdings gehört. Es ist beeindruckend wie es ein kleines Land mit unter 5 Mio Einwohnern, einen BSP von knappen 140 Mrd $ und vor allem ohne Rohstoffbasis schafft fast 500 Mrd $ in Staatsfonds zu pumpen Singapur/Wikipedia . Chapeau!
At the same time, UBS has revised key input parameters of the models that are used to estimate lifetime default and resulting losses for sub-prime mortgage pools. As a result of these revisions, UBS will write down its US sub-prime holdings by approximately a further USD 10 billion.
After these actions, UBS projects a strong BIS Tier 1 ratio of above 12%. ...
In response to continued deterioration in the US sub-prime mortgage securities market, partly driven by increased homeowner delinquencies but mainly fuelled by worsening market expectations of future developments, UBS has revised the assumptions and inputs used to value US sub-prime mortgage related positions. This will result in further writedowns of around USD 10 billion, primarily on CDO and "super senior"1 holdings. In light of continued deterioration in the sub-prime market, valuations of UBS's remaining sub-prime positions reflect the extreme loss projections implied by the prices achieved in the very limited number of observable market transactions in US sub-prime related securities and indices up to the end of November.
As the basis for its wealth and asset management business, UBS wishes to maintain a very strong capital base under all circumstances. Growth in net new money continues, with inflows in Global Wealth Management & Business Banking totalling about CHF 30 billion in October and November. It will therefore strengthen its capital position by issuing new capital in transactions with strategic investors, by selling treasury shares, and by replacing its 2007 cash dividend with a stock dividend.
> Must hurt to sell shares at fire sale prices that they have bought back for a better use of their capital. In Q2 the stock price was in a range of 70-80 Swiss Francs, today close to 50 Swiss Francs. And in total they are selling 36.4 million shares......... Well done!
> Muß sehr schmerzen die teuer zurückgekauften Aktien jetzt zu Schleuderpreisen zu verscherbeln. Ironischerweise sollten die Rückkäufe seinerzeit ja die effektivere Nutzung des Kapitals ermöglichen. Im 2. Quartal lag der Preis zwischen 70 und 80 Schweizer Franken, heute nahe 50...... Und insgesamt werden knapp über 36 Mio zuvor erworbene Aktien nahe Tiefstkursen vertickert...... Gut gemacht!
Strategic investors subscribe to issue of CHF 13 billion of new capital UBS has reached agreements with two strategic investors – GIC and one other – to subscribe to an issue of CHF 13 billion of mandatory convertible notes. This is subject to the approval of UBS shareholders at an extraordinary general meeting (EGM) which will take place in mid-February 2008. GIC has committed to subscribe to CHF 11 billion and the other investor to CHF 2 billion. The notes will pay a coupon of 9% until conversion into ordinary shares, which must take place on or before a date approximately two years after issuance. The proceeds of the issue will count as Tier 1 capital for BIS capital adequacy purposes after EGM approval.
Sale of treasury shares The Board of Directors of UBS has further approved the re-sale of 36.4 million treasury shares previously intended to be cancelled. UBS has received indications of interest in a share issue, is considering these and will place these shares over time. This will increase BIS Tier 1 capital by approximately CHF 2 billion.
Proposed replacement of 2007 cash dividend by stock dividend The Board of Directors proposes to replace the 2007 cash dividend with a stock dividend, i.e. a bonus issue of new shares. This will boost Tier 1 capital by CHF 4.4 billion, of which approximately CHF 3.3 billion is a reversal of accrued dividend for the first nine months of the year and the balance is dividend that will now not accrue. This is subject to EGM approval.
In total, these three actions, when completed and approved, will strengthen UBS's regulatory Tier 1 capital by approximately CHF 19.4 billion. After completion, and taking into account the expected fourth quarter loss, the firm's BIS Tier 1 capital ratio will improve to above 12% from 10.6% at 30 September 2007.
Marcel Rohner, Group Chief Executive Officer, UBS, said: "Conditions in the US mortgage and housing markets have continued to deteriorate, and we have updated our loss assumptions to the levels implied by the current distressed market for mortgage securities. In the last several months, continued speculation about the ultimate value of our sub-prime holdings – which remains unknowable – has been distracting. In our judgement these writedowns will create maximum clarity on this issue and will have the effect of substantially eliminating speculation. Together with the strengthening of our capital base this will allow us to concentrate on sustaining and developing our client businesses.
Information on GIC GIC is a global investment management company established in 1981 to manage Singapore's foreign reserves. With a network of eight offices in key financial capitals around the world, GIC manages a broad diversified portfolio across countries and asset classes that includes equities, fixed income, foreign exchange, commodities, money markets, alternative investments, private equity, real estate and infrastructure investments.
Is there still anybody left who thinks investment banker are living in the real world. After reading this report about the folks in London it should be no surprise why nobody saw the obvious .......The coming round of layoffs will probably be a rude awakening for some of the guys...
Die nachfolgenden Selbsteinschätzung der Bänker aus London in Form der Gehaltsvorstellungen erklärt wohl auch warum kaum einer das aktuelle Debakel hat kommen sehen. Die sind wohl so weit von der Realität entfernt das die kommende Entlassungswelle die meisten wohl überraschen dürfte....
Rude Awakening
Reduced bonuses - and they mean you / FT Alphaville Look you poor deluded souls out there. When the powers-that-be are spinning their line about it being a tough time in banking, or opining that next year may be difficult, they are in fact talking to you. When they say that everyone will have to play a role in getting through this challenging time, they are telling you that you’re going to get paid less. Not the bloke down the corridor, who left early last Thursday and whose timesheet regularly comes in shy of a three-figure working week. YOU.
We mention this because there is some evidence that people aren’t listening to the latest round of expectations management. Everyone just assumes they’re talking about the other guy.
CitiPanel, a specialist in survey of financial markets, conducted their survey of City financial types in November - well into the credit squeeze, the write-downs and the pruning of staff numbers by the big banks. So there is no excuse for this level of denial.
A whopping 63 per cent of respondents think their total compensation will rise for 2007 to 2008. Only 7 per cent admitted to believing it will fall (and they’re probably the ones in structured finance who are praying merely that they’ll hold onto a job at all).
Moreover, 42 per cent of the City workers surveyed are expecting a promotion - despite the fact that 56 per cent have already been promoted in the last two years. And yet 37 per cent are unaware of what is required internally to move up a grade in the organisation. But they’re rock stars though - they just know they are. On the back of a bumper 2006, now set as the base level for 2007/08, almost a third of those surveyed are expecting a rise in total pay of 6 to 10 per cent.
Expect some dire predictions and sterner words from your glorious leaders to arrive very soon
Jack McHugh engages us in this delightful thought experiment
Let's try a little thought experiment to examine just how well stock prices reflect what's happened this year.
Imagine it is January 1, 2007, and you have just been given the following information about what would unfold during the first 8 months of the year: .....
this clip is made for this great piece from caroline baum. if you havn´t seen it yet ..this is a must see!!!!!!!!!
dieser clip ist wie für diesen bericht von c.baum gemacht. wer den noch nicht kennt ....ansehen!
I first used this analogy in 1999 in writing about the bubble in Internet and technology stocks. The paradigm seems equally applicable to today's burst housing bubble.
First came denial: It isn't a bubble. Banks don't have any exposure to mortgages. Housing is a small sector of the economy. Subprime mortgages are a small segment of the home-loan market.
Then came the Feb. 7 double time-bomb from HSBC Holdings Plc, Europe's biggest bank, and New Century Financial, the No. 2 subprime lender in the U.S., that they were setting aside more money as a cushion against rising loan delinquencies. New Century filed for Chapter 11 bankruptcy protection on April 2, one of more than 40 lenders that have ceased operations or sought buyers since the start of 2006, according to Bloomberg data.
Accountability Soon the anger set in. Delinquency and foreclosure rates rose. Everyone was shocked, shocked to learn there was risk in risky loans. The press bombarded us daily with tales of shady lenders preying on victimized homeowners who would soon be out on the street for non-payment of mortgage interest.
No one was more upset than our elected representatives. Congress wants blood. Whose is irrelevant.
``Members of Congress want someone to be accountable for sensible lending,'' says Andy Laperriere, a managing director at the ISI Group in Washington.
Let the bargaining begin. With the homeownership rate at 68.9 percent in the fourth quarter, just shy of the all-time high, the potential audience for congressional hearings and potential market for invasive action is huge. Unfortunately, Congress comes up with some really loopy ideas.
``Ideas that seemed out of the mainstream today may become mainstream in the future,'' Laperriere says.
Options Open On Tuesday, Bloomberg News reported that the top Democrat and Republican on the House Financial Services Committee, Barney Frank of Massachusetts and Spencer Bachus of Alabama, respectively, said that mortgage-bond investors should be liable for deceptive lending practices.
..Let's hope the committee calls some mortgage-bond investors to testify. If they can be sued for someone else's actions, they aren't going to buy any mortgage bonds. Period.
Higher yields may compensate an investor for increased risk, but they don't offer adequate protection against class- action lawsuits.
Precedent Chairman Frank might want to call some folks from the state of Georgia, where the enactment of a Fair Lending Act in 2002 rocked the mortgage industry.
The law assigned liability for predatory lending to everyone along the food chain, from lender to securitizer to investor.
The reaction was predictable. Many lenders pulled out of the state, the rating agencies refused to evaluate the pools of home loans and the secondary market dried up.
The law, which took effect in October 2002, was amended the following March ``to address a number of unintended consequences'' and to limit assignee liability.
New Jersey's Home Ownership Security Act of 2002 had to be amended in 2004, too, because ``the market shut down,'' according to Robert Levy, executive director of the Mortgage Bankers Association of New Jersey. The amended law put limitations on assignee liability.
Liability ``does apply to high-cost mortgage loans, which carry more than 4.5 percent in points and fees and an interest rate greater than 8 percentage points over the comparable maturity Treasury,'' he says.
Aligned and Assigned There is no market for securitized high-cost loans, Levy says, and not many loans originated. Which is probably what Congress is getting at. The common theme to the hearings on subprime lending has been that Wall Street is ``eager to securitize, rate and buy as long as the originators feed the beast,'' Laperriere says. ``Many members of Congress want the major players in the secondary market -- holders of mortgage-backed bonds and the investment banks -- to have their interests more aligned with homeowners.''
It would seem a lot easier to fix the problem at the source, tightening regulations on the lenders themselves.
But hey, we still have two final stages of dying before the bubble is fully exorcised: depression and acceptance. If Congress follows through on its legislative reforms of the subprime market, the housing recession may turn into a depression. If that happens, can the rest of us find acceptance?
disclosure: unlike nowitzki i hate david hasselhoff :-)
bigger / größer
Besten Dank an 
First came denial: It isn't a bubble. Banks don't have any exposure to mortgages. Housing is a small sector of the economy. Subprime mortgages are a small segment of the home-loan market.
``Members of Congress want someone to be accountable for sensible lending,'' says Andy Laperriere, a managing director at the ISI Group in Washington.
Unfortunately, Congress comes up with some really loopy ideas.
New Jersey's Home Ownership Security Act of 2002 had to be amended in 2004, too, because ``the market shut down,'' according to Robert Levy, executive director of the Mortgage Bankers Association of New Jersey. The amended law put limitations on assignee liability.![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/charts/metals/gold/t24_au_en_usoz_2.gif)
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/charts/metals/gold/t24_au_en_euoz_2.gif)
